Even though Bitcoin has been cherished throughout time thanks to the advantages brought to the financial world, like decentralization, new payment venues, transaction anonymity, and increased security, it has also received its fair share of criticism. In terms of sustainability, Bitcoin has always been overshadowed by its fiercest rival, Ethereum, which is undergoing significant updates to remove some of the stigma brought to the crypto sphere owing to the high amount of energy mining devices used. While the team of developers behind Ethereum succeeded in making the crypto space a little greener and bringing relief to the environmentally-friendly investors who were on the edge of their seats waiting for the completion of the upgrades, Bitcoin’s case is a little different. It’s highly reliant on specialized, power-hungry mining rigs to add blocks to the chain, as this feature was in its nature and white paper from the token’s very beginning.
However, it is taking steps towards a greener future, and the efforts made in this regard are undeniable. If you were wondering how to profit from this technology or where to buy Bitcoin safely but were concerned about the impact on the surroundings, know that investing in it comes at a lower environmental price than mining it.
It’s been two years since China’s crackdown on crypto mining made many miners relocate to the United States and other states to continue their activities. This move had repercussions for the environment, but since then, further steps have been taken and improvements made to reduce the overall impact, some of which are efficient while others are less successful.
With governments working to reduce greenhouse gases and individuals switching to more sustainable energy resources in the face of a global energy crisis, efforts must be made to lead Bitcoin and other PoW-reliant digital coins on a greener path.
Bitcoin’s mark on the environment so far
Bitcoin is the most famous cryptocurrency, given the host of benefits presented to the world and how it addressed shortcomings in the traditional financial system. It was praised for its use cases, how it boosted investors’ revenue, weathered past storms, and bounced back stronger. However, as there are always two sides to a coin, Bitcoin couldn’t make an exception. It was condemned for its energy-intensive mechanism and the greenhouse gases emitted, which are considered comparable to Greece’s.
Bitcoin is, in nature, a great energy consumer, given the techniques needed to validate transactions and add blocks to the chain. While this coin has skyrocketed in recent years, the impact of its Proof-of-Work mechanism on the environment has grown exponentially. Bitcoin uses a decentralized network to monitor transactions in the cryptocurrency to mine, or create, new Bitcoins. The miners behind them are rewarded in Bitcoin for processing transactions, even though the number of adepts has been on a downward slope, given the rising electricity costs and expensive equipment required.
As of 2022, Bitcoin mining was estimated to account for 0.1% of global greenhouse gases. This comes as a consequence of the token’s usage of energy partially produced by plants powered by coal and gas. Another environmental impact is caused by the emissions resulting from burning natural gas and coal, mainly in the form of CO2, causing air pollution. These trap Earth’s heat and cause the climate change that’s been making headlines in recent years.
Third, electronic waste is another worrying factor. Because Bitcoin’s mining rigs have a short life expectancy, they’re a catalyst behind the e-waste issue that raises concerns. Getting rid of them may lead to informal processing, polluting the environment. The rising consumption of electronic products, given the developments and digital revolution in tech, like Bitcoin, has caused a surge in e-waste problems worldwide.
Additionally, electronic scrap components like central processing units use potentially harmful materials and recycling and getting rid of them may expose employees to health risks.
More miners resort to renewable energy resources
While a significant portion of Bitcoin mining is the catalyst behind the consumption of non-renewable resources like coal and natural gas, more miners are increasingly switching to renewable energy, like hydro, solar, wind, and geothermal energy. The driver behind this undertaking is their growing affordability to fuel operations.
As stated above, creating bitcoins consumes alarmingly amounts of energy to solve complex mathematical problems and verify transactions. However, as using renewable energy resources becomes more affordable, businesses specializing in mining are turning to them to fuel their operations, minimizing their impact on the environment. Some companies also pour money into their own renewable energy projects, like wind and solar panels.
By setting up and using their own wind and solar farms, mining companies encourage the shift towards sustainable energy usage, make savings on their activities, and secure energy for their operations. A slew of miners also choose to set up their plant near existing renewable facilities, like geothermal plants or hydroelectric dams.
Rural Bitcoin mining to encourage economic development
Because relying exclusively on renewable supplies prevents power disruptions, these alternatives provide a more reliable resource for mining Bitcoin. Plus, it may lead to economic growth and development in rural areas. In Bitcoin’s context, computing off the grid, meaning using alternative computer supplies, may boost renewable resources usage in Africa. The centralized electrical grid on the continent lags behind or is inexistent in many regions. Still, grindless computing provides a solution and can allow miners to off-grid locations by consuming solar power or other eco-friendly resources.
This type of computing can also encourage the expansion of community-based mining activities, creating jobs among the jobless and acting as reliable sources of income in the areas near the plant. Consequently, these businesses can also promote the switch to these sustainable resources.
All in all, Bitcoin has the potential to become more environmentally friendly, but it takes substantial effort and works to achieve this result. While it will likely stick to its energy-consuming Proof-of-Work for the foreseeable future, other improvements can be made to contribute to fighting climate change, like switching to renewable resources.