Cryptocurrency, despite being one of the major sources of passive income and developing quickly profitable returns using crypto exchanges, has a significant issue that is rarely discussed.
Cryptocurrency uses a lot of energy. Yes, you heard that right, and it is one of the major drawbacks of this industry. You can visit this Website for more information.
Bitcoin and Ethereum, two of the most popular cryptocurrencies, use the same mining process, which uses a lot of energy. However, the usage of this energy has various drawbacks, one of which significantly affects the environment.
In this article, we’ll talk about the harm crypto mining is doing to the ecosystem and how this problem can be addressed.
Cryptocurrency Mining and the Energy that is Consumed
There is no way to quantify how much electricity you currently use for cryptocurrency mining. However, there is one method—using hash rate and mining rigs—by which the total amount of energy used may be broken down.
In 2020, Cambridge published a paper claiming that the annual electricity consumption for bitcoin mining exceeds that of Argentina and the United Arab Emirates. These values translate to 26.73 terawatt-hours in numbers; they represent a full year.
A different Digiconomist analysis from the previous month asserted that the amount of electricity needed for a single transaction is equivalent to the amount used by one American family over the course of 74 days. This is equivalent to 2159 kilowatts hours of electricity. So, this is how much electricity is used for Bitcoin mining, and we have yet to discuss Ethereum.
If any currency is mentioned after Bitcoin, it is Ethereum. Even while Ethereum mining uses far less electricity than Bitcoin mining, it is still alarming to consider how much electricity is only used in this industry.
Expert analyses show that the annual electricity used for ETH mining is equivalent to the power sources of Finland, which equals 87.29 terawatt-hours. A typical transaction uses 210 kilowatt-hours of energy, which is equivalent to a single American family’s 7-day electricity consumption. Also, remember that these numbers are the most recent ones to be calculated.
Future energy use is anticipated to rise, and there are various reasons why this will happen:
- One factor driving up energy use is the rise in demand for cryptocurrency.
- The estimated cost of cryptocurrency mining will have an equivalent influence on the rise in energy.
Reason Behind the Need for Energy for Cryptocurrency Mining
Many experts agree that the significant amount of energy needed for crypto mining should be viewed as a boon rather than a liability. The major purpose of this heavy use of electricity is to raise the price to a point where no one can enter and seize control of it.
Cryptocurrency users assert that the decentralized structure of cryptocurrencies has several benefits over traditional currencies, which centralized institutions like banks and governments control. All users/miners can join the network and mine cryptocurrencies using their computing power, thanks to the decentralized structure. Additionally, this component frees the network from any other outside interference, and the miners already existing in the network completely control its security.
Crypto Mining’s Impact on the Environment
Fossil fuels are typically used in the production of power in most nations. Now, the amount of electricity needed for mining is already significant in these nations where cryptocurrency is also mined, which has an effect on costs and the environment. However, excluding fossil fuel resources and choosing a more straightforward and affordable replacement is the only way to ensure that your mining is profitable.
According to a report published by Digiconomist in May 2022, Bitcoin mining releases 114 million tonnes of carbon dioxide annually, the same as the Czech Republic. The same analysis claims that Ethereum emits 48.69 million tonnes of carbon dioxide annually, equivalent to Bulgaria.
China said in 2021 that it would outlaw crypto mining due to the country’s high energy use. Now, Kazakhstan and the United States have quickly displaced China as the primary locations for cryptocurrency mining.
The majority of the energy is produced by a few nations, such as the USA and Kazakhstan, utilizing fossil fuels. Given that circumstance, crypto mining in the USA in 2021 accounted for almost 38% of all mining, compared to 13% in Kazakhstan.
Also Read: Factors that Affect Cryptocurrency Prices
