Cryptocurrency has taken the world by storm. What was once touted as an inevitable disaster by some has since become the main topic of discussion from the general population, mainstream media, investors, and even billionaires.
The crypto market is currently so volatile that merely tweeting about a specific crypto from an influential power, such as the Tesla CEO, Elon Musk, has the power to make the previously falling crypto skyrocket in price and make multiple headlines. Yet even these fluctuations haven't prevented the digital currency from reaching new highs and remaining a headlining topic all across the globe.
That said, the fascinating nature of crypto and its notorious volatility isn't the only reason it has made headlines worldwide. More recently, the environmental impacts of this currency have come under scrutiny as more and more individuals are pushing for an increase in sustainable awareness.
This change in consumer demand has been so significant that crypto miners have begun frantically trying to lower their environmental footprint by adopting the method known as “stranded power.” Stranded power utilizes abandoned warehouses or power plants to gain access to dormant energy that can effectively cut out the middleman, and thus, lower the environmental footprint.
Intense Energy Consumption
In simple terms, cryptocurrency is an online version of arcade tokens. Companies around the globe can issue their form of currency that can then be bought by consumers with real money and eventually transferred for goods and services. This process is tracked by what is known as a blockchain - a technological ledger.
Crypto miners add to this ledger by utilizing complex computing systems to circulate new cryptocurrencies. This newly mined crypto is then sold to the public and therefore added to the supply chain - resulting in a generous monetary reward for the miners.
Though not all cryptocurrencies use mining, when the process is used, a large amount of energy is needed to power the computers, resulting in a relatively high environmental footprint. It is estimated that the environmental cost of Bitcoin alone accounts for .40% of the world’s total energy consumption, equivalent to the energy consumption of the entire country of Denmark. Further, the power used for only one Bitcoin transaction is enough energy to power a US home for an entire month.
Understandably, many individuals are concerned about this information as the popularity of crypto has increased substantially within the past decade, with many investors even keying it as the currency of the future. This has resulted in a growing push from some activists who advocate for lowering crypto’s environmental footprint or removing the digital currency altogether.
As per the general process of supply and demand, if a large enough group of people demand something, businesses usually work to meet that demand. With crypto, we are seeing a surge in miners actively working to decrease their footprint. One example of this comes from the mining company, Core Scientific, which has currently set up shop in an old Levi Denim factory to take advantage of the nearby hydroelectric dam to lower their energy consumption.
In theory, initiatives such as this could substantially lower cryptocurrency's environmental footprint if done correctly and efficiently. That said, many are still apprehensive about this newer type of currency as a whole, questioning if it is even worth the environmental damage at a time when concern for the planet is ever-growing.
The Future of Crypto
To better understand the true environmental impact of cryptocurrency, one would need to consider each of the many varying factors to determine if the outcome is a net negative or a net positive to the planet. Though crypto-mining is incredibly energy-intensive, taking steps such as the aforementioned can lead to a lower environmental footprint in the future.
Further, this growing consumer concern will lead to even more scientists and engineers working to minimize the currency's overall impact, perhaps by the eventual transition to alternative energy for farming. The full-on embrace of cryptocurrency could even lead to the decline of centralized banks and financial institutions which would, depending on the environmental footprint of centralized banks, actually be more sustainable.
The future of cryptocurrencies is strong and ever-growing, with likely only a slim chance of going completely out of business. Whether or not crypto will ever be 100% sustainable is a question that cannot be answered, as the scientific world is constantly changing and therefore uncovering new and more efficient alternatives.
In the future, we might just witness the discovery of an optimal energy source that can power crypto mining without releasing any emissions, effectively making the currency carbon neutral. Until then, all we can do is continue demanding sustainable alternatives and holding miners and other large emitters accountable for their environmental footprint. One thing is for sure, though, in a world that seems to be embracing this new currency, the miner's shift toward utilizing stranded power is certainly a step in the right direction.