You’ve probably heard that cryptocurrencies, thanks to their algorithm, are a massive drain on the planet’s resources. But by how much?
Well, it turns out that cryptocurrency mining employs more energy than the entire nation of Switzerland. More specifically, cryptocurrencies use an estimated 7 gigawatts of electricity per year – comparable to Ireland’s electrical output. The total energy consumption of cryptocurrency is also more than Iceland’s annual power usage.
The impact of cryptocurrencies on the environment has become a hotly debated topic. As Bitcoin’s value continues to climb and more individuals and financial institutions alike turn to it as a hedge against inflation, governments are wrestling with how to regulate its use. And the environmental impact of doing so is front and center.
Cryptocurrency and the Environment – A Look at the Blockchain Technology
Cryptocurrency is a digital currency that uses cryptography for security and anti-counterfeiting measures. Public and private keys are often used to transfer cryptocurrency between individuals.
Essentially, cryptocurrency is an exchange medium created and stored electronically in the blockchain. It uses encryption techniques to control how many units can be created and to verify all transactions.
The cryptocurrency was designed as a secure, anonymous method of paying for items digitally. The first cryptocurrency created was Bitcoin back in 2009, and since then, many more cryptocurrencies have been generated. These are commonly known as “altcoins.” Think of it as a different flavor of bitcoin. Bitcoin and other cryptocurrencies that are derived from it are decentralized. This form of control is opposed to a centralized money supply or centralized national banks. Bitcoin uses the blockchain transaction database and a system of distributed ledgers.
Blockchain is a decentralized network, which means that it doesn’t have one centralized mainframe where all the data is stored. Instead, all of the data is stored on servers across multiple computers in different locations. This means that if one of these machines went offline for any reason, the blockchain wouldn’t be affected by this. It also means that hackers can’t hack into just one single system and thus steal or delete all the data from a blockchain because there isn’t just one single source of data to attack.
- Use a cryptocurrency exchange that is committed to sustainability.
- Support cryptocurrencies that are actively fighting climate change.
- Some cryptocurrencies are working to solve sustainability issues caused by the mining of other coins. Look into investing in these currencies and using them for daily transactions instead of other major coins such as Bitcoin and Ethereum.
- Use your cryptocurrency to support sustainability initiatives.
- By donating some of your crypto earnings to sustainable projects such as those announced in the United Nations’s Blockchain for Impact initiative, you can help build a greener future for our planet.
- Educate yourself about how much carbon emissions are created from cryptocurrency mining operations around the world so you can fully understand how it impacts our planet’s environment. For instance, did you know that every day, 2 million tons of carbon dioxide are released into the atmosphere due to crypto mining? That’s enough CO2 to fill 454 thousand passenger planes! We all must take this issue seriously and make sure we do what we can to look after our beautiful planet and ensure it has a better future ahead.
You’re probably wondering whether the situation is going to get any better. Don’t get your hopes up. Power consumption will likely only increase as more and more people invest in cryptocurrency. But there’s a silver lining: cryptocurrency is still a very new technology, which means that the industry has yet to be fully regulated. As governments around the world start to understand and realize the implications of cryptocurrencies on climate change, we can expect to see some laws passed that put strict limits on how much energy can be spent on mining.
In addition, organizations like the United Nations need to take action by passing resolutions to protect our planet’s environment from irreversible damage. Both governments and international organizations are beginning to realize what’s at stake if they don’t act soon, so we can hope for some progress in this direction soon. Last but not least, individuals also have an important role to play: we all need to make changes in our lives that reduce our carbon footprints! You can head over to the OKX website’s academy section to learn more. Although cryptocurrency is a recent technology, it has already had a major impact on the planet and its future entirely depends on us.