Environmental Impacts of Cryptocurrency Mining

One unintended consequence of introducing cryptocurrencies has been the way these digital currencies are actually obtained – usually through the use of vast amounts of computational power that, in turn, puts a huge demand on electrical consumption. Of course, not all ways of obtaining cryptocurrencies have been as challenging. 

Much like you would like to get basic info on Spirit Casino, figuring out how crypto mining works and whether it’s environmentally friendly is a matter of acquainting yourself with the facts. Let’s take a look at cryptocurrencies’ environmental impact and what to expect in general. 

How is Crypto Made or Gained by Its Users?

Cryptocurrencies did not come out of thin air – naturally. They are a piece of digital code that can exist on its own, more or less. The blockchain is based on the cooperation of strangers who have some share of the total amount that is in circulation.

Mining: The Traditional Method

First and foremost, how are cryptocurrencies created after the initial code is written – well, it’s down to mostly a practice known as “mining,” whereby cryptocurrencies such as Bitcoin will be granted to people whose computers are plugged into networks trying to solve increasingly complex mathematical problems.

The combined computing power then yields new currency that is distributed amongst the people who have contributed to the minting process through their participation. This is perhaps the most energy-intensive way of extracting cryptocurrency, and, as you can expect, it is also the one that takes the heaviest environmental toll. 

Proof of Stake: The Modern Alternative

Of course, this is not the only way to generate cryptocurrencies. There is another way to mine crypto. Proof of stake has actually become a super popular way. The so-called Proof of Stake method is very simple. You lock in some amount of money, usually a FIAT currency, and then more crypto of a certain PoS-type is created.

This way, the network grows organically, the costs are kept to a minimum, and the cryptocurrencies are arguably more eco-friendly. Of course, these methods also have their critics, but this is at least a time-tested and trusted option for the most part. 

Cryptocurrencies Have an EV Problem

Bringing electric vehicles into the conversation may seem a little out of the blue, but trust us when we say this – it is not. EVs have a very similar problem about eco-friendliness, which is that the energy they use needs to come from sustainable sources, i.e., renewables. Otherwise, you get these expensive cars that weigh more and end up clogging the planet a bit less, but still do. So, what’s the point?

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The point is that being sustainable means having sustainable sources of energy, and this is a problem that cryptocurrencies have, but not for long. In fact, the prohibitive costs of tapping into conventional electricity grids mean that companies are already figuring out ways to slash costs and keep the hardware from overcooling. Solar is a great way to mine crypto, but then there are other clever ideas:

• Servers are buried in the north to keep machines low while extracting locally-sourced power sources that produce energy in abundance
• Geothermal energy and even tapping into volcanism have been some interesting ways to offset the energy dependency on crypto

Overall, however, crypto needs to implement more energy sources to be a success, and here comes the problem: extreme amounts of energy are in huge demand. Why? Because the AI and AGI boom is set to require ever more power to deliver on its promises, whether it’s OpenAI or DeepMind. 

So, Is Crypto Eco-Friendly in the End?

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Crypto is walking on thin ice. Boasting that it is sustainable is a hard sale even for the biggest supporters of the trend. Energy is in huge demand, and most crypto requires lots and lots of it. As Roulette77 likes to say – just because you have a good strategy, it doesn’t mean you are going to win. 

As more challenges mount, crypto is unlikely to suddenly become more sustainable. However, there are great examples of the industry trying to differentiate itself from anyone who argues that it is purposefully malignant as well.

Many companies have made business decisions based on their desire to actually achieve a level of eco-friendliness that rivals are only talking about. But this does not mean that everyone is trying. Conversely, while there is a lot more that can be done to ensure that cryptocurrencies remain more eco-friendly than they are, there are positive signs already underway.

The why behind this trend is easy to guess. Eco-friendliness is often tied to how sustainable a business model is. If it’s too costly for the environment, it’s probably already costing you too much as a business. There is nothing to be surprised about here at all.