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Causes

Causes

Bitcoin was created in 2009. Since then, thousands of them have entered the financial currency circulation. Cryptocurrency gained popularity due to its virtuality. Bitcoin offers anonymity, freedom from sales tax, and government interference. However, it adversely impacts the economy and the environment. The special computers which are involved in transactions require substantial amounts of electricity. Almost all the impact is due to the mining equipment, especially their geographical locations. Though the speeding up of climatic change due to mining is because of the popularity of cryptocurrency, it could also prove to be the biggest obstacle to its growth.

Effects

Effects

Bitcoin consumes 0.34% of the world’s total electricity production, accounting for 0.4% of the total consumption! This enormous amount is sufficient to power all the tea kettles in the UK for 19 years! The miners spend more time producing cryptocurrencies that are steadily becoming scarce. As a result, the global consumption rate increases further. The dependence on dirty resources like coal to produce electricity using thermal power plants causes a significant increase in carbon emissions. Due to this, Bitcoin is one of the reasons behind global warming and environmental problems.

Cryptocurrency Mining

Cryptocurrency Mining

The term “cryptocurrency mining” is one of the most controversial topics these days. While many seem to work out a profit in cryptocurrency mining, it is not that rewarding as calculations show that the investment made is over the revenue earned. However, its volatility is more concerning than its energy consumption. Other cryptocurrencies like Ethereum and Litecoin are growing widely, adding pressure to global energy consumption. The cryptocurrency mining process is extremely energy-consuming. It is so extensive that it can power the US household for a month. The carbon footprint due to the Bitcoin miners worldwide is about 17 megatons on average, every year and the numbers are to increase in the upcoming years. Cryptocurrency mining can raise the temperature of Earth by over 2 degrees Celsius in about thirty years. The number of miners for cryptocurrencies has risen exponentially over the past few years. With better technological advancements in miners, the consumption of electricity has augmented. The miners used for cryptocurrencies are highly occupation-specific and add additional pressure on energy consumption. The latest miners require twice as much electricity due to their sophistication. Moreover, the biohazard miners add a threat to the environment since most of their parts are non-biodegradable.

Statistics of Cryptocurrency Mining

Statistics

Large strains on the energy sector with continuously running machines, as the computers in transactions require an extensive power supply. A typical server costs about 6,200 US dollars, consuming approximately 1.5 kilowatts of energy to mine a single Bitcoin. The Bitcoin network consumed more than 2.55 gigawatts of electricity in 2018. The equivalent net power consumption of Bitcoin had the potential to swell up to 7.67 gigawatts. This much is enough to run a small country! The energy usage levels of Bitcoin mining farms superseded those of entire nations such as Ireland (3.1 gigawatts) and Austria (8.2 gigawatts) after 2018. Due to geographical reasons, countries like China account for approximately 85% of the world’s trading transactions and host crypto-mines that contribute 74% to the Bitcoin mining hash rates.

Implications for Future

Future

To mitigate the impact of crypto-mining activities on the energy sector, local and federal governments need to create a regulatory environment that manages the impact-including federal support and local efforts to grapple with this global phenomenon. The unbalanced energy consumptions that mining operations impose on communities require strict energy regulations to sustain mining businesses while simultaneously protecting the local community’s access to affordable energy. Policymakers should consider ways to curb rogue operators while maintaining a balance between public safety and economic development.

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