Crypto mining: how does the production of digital currencies affect the environment?

Crypto mining: how does the production of digital currencies affect the environment?


Everyone has heard the latest rumors surrounding cryptocurrency and bitcoin. People have seen prices soar and drop to painful lows with the help of Elon Musks’ tweet or a country’s ban on Bitcoin mining.

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Everyone has heard the latest rumors surrounding cryptocurrency and bitcoin. People have seen prices soar and drop to painful lows with the help of Elon Musks’ tweet or a country’s ban on Bitcoin mining.

What is crypto mining?

Cryptocurrency is the newest digital currency secured with Kryptogrhy and based on a decentralized network that needs to be mined. This is known as crypto mining.

It is the process of validating transactions of cryptocurrencies and the records of these are stored in the form of blockchains in which each individual transaction has a separate link to a subsequent transaction, creating a chain of records.

Also read | Is Tesla’s Elon Musk a master manipulator of the markets?

Mining a bitcoin is a difficult and complex process in which experts solve complicated cryptographic equations with the help of high-tech computer systems to mine cryptocurrencies.

How is crypto mining related to coal mining?

Elon Musk’s Tesla had recently started accepting bitcoins as a valid payment method for products, but Musk soon turned around and discontinued the new payment method fearing crypto mining would have a negative impact on the environment.

This begs the question of how crypto mining, a code-based process, is affecting the environment.

Also read | Musky tweet weighs on Bitcoin, but prospects for weekly profit

The software that mines Bitcoin takes almost 10 minutes for the network participants to decipher the complex program and process a block. This process uses a large amount of electricity to produce every single bitcoin and most of the energy is consumed during the mining process.

Crypto mining is often based on electricity generated from fossil fuels. As a result, as Bitcoin prices rise, so does energy consumption. The rising bitcoin price is motivating miners to mine more bitcoins, which is attracting more people to join the new network, and energy consumption continues to rise alarmingly.

A study by the University of Cambridge found that crypto mining consumes more than 120 terawatt hours (TWh) per year, and this could be one of the top contenders in the list of top 10 energy consumers worldwide if it were a country.

Also read | Bitcoin drops below $ 40,000 after China’s new crypto ban

The situation has reached a level where companies are looking for areas of cheer flow to make the crypto mining process a bit happier and easier.

Some studies have also claimed that crypto mining could also produce enough carbon dioxide to push global warming above 2 ° C.

While the disadvantages of crypto mining are as clear as they are today, several groups are trying to come up with ideas to make cryptocurrencies more sustainable. As a proponent of cryptocurrency and owner of Tesla and SpaceX, Elon Musk has also vowed to switch back to cryptocurrencies as soon as they find a bitcoin that uses less than one percent of current energy.

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