Is cryptocurrency bad for the environment? How mining impacts the environment?

Blockchain has the potential to transform our world in a variety of ways. It can give digital wallets to unbanked individuals, combat fraud and replace inefficient systems with more efficient ones. However, we still require this new and improved environment to be one in which we wish to live. The major cryptocurrencies, Bitcoin, Bitcoin Cash and Ethereum require massive amounts of energy to operate. Blockchain consumed more electricity last year than 159 individual countries, including Uruguay, Nigeria and Ireland. Unsurprisingly, this is causing major environmental issues.

Why energy is required in cryptocurrency mining?

The high energy consumption of crypto mining is a benefit, not a flaw. Mine for Bitcoin or any proof-of-work (PoW) cryptocurrency, like mining for actual gold, is designed to use a significant amount of energy. The technique is meant to make taking control of a complete crypto network prohibitively expensive (but not impossible).

Cryptocurrency supporters claim that this decentralized structure has several advantages over centralized currency systems because cryptocurrency networks may operate without the need for a trusted middleman such as a central bank. Miners, rather than any centralized authority, employ massive quantities of computer power to administer and secure a cryptocurrency network.

Environmental Impact of Bitcoin Mining?

Higher processing power enhances the possibility of correctly guessing the PoW solution, incentivizing miners to organize mining pools or establish mining farm facilities. A mining pool is a collection of miners who, each with their own power-intensive equipment, attempt to solve the problem at the same time and then split the rewards based on how much “effort” or processing power each miner provided.

A mining farm, on the other hand, is a data center composed of hundreds, if not thousands, of ASIC servers that continuously mine for Bitcoins. While the concentration of many computers into one location encourages energy consumption reduction and the specialized ASIC gear was intended to utilize energy more effectively, these mining farms still require large quantities of electricity to run them.

In all, Bitcoin mining consumes 91 TwH of power every year, accounting for around 0.5 percent of global electricity use, more than Finland’s annual electricity usage and seven times more than Google’s yearly consumption.

Ways to reduce Bitcoin pollution:

Bitcoin acquisition is analogous to diamond mining. Finding more diamonds necessitates a larger expenditure to allow for deeper digging. The Bitcoin system operates similarly: getting more Bitcoins necessitates more power. As the Bitcoin economy expands, the total amount of power consumed by each individual transaction will skyrocket. Let’s now have a look at popular bitcoin pollution reducing steps that help in the sustainability of the environment.

Towards Net-Zero:

If reducing real emissions to zero is challenging, explore how carbon offsetting might assist. Even while it does not lower system emissions, it allows businesses and individuals to offset their environmental effect by investing in environmental initiatives. These initiatives, in turn, contribute to a reduction in global CO2 emissions. Emerging firms such as ImpactScope are now providing a wide range of offsetting solutions that may be used in this context. It is feasible to achieve net zero emissions by creating a balance between carbon emitted and removed. This does not change the fact that fossil fuels are better kept in the ground, but it may be especially enticing for Ethereum ecosystem participants, who aim to transition from proof-of-work to proof-of-stake in the coming months. However, there are obvious cases of carbon offsetting being exploited. In New York, an idle gas plant was reactivated to mine Bitcoin. Following that, the operator decided to become “carbon neutral” by implementing offset solutions. It is consequently advisable to evaluate this option on a case-by-case basis, although it is usually preferable than doing nothing.

Blockchain Mining for Green Energy:

Mining using solar power and other green energy sources is an instant solution. Every day, Texas receives more solar electricity than is required to replace all non-solar power plants in the globe. There are various commercial services available for running cryptocurrency mining on server farms using exclusively clean, renewable energy. Genesis Mining, for example, provides cloud mining for Bitcoin and Ethereum. The Iceland-based firm utilizes only renewable energy and has grown to become one of the world’s largest miners.

Green energy must also be incentivized for future blockchains. Every firm that uses blockchain has its own strategy for compensating miners. New blockchains might simply provide miners more incentives for utilizing green energy, such as more money, gradually driving out polluting miners. They might also demand that all miners demonstrate that they utilize green energy and refuse to compensate those who do not.

Delegated Proof of Stake (DPoS) system:

Delegated Proof of Stake (DPoS) system that functions in a manner similar to a representative democracy. Everyone with cryptocurrency tokens may vote on which servers become block producers and administer the blockchain as a whole in DPoS systems. However, there is one drawback. DPoS is less resistant to censorship than Proof of Work solutions. Because it only has 21 block producers, the network might be ground to a halt by simultaneous subpoenas or cease and desist orders, leaving it more vulnerable to Ethereum’s hundreds upon thousands of nodes. However, DPos has proved to be far faster at processing transactions while consuming less energy, which is a compromise that the industry should be ready to accept.

Bitcoin future is really Green:

According to Bradford, Bitcoin mining is the first significant investment in decades to help boost North America’s current energy infrastructure since Bitcoin not only increases energy consumption in locations where it is mined but also enhances that region’s energy producing capacity, adding:

“This is a key aspect that is sometimes lost in the ideological struggle. North America’s energy consumption is going to grow a lot over the next decade as electric vehicles become more mainstream. In California, EVs are already straining the state’s power grid. California’s present is North America’s future.”


Despite its significant potential benefits, Bitcoin mining is intended to use a lot of energy. Even the authentication procedure required for Bitcoin trading is a polluting activity. Bitcoin mining and trading may stymie government efforts to preserve energy and prevent climate change due to high rates of electricity usage and emission. However, by taking the necessary actions, we can preserve energy while also protecting the environment.

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