Environmental Risks: Does Mining Affect Climate Change?

This is a sponsored guest post.
Cryptocurrencies have begun to disrupt the financial world as we know it. In the past few years,they have become increasingly popular and valuable. This popularity has pushed people to buy bitcoins en masse, driving demand up and increasing their price.

And while cryptocurrencies have their supporters, there are still many detractors out there.
Some still believe that the market is only a bubble that is just getting ready to burst. Others are
convinced that cryptos are a gateway for criminal activities and black markets.

That being said, the most concerning criticism that keeps popping up is the environmental  impact of cryptocurrencies.

In this article, we try to explore the possible environmental risks that cryptocurrencies bring
 to  the table and how worried should we be for our planet’s future.

What is Bitcoin?

Bitcoin is the first cryptocurrency that was released to the general public, way back in 2009.
 It is a decentralized, peer-to-peer payment network that was designed to provide a permissionless exchange of value, through its digital currency, the Bitcoin.

The entire system is supported by and based on blockchain, which is a distributed public
 ledger that records all transactions. Information on the blockchain is shared among the
 nodes of the  network, or individual computers and mining rigs all around the world.

How do cryptocurrencies affect the environment?

Bitcoin, and many popular cryptocurrencies like it, function on a proof-of-work consensus
mechanism. In this system, miners solve increasingly difficult mathematical problems to
discover the next block of transactions, using raw computing power.

For their efforts, miners are rewarded with new coins every time they discover a new block.

Herein lies the main problem:

     - Mining hardware requires enormous amounts of electricity to run
     - The mining algorithm adjusts the difficulty of the mining process, making 
        it more difficult  as more miners join in.

As cryptocurrencies become more and more popular, their value increases and so does their
power consumption. Combined with the proliferation of mega-mining farms, Bitcoin mining has
become a power-hungry process that can be measured on a global scale.

If we wanted to put this in a few illustrative numbers here’s how it would look:

       ● If Bitcoin were a country, it would be the 40th highest energy-consuming country
         in the  world, ranking above Colombia and the Czech Republic.
       ● The annual carbon footprint of Bitcoin is comparable to that of Denmark.
       ● A single Bitcoin transaction consumes more energy than 100 000 Visa transactions.

The link to fossil fuels

The increasingly high costs of mining cryptocurrencies have pushed crypto mining farms into
regions with a combination of permissive environment policies and cheap energy.

For instance, China has been a dominant force in the cryptocurrency industry. The world’s
largest Bitcoin mining companies are settled there and are responsible 
for more than 85% of  cryptocurrency mining.

Researchers at the University of Cambridge have found that much of the electricity used in
these mining operations come from inefficient coal-based power  plants in rural areas of the country.

Coal plants that were constructed in advance of failed government industrial projects are now
used to produce electricity for Bitcoin mining. Burning coal is a serious contributor to climate
change, and has a major role in cryptocurrency mining. This phenomenon is pushing experts
 to view cryptocurrencies as a threat toward cleaner, low-carbon emission electricity consumption.

In defense of cryptocurrencies

Due to these findings, miners and cryptocurrency investors have taken a defensive stance on
environment-related questions.

For example, the University of Cambridge has stated that the carbon footprint of cryptocurrency mining is much lower compared to other commodities such as oil or gold.

Furthermore, recent figures show that cryptocurrency mining is slowly turning towards 
cleaner and renewable sources of energy, even in China. This report by Coinshares estimates
 that approximately 75% of crypto-mining facilities are consuming electricity from renewable
resources, while the other 25% are obtained from fossil and nuclear producers.

These are encouraging trends that show us that miners are sacrificing parts of their profits and
turning to cleaner energy sourcing for their mining operations.

Conclusion

One thing is certain, is that cryptocurrencies are set to participate in our financial future. As
such, investing in them can be worth our while in the long run.

That being said, there’s a price to pay, and the environmental impact of cryptocurrency mining
might seem worrying at the moment. And if their popularity rises, we can expect their power
consumption to increase as well.

To balance this phenomenon, strict energy regulations are needed. These should allow miners to maintain their production, while simultaneously protecting local communities’ access to  affordable energy and their environment.

Finally, miner operators need to play a fair game and sacrifice a part of their profits by turning
towards renewable sources for their electricity consumption. This would, in turn, mitigate the
impact of cryptocurrency mining on the environment.

Chaudhry

My name is Chaudhry.I am founder of this site.I have over 10 years of experience in Crypto Market Trading Reporting, Journalism and Breaking news.in the tech and telecom sectors and also other related news. facebook twitter

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