Cryptocurrency: an Environmental Hazzard?
Updated: Dec 6, 2021
In the past few years Cryptocurrencies have seen massive growth in price and users. And the cryptocurrency market growth is expected to grow with a CAGR of 56.4% over the forecast period from 2020-2025 according to one report.
With everything happening around us regarding climate change and its impact on our day to day lives, cryptocurrency skeptics and enthusiasts must be concerned about the energy consumption of cryptocurrency mining practices. As it may cause increased carbon emissions and it may be one of the key drivers in the climate change.
Cryptocurrency Mining and Energy Consumption
While some Cryptocurrency mining supporters underestimate the impact of energy consumption claiming that cryptocurrency mining facilities are concentrated in areas with surplus renewable energy. These supporters usually defend their cause by citing reports funded by pro-crypto currency firms claiming that over 74% of the electricity powering the bitcoin network came from renewable sources, concluding that bitcoin mining "more renewables-driven than almost every other large-scale industry in the world.". On the other hand, an independent research stated that only 39% of bitcoin mining comes from renewable energy.
Digital currencies and fossil fuel
According to a study at the University of Cambridge, around 65% of bitcoin mining takes place in China, a country that generates most of its electricity by burning coal. Coal burning contributes significantly to climate change due to the carbon dioxide that is produced in the process. According to a report by CNBC, bitcoin mining accounts for about 35.95 million tons of carbon dioxide emissions each year—about the same amount as New Zealand.
Other Environmental Impacts of Cryptocurrency Mining
Energy consumption is not the only way cryptocurrency mining impacts the environment. Electronic waste is becoming an alarming issue for anyone who follows the news. Especially hardware used to mine cryptocurrency, Application Specific Integrated Circuits are specialized hardware extremely popular for cryptocurrency mining.
These circuits, unlike other hardware are not reusable and can quickly become obsolete. According to Digiconomist, the bitcoin network generates between eight and 12 thousand tons of electronic waste every year.
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