The bullish case of cryptocurrencies like bitcoin depicts the increasing global acceptance of digital coins as a mode of transaction. You can visit Bitcoin Loophole to get a detailed guide about bitcoin trading. But the bear case of these digital currencies merely concentrates upon the energy-intensive requirement while mining such currencies.
Since mining is a mere proof method to form new coins and circulate them into the market, the digital currency network relies highly upon it. Moreover, mining is the mere method to validate every transaction occurring on an explicit cryptocurrency network. Every digital currency network uses mining to verify the transactions, but in some digital currencies, people who perform mining are the only development member; ripple is one of the most outstanding examples of such digital currencies.
Key Takeaways!
Only those cryptocurrencies are alleged to be energy-intensive that incur a consensus mechanism named as proof of work. However, other consensus mechanisms like proof of burn and proof of history are highly sophisticated in energy consumption.
The environmentalists highly criticize the undeniably energy-intensive nature of such digital currencies, but this nature plays a significant role in securing a digital currency network. Hackers find it difficult to hack a cryptocurrency network with massive energy requirements.
Earlier, China was the largest country in bitcoin mining, but now the United States has taken over China in terms of the overall hash rate standing. The reason why china lagged behind the United States is that in China, cryptocurrency mining is no longer legal. As a result, most of the leading mining pools in china have either moved to Texas or Kazakhstan. According to some reports, the United States alone is responsible for 43$ of digital currency mining.
Bitcoin mining currently generates the maximum amount of electronic waste. Subsequently bitcoin, ethereum is responsible for generating a heavy amount of electronic waste. Electronic waste here incurs greenhouse gas emissions and other toxic products.
Few digital currencies do not incur the energy-intensive concept of mining. Moreover, rumours are that bitcoin might shift to another consensus mechanism to decrease the overall energy consumption in mining.
Electricity consumption of cryptocurrency mining!
The electricity consumption in cryptocurrency mining has been one of the most significant environmental issues for a very long time. When people started to realize that the profit potential of bitcoin mining is extraordinary and they don’t need to put any effort into this business, the electricity consumption skyrocketed. In the recent, the electricity consumption alongside difficulty rate has increased immensely.
As per reports, most novice miners want to indulge in bitcoin mining as it is mine. The electricity consumption of bitcoin mining annually is somewhere 130 terra watts. Bitcoin mining electricity consumption has increased by 50 terra watts per hour in the last two years. Next, bitcoin, ethereum leads the chart in terms of electricity consumption. The electricity consumption of ethereum mining is 112 terra watts per hour.
Environmental impacts!
Cryptocurrency mining is classified as a threat to the environment by some environmentalists because electricity consumed by mining hardware to validate transactions is further responsible for greenhouse emissions or carbon footprint. The carbon footprint of cryptocurrency mining has increased gigantically. The current carbon footprint of only bitcoin mining is nearly 114 million tons. On the other hand, the carbon footprint of ethereum mining is nearly half of bitcoin mining.
Is there any legit way to mine cryptocurrencies in an energy-efficient way?
As per the white paper on digital currencies, proof of work is the most frequent cryptocurrency consensus mechanism. Unfortunately, proof of work hosts a highly chaotic environment for digital currency mining. Other famous consensus mechanisms like proof of stakes and proof of history are way more energy efficient than this consensus mechanism. In short, the mere way to make cryptocurrency mining an energy-efficient task is to change its consensus mechanism.
Or cryptocurrency miners can correspondingly start to utilize more green energy like solar energy and hydro energy. These are the mere two ways to make cryptocurrency mining extremely energy efficient. In addition, people have indicated that bitcoin will correspondingly move to an energy-efficient consensus mechanism in the future.
The above-listed portion explains the environmental impact of cryptocurrency mining and how we can make this business energy efficient and greener.