With the value of bitcoin soaring over $18,000 USD in December 2017, people from all over the world are paying serious attention to cryptocurrencies. The industry isn’t without its criticisms, though — and one of the major ones is that crypto mining use incredible amounts of energy to mine for coins. Are the claims valid?
An Increasingly Criticized Industry
Cryptocurrency offers a viable alternative to current financial structures that:
- isolate people in remote locations from banking,
- limit the types of transactions users can make,
- threaten user privacy and personal freedoms, and
- that charge users millions of dollars every year in unnecessary fees.
However, that doesn’t make the cryptocurrency industry many fans in traditional financial and economic sectors.
In addition, according to current research, Bitcoin appears to be environmentally disruptive too — and not in the good way:
- the energy cost to mine one Bitcoin is equal to the cost to power a typical family home for one month,
- the annual energy cost to mine Bitcoin costs more than it costs to power over 159 countries for a year, and
- the annual energy cost to mine Ethereum costs more than it costs to power one country for a year.
In addition, these are only the energy costs recorded for 2016. The value of Bitcoin, Ethereum, and several other cryptocurrencies are on an incredible rise over the past several months. That means 2017 will presumably have been considerably more taxing.
Fossil Fuels Are A Big Problem
As crypto coins become more valuable, the computational demands to solve problems and get rewards for Proof-of-Work (PoW) solutions increases. This requires the use of more expensive hardware like ASIC miners and graphics cards to recover rewards. In addition, ASIC miners and graphics cards demand even more power usage.
Unfortunately, then, people are starting to use words like, “environmental hazard” to describe cryptocurrency mining because most miners are using fossil fuels like coal and natural gas for their electricity.
If crypto miners don’t do something quickly to change this perspective, Christopher Malmo of Motherboard Vice makes a comment that will likely be echoed by crypto’s critics in 2018 if changes aren’t made:
“[…] similar computing technologies exist in centralized forms that currently run much more efficiently. This isn’t to say blockchains are useless, just that there are costs to their decentralization that are borne by the environment in the absence of something like a carbon tax.”
Fortunately, though, there is light at the end of the tunnel. Several companies are making positive changes in this regard by creating viable, sustainable models for the mining of cryptocurrencies that are causing minimal environmental impact.
Standard American Mining runs an off-grid mining facility that runs on fuel created by burning tires called “syngas.” Burning tires also burns steel and produces carbon black. These substances contribute to energy production as well.
Landfilled tires leach chemicals into the ground. Burning tires instead of coal reduces carbon emissions by 18-24 percent. However, it still produces gas emissions.
Burning tires isn’t a completely green solution accordingly, but it is greener than using fossil fuels to mine coins.
Ethereum founder Vitalik Buterin has announced plans to switch to a “Proof-of-Stake” model in 2018. In this structure, “stakers” secure their coins in specialized wallets and are rewarded for locking up their capital, maintaining nodes, and ensuring their private keys are kept safe. There are also significant penalties for reverting transactions.
Perhaps the most exciting concept, Chia, has been proposed by BitTorrent creator Bram Cohen. Chia uses proofs of storage and time as proofs of value for workers to earn coins. Earning coins is referred to as “farming” rather than “mining.”
Cohen states that the Chia blockchain offers the same security as the Bitcoin blockchain yet uses minimal electricity. He describes Chia as “The Better Bitcoin.”
A New Day Is Coming
Unfortunately, if the crypto community is unable to address questions of negative environmental impact and climate change quickly, the industry’s critics will bring these issues to light.
In addition, the toll that mining could take on the environment might be immeasurable in just a few short years. However, the crypto community is proving itself to be up for the challenge.
Several companies are making solid strides in the way of positive change. Surely there are more changes to come.
Do you think the cryptomining industry will be greener by the end of 2018? What changes do you think will create the most lasting impact? Let’s hear your thoughts!
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