Cryptocurrency has become increasingly popular in recent years, but the enormous use of electricity needed for energy transactions remains one of the main concerns. Platform farms, which are essentially like server farms, consume a lot of energy and bitcoin mining operations tend to pursue cheap electricity. This has led to cities in Iran, Kazakhstan, China and Kosovo facing blackouts due to Bitcoin mining activities, leaving thousands of people without electricity or heating, sometimes for days. The most obvious environmental impact of cryptocurrencies is the electricity needed for the mining process, which is how new digital currencies are created.
While most know it as Bitcoin mining, many forms of cryptocurrency rely on mining. But since the launch of Bitcoin, it has become increasingly difficult to mint new units of currency through mining. This was by design, since the coin was capped at 21 million units, so the more units minted, the fewer units were available to extract and the more computational power needed to mint new ones.For Years, Bitcoin Critics Have Defamed The World's Largest Cryptocurrency For Polluting The Planet. But new data from Cambridge University shows that mining geography has changed dramatically over the past six months, and experts tell CNBC that this will improve bitcoin's carbon footprint.
All of that energy consumption has a significant cost to the environment.Most utilities across the country still rely heavily on fossil fuels to generate electricity, and supplying the energy needed for bitcoin mining often means burning even more fossil fuels. Late last year, a New York State utility received criticism for converting a closed coal plant into a natural gas-powered plant that would supply power to a local cryptocurrency mining operation. Even as the Biden administration moves toward the country's transition to clean energy, those climate gains risk being undermined, at least in part, by crypto mining.Initiatives such as the Bitcoin Mining Council and the Crypto Climate Accord are also developing new ways to make crypto mining and trading more energy efficient. Since the amount of energy used depends on the size of the mining network, increasing amounts of energy are needed to mine new coins.
Theomou says cryptocurrency education is the most important aspect for sustainable cryptocurrencies.However, not all cryptocurrencies are created through proof of work, so they don't require the processing power or energy to mine as proof of work currency. Patel told Recode, cryptocurrency mining companies can help by buying that excess energy and using it to run their mining operations. However, there are other cryptocurrencies that are not designed around the same mining creation as Bitcoin, such as Cardano, Nano and Chia.With all this action, what seems clear is the growing concern that Greenidge may not be the last power plant to switch to proof of work, cryptocurrency mining. Miners are promised that they will get a certain amount of energy each month for a fixed price, and in return, utilities don't have to worry about trying to account for the energy demand of those mining operations that fluctuate as equipment ages or mining rigs are put on or are disconnect.Although ASIC miners can be used to mine any cryptocurrency, they are now essential for mining Bitcoin, as the competition is very stiff.
As a result, more and more advocates are pushing for New York to completely stop converting fossil fuel plants into cryptocurrency mining facilities. The price and availability of electricity can also affect the volume of cryptocurrency mining operations.In addition, they urge the Governor and the Department of Environmental Conservation to deny permits for Greenidge and Fortistar North Tonawanda Facility, another proposed fossil fuel plant converted into a cryptocurrency mining facility in Western New York. By doing this, validators purchase a virtual mining platform that works proportionally to the amount of coins it burns, the more it burns, the faster it mines.According to Harvard Business Review (opens in a new window), the combination of energy or sources from which miners are mining will affect the real carbon emissions of cryptocurrency mining. Most recently, advocates spoke at an Assembly hearing on the topic of proof-of-work cryptocurrency mining late last month.
Many community groups, unions, companies and environmental organizations speak out against what they see as the negative impacts of proof of work cryptocurrency mining.
