Is Bitcoin Mining Harming the Environment?
Bitcoin, the very first cryptocurrency made headlines by reaching its all-time high in valuation which amounted to $20k. However, since then the price has been fluctuating. There have been numerous instances of price crashes, volatility
Since then, we’ve seen fluctuation, price crashes, and other issues. But there is no denying that Bitcoin has only grown since its birth in 2009. It is one of the most popular cryptos out there, but the point of this article is somewhat different.
The growth and popularity of Bitcoin have raised concerns among environmentalists. There are significant concerns and speculation that Bitcoin mining is causing harm to the environment. Bitcoin mining causes the consumption of massive amounts of energy that go against environmental regulations. The energy is spent due to substantial computation that is needed to keep the digital currency thriving.
The environmental concern is because Bitcoin cannot work or exist without the use of computers, which in turn uses a considerable amount of electricity. The growing popularity of Bitcoin and with more people transacting and investing in the cryptocurrency has led to an urgency for more volumes of a computer.
Read More: Eco-friendly Substitutes to Conventional Bitcoin Mining
It is the job of the Bitcoin miners to solve unique and complicated puzzles or rather equations to unlock the crypto. As the value surges the equations become more complex which requires more computational power for solving. Let’s take the situation of China for instance. Over 60 percent of the processing power that is used to mine Bitcoin happens to be in this country that is heavily dependent on coal for energy. Now, it is known to all the amount of environmental damage caused by excess carbon dioxide produced by coal when it is burned.
Read More: Crypto Energy Consumption: How Green is Blockchain Technology?
Here the root cause of this issue is the consensus mechanism that is being used by Bitcoin miners. They use the Proof of Work mechanism for block generation that is known to be time-consuming, complex, and demands heavy computational power. The solution is not to stop mining Bitcoin, but to look for alternative consensus mechanisms such as the Federated Byzantine Agreement, that is used by reputed software companies like HashCash Consultants. It is cost-effective, fast and scalable with high throughput. Unlike PoW is takes considerably less amount of power for processing and mining of crypto, contributing to low energy consumption.
