Mining, environment, and GamerHash
The rapidly developing cryptocurrency sphere is facing a lot of challenges, and it’s our goal to discuss them while educating people about crypto. There are scalability, decentralization, and speed issues. Yet in this article, we will talk about the challenge that seems to be the most important — the environment and energy usage of cryptocurrencies. First, we would like to talk about how GamerHash is pointing towards eco-solutions and then look closer at the worldwide energy usage with Bitcoin and Proof-of-Work algorithm.
GamerHash & Polygon partnership
Last week, we have announced the partnership with the most prominent layer-2 solutions on Ethereum — Polygon! This partnership will bring additional scalability and carbon footprint reduction to GamerHash. It is an especially important announcement when it comes to our roadmap and future introduction of an NFT marketplace for gamers, as we expect hundreds of transactions performed there.
In the paragraphs below, we will explore the data behind Bitcoin mining (the biggest contributor to carbon footprint in the crypto space). Nevertheless, we acknowledge that the Ethereum network (and ERC-20 tokens such as $GHX) still the second-largest Proof-of-Work blockchain in the world, and it’s also contributing to pollution. This is why we are so proud of our $MATIC partnership — our users will be more “ECO” while using our future NFT marketplace and their transaction cost is going to be greatly reduced.
Mining at GamerHash and environment
GamerHash promotes decentralization and responsible energy usage when mining. The platform is made for gamers, and we don’t encourage people to mine on 20 GPU mining rigs — just your own gaming PC. In most cases, our computer would be ON and running during the day and night anyway. This way we are allocating the energy that would be used anyway into mining, and we are using energy inefficiencies. GamerHash mining is in a big part based on the electricity that would be wasted anyway.
There are three eras of money: commodity-based, politically based, math-based.
Chris Dixon
At GamerHash we want to decentralize math-based currencies in a greener way, and make mining available for everyone!
How much energy BITCOIN uses?
We have heard it a lot of times. Bitcoin uses (or used at some point) as much energy as Argentina, Malaysia, and Sweden. To understand what that great amount of energy means, we have to look at other payment systems and solutions and compare them. We need to look into the numbers, comparisons, renewable energy usage. We will focus mostly on Bitcoin and not other cryptocurrencies as it is where the most data available and BTC is consuming the most of the mining energy in the world.
How big is electricity Bitcoin mining usage?
Bitcoin itself uses around 100–150 TWh per annum, which can amount to around 0,55% energy usage in the world. Yet, the answer to the question of how big should be the energy usage of the monetary system will depend on the personal point of view. For people not believing in the values standing behind Bitcoin (like free capital flow or decentralization), this amount of energy used is just extremely wasteful. On the other hand, we are talking here about a global monetary system that can be used everywhere and in the big part is fueled by green energy.
Let’s compare
This year’s report by Galaxy Digital shed light on the Bitcoin mining usage and compared the data with other “monetary” industries: gold and banking energy consumption. It showed that in both cases, the energy needed to fuel those industries is twice as big as the energy needed for Bitcoin.
Other, more visual, comparisons created by the University of Cambridge also show the way we can look at mining and energy production. According to the Cambridge Bitcoin Energy index website, we could easily power the Bitcoin network with renewables such as hydro, biofuels, and wind.
The authors of the index additionally point out that:
The amount of electricity consumed every year by always-on but inactive home devices in the USA alone could power the Bitcoin network for 1.9 years.
Energy inefficiencies
Most of us probably at least once in our lifetime saw the inefficiencies of the energy industry like burning natural gas.
Energy production often leaves us with the excess of the power that is utilized in a non-ecological way, for example, burning. Crypto mining can be an easy way to utilize this energy (which tends to be the cheapest) while having a better environmental impact. This is how Galaxy Digital puts it:
“This makes Bitcoin mining the ideal energy sink: anyone, anywhere, can monetize excess energy by plugging in the equipment and switching it off at their convenience. One example of where Bitcoin mining acts as an energy sink is in oil fields, resulting in a direct reduction in methane emissions.”
Renewable Energy
Using renewable energy for Bitcoin mining makes sense as this kind of energy is usually cheaper. The question is how much of the renewable energy usage goes for Bitcoin mining?
The answer is not that simple as according to different sources this amount can vary from 39% (Cambridge) to 74% (Ark Capital). One thing we can say for sure with this data — Bitcoin mining is more “renewable” on average than other activities, as the global share of renewables in the world is 25%.
We can expect developments in the more “eco” mining in the future with the recent news from Elon Musk and Square (Jack Dorsey) who seem to be committed to making future mining renewable.
Elon Musk wants to make more public the way energy is used and Jack Dorsey aka Square already announced investing $5 M into making the renewable energy mining facility in the US.
On the other hand, there is great hope in the exodus of Bitcoin miners from China, where crypto mining was banned by officials recently. Most of them moved to Kazakhstan which is close and where energy is cheaper, and at the same time, there is a great potential to increase the amount of hydro and wind in the energy mix.
Summary
At GamerHash we deeply care about the environment, and we constantly implement ways to continue our mission while allowing our users to stay green. GamerCoin transactions are soon to be 99% less impactful in the carbon footprint department with a second layer solution from Polygon. Users who mine at GamerHash can be considered more eco-friendly, too. They are gamers, and they mostly mine when their PC is ON and in use.
When it comes to Bitcoin energy usage, we should be careful when judging, like other financial services in the world use multiple times more energy for the same purpose.
