How does cryptocurrency mining affect the environment?

Many companies move their farms to sites where they can implement alternative mechanisms of energy production.

The enormous energy expenditure of mining

Many people believe that cryptocurrencies aim to become the currency of the future, which has produced an increasing growth in the activity of cryptocurrency mining, while new digital currencies emerge every day.

However, the execution of cryptocurrency mining presents a huge drawback, which in turn represents a huge negative impact on the environment in reference to energy expenditure. The energy consumption for the production of cryptocurrencies has skyrocketed in the last year due to the great complexity of mathematical calculations required for their extraction, which leads companies to focus their efforts on the development of more environmentally friendly production alternatives. .

Bitcoin and its impact on the environment

Bitcoin is currently the most undermined cryptocurrency in the world, which has become one more factor of environmental impact due to the great need of processors that require miners to solve complex algorithms, called labor test. The use of the miners of “supercomputers” to solve the difficulties of mathematical puzzles, which are increasingly complicated all working at the time and without rest to obtain the same amount of bitcoins, leads to stress to the maximum the supercomputers, to so that mining does not lower its performance. The more amount of hashes the computer has to mine, the more electrical power it will consume.

Currently, 41 TWh are needed annually to operate the computers and avid energy networks that drive bitcoin transactions. This means that this activity consumes more energy than the annual consumption of a country such as New Zealand, Hungary or Qatar, this corresponds to approximately 0.13% of total world electricity consumption.

In search of alternatives

The most optimal conditions for the mining of cryptocurrencies require access to electricity, a cold place and not too humid, with temperatures between 4 ° C and -12 ° C, which generally must be created by miners, which impacts on huge economic but above all energy costs. This situation is further aggravated by the fact that the largest percentage of cryptocurrency mining is located in countries such as China, where the production of electricity is based on coal, with the known consequence of pollution and environmental deterioration.

Faced with this reality, the alert of the energy impact produced by this new industry leads companies to focus on the search for energy alternatives. In this regard, several ecological cryptocurrencies have been developed, the first of which is SolarCoin, which works through electricity coming from photovoltaic solar energy, which would aim to reduce the carbon footprint of the planet.

Likewise, in recent years more efficient algorithms have been developed than Bitcoin so as not to require computers that consume as many hashes per second as possible. In November last year the creator of BitTorrent, Bram Cohen founded a company called Chia to create a cryptocurrency that is less wasteful, improving the efficiency of Bitcoin’s blockchain.

There are places on the planet where energy production is relatively cheap and where, in addition, the impact on the environment is lower in proportion to other places on the planet, depends on which source of power generation is being used (hydroelectric, thermoelectric, solar , wind, etc.), therefore the cost of mining can fluctuate, however, it is still very profitable, for this reason many companies move their farms to places where they can implement alternative mechanisms of energy production.

These mechanisms use geological, meteorological or environmental conditions to implement technologies for the production of energy such as wind, hydroelectric, geothermal, etc.

Surely the mining of cryptocurrencies is an innovative and disruptive industry that aspires to break with the traditional economic systems, it will also focus its efforts in breaking with the already traditional negative effects for the environment of the traditional industries.

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