Did you know that Bitcoin consumes the same amount of energy and generates the same amount of electrical waste as a medium-sized country? For a very long time, Bitcoin’s (BTC) significant environmental impact has been challenged.
Some argue that switching to renewable energy sources will aid in lowering its carbon footprint. However, the reality is that Bitcoin mining nevertheless consumes a tremendous amount of energy, and renewable sources account for a relatively minor portion of this. These are four arguments in support of the necessity to address Bitcoin’s environmental problems.
The Carbon Footprint of Bitcoin is Greater than that of Most Countries Worldwide
The platform Digiconomist, which studies the unforeseen effects of digital trends, claims that the annual energy consumption of Bitcoin mining is equivalent to that consumed by a small country. Its carbon impact is comparable to that of Romania.
To put that into perspective, about 20 million people live in Romania. It takes lots of energy to mine bitcoins, which is how new coins are created and transactions are verified on the system.
Since a government or bank is not backing Bitcoin, a separate transaction validation is required to guard against fraud and errors. There will be more financial motivation to answer the problem as Bitcoin’s value rises and mining becomes even more profitable.
Due to this, mining businesses invest further in computing power, which accounts for the images of enormous mining farms filled with endless rows of machinery you may have seen. However, there is a daily cap on the quantity of Bitcoin that can be created.
Therefore, the task of reducing production inevitably gets more difficult as additional miners join the network. Simply put, Bitcoin is not intended to be energy efficient. Contrarily, Bitcoin’s DNA is meant to consume more and more energy.
Less Than 40% Of The Energy Used By Bitcoin Is Renewable
A widespread claim is that Bitcoin will escape the coal fire thanks to renewable energy. However, according to the most recent Cambridge University study on the cryptocurrency industry’s environmental impact, only 39% of proof-of-work mining is fueled by renewable energy sources.
This statistic alone doesn’t account for the adjustments brought about by China’s crackdown on cryptocurrency mining. The entire effects of that decision, however, are not yet known. While a few miners have relocated to the United States, where an emphasis is placed on renewable energy sources, others have done so to nations like Kazakhstan, wherein coal and oil still wield power.
The Average American Household Uses Approximately As Much Power In Two Months As a Single Bitcoin Transaction
It becomes even more apparent why environmentalists are worried if we consider single transactional data rather than yearly use. The typical Bitcoin transaction uses 1,785.5 kWh of energy, or nearly 61.2 days’ worth of electricity, to operate an American home.
The most concerning aspect of these numbers is how much energy Bitcoin is using. The cost of powering the world’s largest cryptocurrency is rising when many nations and corporations are attempting to cut their co2 emissions and power consumption.
Bitcoin Mining Generates Electronic Waste Equivalent To The Netherlands
Bitcoin mining uses a lot of power, but it also generates a lot of electronic waste (e-waste). According to research, Bitcoin is responsible for over 24 kilotons of electronic garbage annually. This is roughly on par with the Netherlands in terms of e-waste.
E-waste is a concern for many reasons. First, several materials used to manufacture chips, such as quartz and silicon, are scarce. Second, hazardous substances and heavy metals can escape into our water and land supplies when electrical equipment is discarded.
Bitcoin miners need specialized equipment that is difficult to reuse and depreciates quickly. The equipment that miners use lasts for about 18 months. This implies that a lot of hardware is used before being promptly discarded.
The Environmental Impacts of Bitcoin Cannot be Overlooked
Bitcoin’s supporters contend that the social advantages of the currency surpass the environmental consequences, such as providing access to financial services to the millions of financially excluded people worldwide. Additionally, they believe that Bitcoin will aid in promoting the global growth of renewable energy sources and lowering the well-known cryptocurrency’s carbon footprint.
This may be correct, but it’s also difficult to imagine Bitcoin as anything other than a large, obnoxious truck being passed by smaller, faster, and greener vehicles. Exchanges for cryptocurrencies are overflowing with Bitcoin competitors. Investors that care about the Environment might wish to look into the more environmentally friendly mining processes used by many emerging cryptocurrencies.