Introduction
When it comes to financial trends, cryptocurrencies, specifically Bitcoin, is none other than the most talked about in recent years. It has become very popular, even considered as among the primary payment methods used by several industries and businesses, whether big or small. These digital currencies have truly made an impact as it has proved its promise to change how people store and move money in a better, faster, and secure way.
However, behind these promising advantages and benefits, using cryptocurrencies and how they are produced comes with a great price. Aside from its purchasing cost, it has a not so hidden side effect that directs to our environment.
In this article, we will further discuss how cryptocurrencies contribute to the growing environmental problems.
Cryptocurrencies and Mining
Many cryptocurrencies, especially Bitcoin, primarily use the process called Mining. This process is essential in verifying transactions and securing the cryptocurrency network. For this procedure to take place, powerful computers are being used to solve complicated math problems. As a result of this usage, a lot of electricity is consumed, making it a non-environmental friendly process. This is where environmental issues begin.
Each Bitcoin transaction uses about 435.61 kWh of electricity which is the same amount of energy used in a typical American home in about 15 days. This makes Bitcoin the most hazardous cryptocurrency to ever exist up until today. While Ethereum followed the same process before, they have gone separate ways with this method and have switched to a system that requires less power. There are also cryptocurrencies that don't rely on mining at all like XRP and Solana.
Environmental Effects of Bitcoin Mining
Here's a closer look on each of the environmental effects caused by Bitcoin mining:
Carbon Emissions
Aside from excessive usage of electricity, Bitcoin mining also contributes to carbon emission. A double kill to our environment. This occurs because most mining farms are located in a place that are primarily powered by fossil fuels like coal and natural gases. As a basic information, these fuels are known to release carbon dioxide when burned - a major cause of climate change.
Bitcoin, particularly, produces 55 million tons of carbon dioxide per year. This is the same emission from a small country like Singapore. Ethereum was also responsible for millions of tons of carbon emissions before they switched in using an energy-efficient model. Despite some cryptocurrencies opting for a safer method, many cryptos are still using a lot of energy and creating pollution.
Moreover, money is the root of all these activities. Since the value of Bitcoin continually increases, many people are eager to join, increasing the miners doing the process to earn profits. As a result, more machines are being used alongside energy consumption. If you're interested in how Bitcoin compares to other major cryptocurrencies like Ethereum, you can read our comparative analysis.
Electronic Waste
This is also referred to as e-waste. As mentioned, mining is a specialized process which requires the use of delicate hardwares that are designed to perform a specific task. The problem is, these devices or hardwares easily become outdated as newer and more powerful models are continuously created to do the task more efficiently. And since old hardwares is of no use, large amounts of electronic waste are produced every year.
Bitcoin mining has been reported to produce about 10.52 kilotons of e-waste every year. This significant amount ends up in landfills. The other downside is that most of these mining farms are located in countries that don't practice and prioritize e-waste recycling. As a result, these machines are often not properly recycled and can release toxic materials that further disrupts the environment.
Water Use and Cooling
Similar to our computers at home, when mining devices and machines work, it generates a lot of heat overtime. However, unlike our computers that we can shut down anytime, mining machines should keep working non-stop, thus, it needs to be kept cool. This is why many mining farms use water cooling systems where the water supply comes from lakes or rivers to help lower temperatures.
This may be a good solution on their end but it has a huge impact on the other side which creates serious environmental problems. When hot water is dumped back into natural bodies of water, it can increase the temperature of the water, which can harm fish and other wildlife. Other than that, it can also cause water contamination and water scarcity.
What Can Be Done to Reduce Cryptocurrency's Environmental Impact?
Is there really a way to stop these negative outcomes of Bitcoin mining to our environment? Definitely, yes! However, it will generate the same results - which stops greedy individuals from practicing what is fair and just. Moreover, the best way to reduce the environmental damage from cryptocurrency mining is to consider better alternatives like consensus mechanisms.
Conclusion
The environmental impact of these cryptocurrency mining is serious but fixing it is not impossible, especially if companies in the crypto industry will work together. Overall, if cryptocurrencies will continue to thrive in the long term, a balance between financial innovation and environmental responsibility should be prioritized to keep these digital currencies more sustainable in the future and allow more people to experience the benefits of it.
