Cryptocurrency’s Impact on the Environment

The environment is where we live while co-existing with other living beings. We get all the resources that are required for our survival from the environment and we human beings, being greedy and the ultimate exploiter, have misused the environment for our anthropogenic activities to such an extent that we have brought havoc on ourselves. The overuse of natural resources, emission of harmful gases, misuse, and overuse of land are some very basic practices that our species have followed, without paying any heed to the upcoming consequences.

Major causes of concern

  • Bitcoin and other cryptocurrencies have shown massive growth in the world of economics but as per environmentalists around the world, the energy consumption required for cryptocurrency mining has contributed to the causes of concern. Energy consumption causes carbon emissions in high quantities which in turn causes climate change. With the increase in the use of cryptocurrencies the harmful impact on the environment increases as well which is the current issue, given the massive spread of popularity of cryptocurrency use.

 Energy consumption for mining bitcoin

  • As bitcoin is based on a decentralized network that requires mining and it involves the use of very powerful computers to solve complex mathematical algorithms. The software used for this purpose takes time to solve an algorithm. Hence, a massive amount of electricity is consumed by these powerful systems. The maximum consumption of energy by bitcoin or any other cryptocurrency occurs during the mining process.
  • The powerful computers consume electricity which is generated with fossil fuels. The electricity consumed just by bitcoin mining is more than the total electricity consumption of several countries around the world. The major source of electricity worldwide is coal and other fossil fuels for all kinds of industries including cryptocurrency. To generate electricity these fuels are burned which emit harmful gases in the environment.

Consequences of bitcoin mining on the environment

  • The harmful gases produced as a result of fuel burning for energy consumption mostly consist of carbon dioxide that affects the atmosphere and contributes to increasing the ambient temperature around the world leading to climate change.
  • The rapid use of fossil fuels also increases the rate of exhaustion of these resources as they cannot be renewed instantly. The rate of consumption has increased and hence the reserved resources are getting used up more giving it very little to no time of regeneration which happens by natural processes.
  • There are renewable modes of energy resources that can be used but the maximum population of miners is situated in China that uses coal as the primary source to generate energy. Hence, most of the energy requirement in the cryptocurrency sector comes from non-renewable sources. This leads to air pollution and an increase in global warming.
  • Since the processes involved in the use of cryptocurrency require electronic systems, a huge amount of electronic waste is also produced. The outdated hardware becomes obsolete and cannot be re-used for other purposes. These become a part of the waste that can contaminate the soil, water, etc by releasing toxic contaminants.

Potential problems of bitcoin mining

  • With the rising price of cryptocurrency, the current rate of mining will become less efficient as it will need even more complex algorithms to be solved. To calculate more difficult mathematical puzzles with the constant rate of transactions, even much-upgraded systems would be required and hence more energy will be consumed to process the same number of transactions, and more electronic waste will be generated

Importance of Alternatives

  • Bitcoin mining impacts the environment by emitting harmful gases. Some cryptocurrencies do not have mining and allow transactions with ordinary computers requiring less energy. If the bitcoin industry does not come up with an alternative like that then they may face a collapse in the future.

Digital development is yet another big cause that has put a negative impact on the environment and another big cause is the emergence of cryptocurrencies in the digital world where trading is done using software like cryptocurrency. Many people are not aware of the fact that with the rising trend of bitcoin and other cryptocurrencies as a new class of asset in a very short time, another threat to our environment has appeared.

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