When I delved deeper into reading about crypto, I discovered something that surprised me. I did not know that mining or using digital currencies has a negative impact on the environment. New information for me, but really a shocking information. Most traders are happy to use these cryptocurrencies because they are a source of quick and effortless profit, to the extent that an individual can reach outrageous wealth. Well, everyone loves money without exception, but have we thought about the harm caused by these currencies or mining in general?!!!
Perhaps there are those who really care, according to my humble opinion, but are there ways to prevent the harm caused and do investors prefer money over their environment where they live and belong.
A question arises in our minds about the relationship of an intangible virtual digital currency to the climate, and how it causes significant environmental damage?
The answer lies in how to mine digital currencies.
Bitcoin mining is the process of creating a new currency by using computers to solve algorithms and decipher complex mathematical codes. Bitcoin users, euphemistically called "miners," store and record data and transactions in accounting chains, each called a "block chain," which is more like a public ledger in the accounting world.
At first, “miners” could mine cryptocurrency using their personal computers, but as the price of digital currency rose, more efficient and efficient hardware was required, which meant more power consumption, and more environmental damage.
How big is the environmental damage to cryptocurrency?
Indeed, cryptocurrency mining leaves a large carbon footprint, and it is not possible to mine it without negative effects.
Over the years, the popularity of the digital currency has increased and its prices have fluctuated greatly, as much as the competition grew, the damage that this phenomenon poses to the environment experts increases and recall for scrutiny and reconsideration to take strict action on it.
According to the Cambridge Center for Alternative Finance (CCAF), cryptocurrency mining consumes about 110 TWh of energy annually, or 0.55 percent of the world's energy production.
For example, China does the majority of its bitcoin mining with cheap coal power in the Xinjiang region, according to several reports.
Even Elon Musk, who is fond of cryptocurrencies, warned of the great danger related to this phenomenon. In his post on Twitter, he expressed his concern “about the rapid rise in the use of fossil fuels in mining Bitcoin and conducting cryptocurrency transactions, especially coal, which emits the worst emissions of all fuels.”
Can cryptocurrency be mined in a non-polluting way?
It is known that high energy use does not necessarily mean high levels of greenhouse gas emissions. According to the Harvard Business Review, the carbon footprint of Bitcoin mining really depends on the energy sources used.
For the most part, Bitcoin producers, otherwise, miners have adopted a renewable energy policy in this area because it is considered cost-effective.
Iceland, for example, is considered a hub for cryptocurrency mining due to its low-cost geothermal energy and cool climate, which helps cool the machines.
Meanwhile, hydropower resources in Quebec and British Columbia in Canada, and wind power in Texas have attracted cryptocurrency miners.
Miners have even restarted abandoned hydroelectric plants in the US to generate power for cryptocurrency mining.
Hopefully, on going deeper in my readings about crypto versus the environment, I found out that there are Environmentally friendly digital currencies which use renewable energies such as solar energy and wind energy to generate them. Thus, its carbon footprint is very small compared to what is left behind by mining digital currencies that are not environmentally friendly, such as Bitcoin.
According to experts, there are 10 most important green digital or eco friendly currencies to investment:
1-POWR :was one of the first cryptocurrencies to see a surge in 2022, this eco-friendly cryptocurrency's goal is to decentralise the energy market, giving consumers more choice
2-SolarCoin:
SolarCoin is a global, decentralized cryptocurrency, but it is unlike any other cryptocurrency.
3-Algorand:
Algorand is one of the cryptocurrencies that announced in April 2021 that their blockchain is completely carbon neutral.
4-BitGreen :
was created as a reaction to Bitcoin keeping in mind its environmental impact.
5-Chia:
Chia created by Bram Cohen can be extracted from BitTorrent on the Amazon Web Services cloud computing platform.
6-Stellar :
is overseen by the Stellar Development Foundation and the network was launched in 2014.It allows faster and cost-effective transaction placement.
7-Tronix:
Tronix is pre-mined and can be traded on Binance and other platforms, with big plans for the future of the TRO including using it to create decentralized gaming platforms.
8-IOTA: is not based on a blockchain, instead this cryptocurrency uses a crypto-based verification method called Directed Acyclic Graph.
9-Cardano: is inherently more energy efficient than Bitcoin. It helps save a huge amount of energy as the founder of Cardano claimed that the cryptocurrency network only consumes 6 GWh of energy.
10-Nano:
It uses block-lattice technology and is energy efficient, as it is still based on the proof-of-work mechanism, but the chain-link network bypasses the blockchain to create a chain of accounts for each user on the network.
There are other eco friendly crypto currencies like Ripple, Solana, DEVVIO...
I wonder, would people be aware of the seriousness of mining damage to our environment, or would greed for money and passion for technology close the eyes to the future of our green world and Mother Earth?!!
If it is necessary to use digital currencies, then it is necessary to find resolutions that reduce the percentage of damage that occurs according to them or eliminate them, and who knows, perhaps a new revolution will occur in the world of finance and business, and digital currencies will become transcendent to be replaced by innovative financial transaction methods. We hope that innovation in the future will have mercy on humanity and on our planet.
Meanwhile, The question remains pending, do these so called eco friendly digital currencies really have no negative effects on the nature and on climate, or are they just allegations of money and business owners to hide the truth about the damages of mining being a cause of global warming?!!!. Perhaps in the future, there may be clear answers on the topic, with all the transparency that we are waiting for, as interested in what is happening in our green planet .
Thanks for taking time to read.
Resources :
https://currency.com/the-most-eco-friendly-cryptocurrencies
https://news.climate.columbia.edu/2021/09/20/bitcoins-impacts-on-climate-and-the-environment/
https://earthjustice.org/feature/cryptocurrency-mining-environmental-impacts
https://www.investopedia.com/tech/whats-environmental-impact-cryptocurrency/
