Rumors about the environmental impact of cryptocurrency mining have long existed. Some, in fact, attribute it as a cause for not using bitcoin.
But, amid this sea of chatter, what is the actual state of bitcoin mining? Does it have as much impact as many say it does?
Well, let's uncover the truth.
Is Bitcoin Mining Unfriendly To The Environment?
In recent years, it has been alleged by some experts that bitcoin mining is an environmentally unfriendly activity. This, they say, is due to the fact that the bitcoin ecosystem requires a large amount of electricity to stay alive.
Criticism over the use of bitcoin has affected many companies. One of these companies was Tesla which elected to pause their bitcoin operations until they found more sustainable options.
Bitcoin's carbon footprint is gigantic. According to data from Digiconomist's Bitcoin Energy Consumption Index it is equal to that of Belgium, as both emit around 114.06 megatons of carbon dioxide into the atmosphere every year.
What impact does bitcoin mining have on the environment? Well, hundreds of experts have dedicated their time to research the subject in depth.
One of these experts was the Dutch bank De Nederlandsche Bank, also known by its acronym DNB.
DNB has investigated the harmful impact bitcoin mining has on our environment. studies show that the carbon footprint of the bitcoin market had increased by 25% back in 2020.
So why does bitcoin use so much energy? Well, cryptographic networks based on proof-of-work need electricity to operate. In other words the more interest there is in mining, the more electricity the network needs.
I know, it all sounds pretty grim, but trust me, it’s not as bad as it seems according to The Bitcoin Mining Council (BMC), a voluntary global forum for mining companies and the bitcoin ecosystem in general, which conducted an extensive analysis of the energy aspects of bitcoin.
Among the analysis findings: More than 46% of U.S. miners used sustainable energy to mine bitcoin in the last quarter of 2021. However, this figure may be misleading since they surveyed less than half of the miners in the U.S.
Junior Theomou is the CEO and founder of Miners DeFi a group of environmentally conscious members of the fintech community who are on a mission to make cryptocurrency mining green.
In an exclusive interview with Gokhshtein Media, Theomou claims there are ways to make crypto more sustainable by using "green" mining practices that employ renewable energy sources. He cites solar and hydroelectric power as being the main two.
Theomou, however, does acknowledge that it is an evolving issue despite there being solutions on the horizon. Ultimately, he says it will take the people's will to implement environmentally friendly practices.
What Do The Experts Think?
Experts recognize that the energy consumption of crypto assets relying on proof-of-work is a significant problem. Or at least Carol Goforth, a U.S. academic at the University of Arkansas, does. Yet, Goforth is positive about the issue, asserting that as more assets switch to proof-of-stake, this will become less of a problem.
Changing bitcoin's consensus mechanism is nearly impossible. But, there is nothing to worry about as energy consumption is not entirely harmful. Some of the newer bitcoin mining operations in the United States use renewable sources to power their mining equipment. In the long run, this can be proven beneficial to all residents as these operations are inciting infrastructural developments in the U.S.
Will Clemente, the lead insights analyst at Blockware, also made an exciting point. According to Clemente, the conversation needs to change to understand bitcoin's energy consumption better. The question is not why bitcoin consumes so much energy. Rather, the real question is why bitcoin exists noting that if we don't understand bitcoin, its energy consumption will always seem unjustified.
Clemente also said that the migration of the hash rate out of China is another positive catalyst for cleaner aggregated energy. Jumping out of China means less coal-powered mining and more regulation on what type of energy is used to mine bitcoin. This migration also makes the grid more secure and decentralized.
Bitcoin: Half Green Now
It is impossible to deny the doubts and concerns about energy consumption in mining. Of course, bitcoin consumes half the energy that the banking system currently consumes. But the banking system indeed serves a lot more people than the bitcoin network.
Bitcoin is not perfect — it's okay to acknowledge that. And there's no denying that bitcoiners and miners are taking the proper steps to make the network as clean and renewable as possible.
Will this be enough to drive more adoption? Who knows. At this point, mass adoption is not as important as taking care of the planet we live on. Adoption will eventually come — and if it comes with a cleaner bitcoin, it will be a lot better.
