More than a growing phenomenon, cryptocurrencies attract curiosity, ranging from simple novices to the most seasoned investors. Let’s try to decipher the different impacts of cryptocurrencies through their life cycle when you trade Bitcoin, for instance.
The environmental impact of cryptocurrencies on the environment are at different levels. They are linked, on the one hand, to the electronic devices used and, on the other, to the network.
Environmental Impacts of Cryptocurrencies Mining
The Cambridge Bitcoin Electricity Consumption Index (CBECI) reveals how much electricity bitcoin mining consumes:
In 2019, bitcoin consumed almost as much electricity in one year as the United Arab Emirates (116.12 TeraWatt/hour against 119.45 TWh). This annual consumption is also 10x greater than what Google consumes (20 TWh). Bitcoin’s electricity consumption could soon reach 0.6% of global electricity production, according to the same study, slightly more than Norway.
The environmental impact of cryptocurrencies, linked to this high electricity consumption, differs according to the primary energy used to produce it. Nuclear, wind, coal. The impacts can be multiple: GHG emissions, soil and ecosystem degradation, high water consumption, etc.
Unfortunately, 70% of bitcoin miners were located in China before they had got banned. There, electricity is mostly produced from coal (very polluting) and without strict environmental standards.
This impact is due in particular to overconsumption and the reduction in the lifespan of computer equipment. But also, part of this impact comes from the energy necessary for their operation.
To reduce this impact, we can choose to invest in more responsible cryptocurrencies, but no sustainable alternative is in place. At best, it is then a question of reducing its uses related to cryptocurrencies.
How Mining Is Setted
Mining refers to the process of validating transactions made on a blockchain (or, to take the example of the newspaper, the sentences that are written there). These transactions are validated by group, or by block.
The minors are then put in competition with each other by the system to know who will have the right to validate them. The validation of these operations is a key step for blockchains, and the process is referred to as the “consensus protocol”: this is what ensures that all ledgers have the same version.
There are different consensus protocols: the two most used are proof of work (which concerns bitcoin, and many other crypto-currencies), and proof of stake (Ethereum is preparing its transition to this model). If there are other protocols, they are not as widely used, so this article will only mention the case of these two systems.
What Is Needed for Mining Cryptocurrency
To keep the network running all the time, these devices operate 24 hours a day, at full power. Not intended for such activities, processors and graphics cards then wear out quickly. The overconsumption of materials is also due to their shortened life cycle.
The multiplication of devices induced by mining brings in its wake impacts related to сthe manufacture and end of life of these. The manufacture of electronic devices remains the biggest environmental impact linked to digital technology.
The depletion of stocks of abiotic resources (non-renewable natural resources) is accelerating.
As for their recycling, this remains very inefficient. Most of the time the devices end up in illegal exports to poor countries, where the population will try to extract rare metals. At this phase, soil pollution explodes the counters.
How Cryptocurrency Becomes Less Sustainable
Bitcoin was a pioneering element in the democratization of crypto-currencies and, since its rise, we have seen the appearance of many crypto currencies. According to CryptoPredictions.com, one of them is Cardano (ADA). This cryptocurrency was initially designed to be a flexible and sustainable, scalable public blockchain platform with its own crypto tokens. It allows the development of a wide range of new crypto tokens, decentralized finance apps, games etc. But it looks like it can be less sustainable, since different analysts predict the different prices for it by 2025. ADA forecasts show that the cardano price can be between $3 and $9,8 by 2025.
Did you know that there are many other cryptocurrencies that intend to promote ecology in their use? They are:
- Solar Corner — An American initiative which aims to promote the production of solar energy and obtain the means to finance energy transition projects.
- The Ecocoin — This currency rewards the user for the good actions carried out in terms of sustainable development.
- Plastic Bank — Reducing plastic pollution in the oceans by putting a price on plastic waste is the mission assigned to the PlasticBank. The currency has a plastic waste recovery rate higher than that of the market.
- Peercoin — Blockchain technology is indispensable for issuing cryptocurrency. Only this one requires a lot of energy because it forces a computer to perform many calculations.
- Fair Coin — The FairCoin brings together all the notions of sustainable development around the same currency.
- Shiba Inu.
Thanks to crypto-currencies, it becomes easy to support ethical projects for people and the planet! Do you own crypto-currencies and in what case do you use them?
How Crypto Mining Effects Hardware Prices
Crypto mining contributes to the hardware pricing augmentation. There are a couple of reasons:
- Since the hardware is supposed to function 24/7, it wears out fast, so there is a constant demand on the market.
- New technologies require progression and updating of the hardware, so the older models do not suit for the further intentions, thus, it is necessary to produce the new ones.
As a result, consumption of the crypto mining software provokes higher pricing for the items. So, the price for crypto mining items will always be higher and higher, and it will keep on producing damage to the environment, which is pret
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Author: Tabassum Naiz
