With increased attention being devoted to the environmental impacts of cryptocurrency mining, a natural question arises: Does bitcoin mining pose a serious threat to the environment? Is blockchain technology detrimental to our natural ecosystems? Could it be driving climate change, pollution and the loss of nature? In his article, “How Serious Is the Threat of Bitcoin Mining to the Environment,” Lucas Cacioli writes, “While no one doubts that blockchain is a powerful and transformative technology being used across an ever-growing range of sectors, its energy footprint as an industry has been deemed as unsustainable at the current pace.”
The calculations to mine BTC tokens in the blockchains for cryptocurrencies require a high level of energy consumption. In fact, according to Cacioli, “Bitcoin mining alone is utilizing around 0.6% of the global electricity consumption—this is more electricity than a country like Argentina uses in a year.”
We’ve talked about the high energy consumption required by bitcoin mining before, so this isn’t necessarily news, but we do have to ask whether or not mining for bitcoin could be responsible for an increase in undesired environmental impacts. China took a hardline stance against both crypto trading and cryptomining.
Increasing demand for investment sources that support clean energy means that there’s a large amount of interest in crypto currency mining that uses green power. Mining in this way not only can offset the potential damage created by the heavy energy usage involved with bitcoin mining practices, but it can also create renewable energy sources that can be used across the board.
One way this can be done is through creating an economic incentive to encourage green power mining. This would reward those miners who are using renewable energy sources as well as create an impetus to transition to 100% renewable energy.
In fact, some believe that crypto mining will be a bridge to renewable energy production. While the carbon footprint of bitcoin has been a longstanding issue for the cryptocurrency industry an increasing number of companies are transitioning to sustainable energy sources, there is still a large portion of the crypto mining industry that is contributing to large amounts of power usage.
There is one thing to note, Cacioli says, “According to a report published by Galaxy Digital, a cryptocurrency investment firm, Bitcoin mining uses only half the energy consumed by the traditional banking system, and gold mining uses up to twice what Bitcoin mining does.” What does this mean in terms of the future? If crypto can continue to commit to green power mining in larger numbers, there is a further incentive to place long-term investments in the hands of bitcoin and other cryptocurrencies.