Bitcoin is often hailed as a revolution in the financial world. But what many people don’t know is that bitcoin is bad for the environment.
In this article, we will explore the environmental impact of bitcoin and why it is not good for the planet.
How is Bitcoin bad for the environment?
Cryptocurrency has an environmental impact due to the energy required to mine Bitcoin. Bitcoin is bad for the environment because Bitcoin mining uses large amounts of electricity and computer processing power that releases greenhouse gases into our atmosphere. This can lead to climate change which leads us right back full circle.
Although the hardware has become more efficient, the growth of cryptocurrency mining has lead to more energy being consumed globally.
What are some ways we can reduce Bitcoin’s environmental impact?
- Bitcoin mining consumes a lot of energy. One way we can reduce bitcoin’s environmental impact is by using renewable energy sources such as solar power or wind turbines instead of fossil fuels like coal and natural gas which release carbon dioxide into our atmosphere. This will help reduce bitcoin’s environmental footprint.
- Focus on other cryptocurrencies that use systems such as Proof of Stake. This doesn’t require as much processing power and removes the impact of mining.
- Improving the efficiency of cryptocurrency mining. Better hardware can reduce electricity usage and make it more carbon neutral. Bitcoin mining has improved lots over the years and companies such as Intel are looking to make the Bitcoin network even more efficient.
How does Bitcoin pollute?
Bitcoin does not directly pollute the environment. Bitcoin miners require energy consumption for the computing power they use which then solves the complex math equations. Doing these “math equations” is how the Bitcoin network is held secure. It helps process Bitcoin transactions and keeps the network decentralized.
What are the arguments against the environmental impact of crypto mining?
Many people argue that most of the world’s Bitcoin mining is done with renewable energy. In Canada for example much of the mining is done with hydroelectric power or wind power.
Mining operations prefer this cheaper energy compared with buying energy from coal power plants. Cheap electricity allows mining pools and mining operations to make larger profits, so they are incentivized to be energy efficient and to use renewable energy.
Is Bitcoin a waste of energy?
This depends if you see value in Bitcoin. Bitcoin mining operations use computing power to secure the decentralized network that Bitcoin uses. It also helps validate transactions. As Bitcoin has no central authority, the miners are responsible to process each Bitcoin transaction and make sure the Bitcoin network stays secure.
Some people argue that cryptocurrency mining is a waste of computational power, however these people tend to not see value in digital currency. They believe the electricity consumed could be used for other areas.
This is partly true as even renewable energy could be used by other people to reduce electricity from non renewable sources, but crypto mining is usually focused on areas with more energy than they consume. Therefore this extra electricity than the average American household doesn’t use, can be used to make new Bitcoins.
Overall whether crypto mining is a waste of energy, depends on who you ask. Anyone who invests in Bitcoin will most likely say that cryptocurrency mining is useful, whilst others who don’t will say it’s an electronic waste and causes carbon dioxide emissions.
Does Bitcoin affect global warming?
Bitcoin requires large amounts of computing power, which requires lots of electricity. It is extremely energy intensive. This electricity if not from a renewable source, will require the burning of fossil fuels in power plants. This then releases carbon emissions and will push global warming ever closer.
Bitcoin mining consumes 110 Terawatt hours per year. This is about 0.55% of all global energy production. This energy use is a large amount, but bigger savings could be made elsewhere.
For those that believe Bitcoin has a use case of being a decentralized way to transfer value, how much energy consumed is irrelevant.
Why doesn’t the government ban Bitcoin mining activities?
Banning Bitcoin mining isn’t that useful in stopping Bitcoin operations. The Chinese government has banned Bitcoin mining, only for it to shift to other countries, which causes the same environmental impact.
Some governments have raised taxes on energy usage, that is used for mining rigs. Although this is unlikely to make any difference to environmental impacts, as governments are not the most efficient in improving renewable energy sources.
Bitcoin is such a small amount of total energy consumption globally, so the government could focus on other causes of greenhouse gas emissions, as there are worse causes of electronic waste than Bitcoin.