Crypto Mining Explained⛏
Proof of work is essentially meant to simulate real world resource mining in a digital way with complex equations, hence why cryptocurrency is ‘mined’ by specialized computers called ‘miners.’
There are over 1 million Bitcoin miners around the world, and that’s in addition to the millions of miners processing transactions for other proof of stake cryptocurrency networks like Ethereum and Litecoin.
All this cryptocurrency mining is using a lot of energy and this has many people concerned about the effect cryptocurrency mining could be having on the climate.
🕵️♂Bitcoin Mining Climate Claims🕵️♂
Although concerns about crypto’s effect on the climate have been around since Bitcoin began back in 2009, it wasn’t until the 2017 crypto market boom that these concerns started to make the news.
Many of the headlines we see today are almost identical to the ones we saw back then, and most of the statistics cited by today’s and yesterday’s crypto climate critics all come from a single source.
This source is an academic article published in 2018 to nature’s climate change journal. It argues that emissions from Bitcoin mining alone could increase the global temperature by 2 degrees.
When you consider Bitcoin’s comparatively small energy consumption on the global scale, the numbers from this article don’t add up.
⚡Bitcoin Mining Energy Use⚡
Nobody is actually sure how much energy Bitcoin mining uses. The University of Cambridge estimates it could be anywhere between 40 and 440 terawatts per year.
For context, the Netherlands uses 121 terawatts of energy per year, Argentina uses 300 terawatts, and the United States uses a whopping 4000 terawatts.
Bitcoin is not a country, it is a financial system, and when you compare apples to apples, cryptocurrency offers the most energy efficient financial system in the world.
☀Green Energy Bitcoin Mining☀
Cryptocurrency mining has accelerated the growth of green energy. This is because miners go to where power is the cheapest, because cheaper power means more profits.
As it so happens, renewable energy sources like wind, solar, geothermal, and hydroelectric cost half as much as coal and natural gas.
While the University of Cambridge estimates 40% of all Bitcoin miners use renewable energy, recent statistics suggest this figure could be as high as 70 percent.
