Opinion Business Markets Software Technology
June 13, 2024

Mining for Trouble: The Environmental Toll of Cryptocurrency Mining in 2024

In Brief

The crypto industry, despite its commitment to sustainable technologies and green projects, faces environmental challenges from its core pillar of cryptocurrency mining, despite recent negative press.

As people around the world call for an earth-friendly future, the crypto industry, like any other sector, puts a premium on sustainable technologies and green projects. But, at the same time, the industry is still haunted by the environmental impacts of cryptocurrency mining, a core pillar of its existence. 

In recent years, there has been some bad press and bleak statistics about mining and the environment. But, looking past the records, has the crypto industry made any promising moves toward a greener tomorrow?  

Why Can Crypto Mining Harm the Environment?

The main point about the environmental impacts of mining concerns the energy source, hardware, and techniques used to mine crypto. With the growing complexity of the mathematical problems that miners must answer, the energy required for mining is rising significantly. 

Also, with the growing adoption of crypto, mining turns into a race for profits, which can be damaging in the long term.

Let’s dig a bit deeper.

Crypto Mining & Fossil Fuels

Some argue that cryptocurrency mining increases carbon emissions due to its high energy usage, especially when using fossil fuels. Since nonrenewable energy sources are often the cheapest and easiest for miners to get, this rising desire can be ultimately detrimental.

Cryptocurrency mining uses fossil fuels, which adds to the stress on local power grids, releases greenhouse gasses, and may cause resource loss in areas where mining is common.

Bitcoin mining, for example, is a major energy consumer. As of June 2024, it requires about 17.05 GW every day. It equals 150 terawatt-hours per year, which is more than Pakistan, Ukraine, and many other countries. 

Is the Impact the Same for All Cryptocurrencies?

The ecological footprint of various cryptocurrencies is not the same at all. For instance, Bitcoin’s mining procedure is notoriously energy-intensive. 

On the other hand, Proof-of-Stake (PoS) is making its way into newer currencies like Ethereum 2.0, significantly lowering energy usage. Compared to Bitcoin’s 17.05 GW daily consumption, Ethereum only consumes 656 kW, rounding to about 5.75 GW per year, which is infinitely lower than Bitcoin.

But, as the concerns remain, some people may wonder if traditional banking is a more sustainable approach, at least for the time being.

A Return to Traditional Banking?

Using energy for Bitcoin mining is a fact, but comparing it to regular banking systems is not a fair comparison. It is easy to see how much energy cryptocurrency uses, but it is also easy to forget how much energy standard facilities like data centers and ATMs consume.

Also, the inherent decentralization of crypto financial systems means that we won’t need as much physical infrastructure or middlemen. 

In fact, Joseph Raczynski, Thomson Reuters’ resident Technologist & Futurist, stated that by simply replacing traditional facilities with blockchain solutions, we can save a lot in electricity, oil, and gas, thereby “negating the environmental impacts” of these institutions.

But, still, we’re a long way from seeing this vision turn into reality. To get there, the crypto industry needs to come up with green mining solutions.

Moving Towards Renewable Energy

Green energy is slowly but surely making its way into the cryptocurrency mining sector, with countries like Canada and Norway, which are abundant in geothermal, hydroelectric, and wind power, becoming well-known hubs.  These countries can become the starting point to show the feasibility of a low-carbon mining future.

2024 has been promising so far. Daniel Batten, co-founder of CH4 Capital, recently stated on the Bitcoin ESG Forecast, Issue #003, that green energy sources are used in about 54% of BTC mining. 

If calculations are correct, this marks a significant shift toward a more sustainable future, especially given that the 2020 – 2021 UN Report was quite bleak, indicating that coal and natural gas provided 66% of the mining energy combined. 

Overall, there is more depth to these numbers than what you see online. According to a study by the Lawrence Berkeley National Laboratory, a lot of the common assumptions and figures about the energy usage and ecological footprint of crypto mining are inaccurate. 

Since power is the main cost of running a mining center, they don’t consider the fact that the entire industry is moving toward efficient hardware that’ll inevitably reduce the environmental impact of mining.

Are there any Green Mining Solutions? 

Moving to greener sources like solar and wind is crucial for lowering the industry’s overall ecological footprint. More and more mining companies are finding ways to minimize their harmful ramifications in the environment by relocating to areas rich in renewable energy. It’s better for the environment and their pockets.

The shift is happening faster because mining equipment technology is getting better. For instance, the development of more efficient ASIC miners has led to a significant reduction in power usage. Updated versions provide better performance with less power consumption, which is in line with the industry’s goal of sustainability.

Mining Containers

Another creative tactic that helps achieve this goal is the use of mining containers. Built specifically for crypto mining, these mobile, modular servers provide unique advantages. It makes it easy to operate in regions with plenty of renewable energy sources or with drier conditions, which could decrease energy demands, especially for cooling.  

PoW to PoS

In line with these technical breakthroughs, a big change is happening in the way cryptocurrencies work. People are moving away from the inefficient PoW approach and toward the more modern PoS model, which uses far less energy (like Ethereum 2.0). This shift also reduces the energy requirements of mining operations by drastically lowering the computing effort needed for validation and network safety. 

The Outlook

There will be a brighter future for digital currencies if the industry continues to produce more eco-friendly cryptocurrencies.

And as people become more conscious of environmental issues, the Bitcoin community is starting to put a premium on sustainability. To reduce their impact on the environment, some projects are looking at renewable energy sources and carbon offset solutions. The industry is moving in the direction of a more sustainable and ecologically aware future by tackling these concerns head-on. 

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Viktoriia is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.

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Viktoriia Palchik
Viktoriia Palchik

Viktoriia is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.

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