Can Crypto Mining Be Eco-Friendly?
Energy is needed to power the computers that are used in crypto mining as these systems verify and record cryptocurrency transactions. In many use cases (mostly typical ones including crypto mining) involving the use of energy, the generation of that energy may include the burning of coal or other fossil fuels, which is a source of carbon emissions that contribute to the acceleration of climate change.
A solution to this is the ‘green’ cryptocurrency mining method that makes use of renewable energy sources such as solar power, hydroelectric power, and nuclear energy, all of which release very little or no carbon into the atmosphere. Thus, providing a much more eco-friendly way to mine digital currencies.
Crypto mining is carbon-intensive
Because it is a carbon-intensive operation that requires a significant amount of power, many business executives and entrepreneurs, including Elon Musk and Janet Yellen, have expressed their concerns about the long-term viability of cryptocurrency mining. Carbon emissions from the burning of fossil fuels, it is generally agreed among scientists, are the primary cause of catastrophic and previously unheard-of levels of climate change on a worldwide scale.
… But it doesn’t always have to be
However, it is a common fallacy that the only kind of energy that can be used for cryptocurrency mining is fossil fuels. According to a study conducted in 2020 by the Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge Judge Business School, it was discovered that a number of cryptocurrency miners who were the participants in the survey obtained their energy from renewable energy sources. This was one of the findings of the study: The respondents to their poll on bitcoin miners revealed that renewable energy sources are used to power 29 percent of their operations. A growing number of cryptocurrency miners are switching to renewable energy sources in an effort to seek income while being eco-friendly.
The astonishing amount of energy that Bitcoin consumes is essential to the way in which its blockchain technology works. The process of completing challenging mathematical riddles, known as “proof of work” is how new bitcoins are mined. Because of this, the blockchain network is guaranteed to be decentralized. However, because miners are racing to find solutions to these challenges first, it requires an enormous amount of computing power.
More than two hundred businesses and individuals have come together to form the Crypto Climate Accord over the past year. In doing so, they have pledged to achieve net-zero emissions from their operations by the year 2030. This will primarily be accomplished through the utilization of renewable energy sources.
Zero carbon vs Carbon neutral
The term “carbon neutral” involves a process that does not aim to increase carbon emissions while also aiming to achieve carbon reduction through offsets. While achieving net-zero carbon emissions requires making improvements to cut carbon emissions to the lowest amount possible and only resorting to offsetting as a last resort. After all of the possible emission reduction strategies have been put into place, offsetting is utilized to compensate for the essential emissions that are still present.
Carbon neutral was picked as the word of the year by the New Oxford American Dictionary in 2006, and ever since then, it has been thrust into the forefront of the global community. Carbon-neutral, also known as carbon neutrality, refers to a state in which the amount of carbon dioxide released into the atmosphere is equal to the amount of carbon dioxide absorbed by carbon sinks. Or one could simply do away with all emissions of carbon altogether. Forests, soils, and oceans are all examples of carbon sinks since they are systems that take in more carbon than they give off.
Crypto mining transforming the energy sector
Rapid development in crypto’s energy consumption raises issues about its sustainability. Currently, 57% of the energy needed for cryptocurrency mining is derived from renewable sources — hydro, wind, solar, nuclear, geothermal, and carbon generation with carbon offsets as defined by the Bitcoin Mining Council Q3 2021 Report. Given the intrinsic incentive for miners to minimize energy costs and the fact that clean energy is presently the cheapest source of energy in some nations, we can anticipate a rapid increase in the proportion of green energy. This is especially true for nations with aggressive decarbonization policies.
In simple terms, if miners use cheaper renewable energy to mine cryptocurrencies, they will greatly lower their costs, allowing them to profit more. As a result, more people will turn to renewables as their main source of energy, eventually allowing for a greener environment.
When can crypto mining be “truly” green?
Making cryptocurrency mining “green” is, in fact, easier said than done. As more people become concerned about the amount of energy that is being consumed in the mining of cryptocurrencies, a steady stream of new projects to enhance the environmental credentials of the industry are being developed. These include the growing use of energy sources that are renewable, the implementation of protocols that are more energy-efficient, and the offsetting of carbon footprints.
According to TRG Datacenters, the development of new cryptocurrencies that are more environmentally friendly and sustainable will be steadily flowing into the crypto landscape in the near future, along with significant shifts in the ways that existing cryptocurrencies are used.
