It’s hard, if not impossible, to predict the future of Bitcoin, especially given the fast pace of development, but it will inevitably evolve, so an ever-increasing number of people will end up using it. With a price chart, it’s possible to reach decisions to minimize the possibility of loss. Available stats say roughly 1 million Bitcoin miners receive 6.25 Bitcoins for their activity for successfully validating new blocks. Sad to say, headlines in the press are of Bitcoin’s high energy consumption levels, putting the industry under the spotlight. It’s never been more critical for it to undergo a green transition.
Let’s Take a Quick Look at Bitcoin’s Impact on The Environment
Even if Bitcoin is primarily regarded as digital gold, not everyone agrees. Some suggest that it should be compared to crude oil or natural gas, which are considered to be energy-intensive (i.e., using a large amount of energy). Its production entails the use of fossil fuel-generated energy, so it has a carbon footprint. New crypto tokens are mined by solving complex math equations, a feature commonly referred to as Proof of Work. It ensures the decentralization required for the blockchain. The graphic cards on mining rigs work around the clock, so they take up more power than browsing the Internet. For instance, a rig with 3 GPUs can consume 1000 watts of power. This energy consumption deteriorates environmental quality.
No cryptocurrency that has been launched in the past years has used Proof of Work, as it’s obsolete technology. Being the most well-known digital asset, Bitcoin faces intense scrutiny regarding the long-term sustainability of its mining operations. Newer consensus models, such as Proof of Stake, promise better efficiency and effectiveness, challenging Proof of Work’s dominance as the choice for decentralized consensus. Moving to Proof of Stake would most likely impact the BTC price. Many are of the opinion that Proof of Stake eliminates democracy by putting power in the hands of the richest in the room, but it’s a great exaggeration.
In 2021, A Group of Crypto Companies Signed the Crypto Climate Accord
Inspired by the Paris Climate Agreement, the Crypto Climate Accord seeks to accelerate the development of green digital solutions and set a new standard for the industry– in other words, to decarbonize cryptocurrency in record time. Emissions still going into the atmosphere will be balanced with technology that also removes greenhouse gasses. Achieving net-zero operations is possible by switching to renewable energy sources. It’s worth noting that the accord has already gained support from major industry players. The Crypto Climate Accord promotes transparency and accountability, assuring stakeholders the industry is trustworthy and reliable. Stakeholders include cryptocurrency end users, investors, developers, market enablers, researchers, and financial regulatory bodies.
Bitcoin Could Function as Another Kind Of “Battery”
The race is on to use energy in the most effective way possible. Waste occurs when energy is produced but not used or used inefficiently, contributing to energy exhaustion. The more the energy sector expands to accommodate demand, the more significant the environmental impact. Bitcoin could function as a battery, storing and releasing energy on demand daily. Mining companies don’t need to hold onto BTC because the market is liquid, meaning they can achieve revenue goals by selling the coins right away. Mining can be useful for renewable energy (wind, hydro, or nuclear) grids by offering a means to use energy in places with higher production than demand. Bitcoin mining is easier on the grid as compared to other types of production.
Many Bitcoin Miners Are Now Using Clean Energy Like Solar, Wind, and Hydropower
As highlighted earlier, Bitcoin mining using Proof of Work calculations is very energy-intensive. Fossil fuels are the predominant energy source in countries where tokens are mined, but the good news is that miners leverage renewable energy sources, which is a sign of progress. It’s a step in the right direction, even if it will be long until Bitcoin mining is 100% renewable and carbon neutral. At any rate, more and more miners power their operations, such as solar, wind, and hydropower, enhancing profitability while helping combat climate change. This is especially true in countries with clean energy sources like Canada and Island.
At present, renewables are an affordable power source, so it doesn’t come as a surprise that mining companies have started using them to power their operations. It’s commonly believed that replacing the energy system costs a lot of money, but reality shows otherwise. For instance, gas stations are replaced every 25 years, so by 2050, we’ll have replaced each gas station with an electric vehicle charging station. Getting fossil fuels out of the equation is the most significant impact we can have on the planet, so we all need to fight for this. Climate change is the greatest challenge the world has ever faced, but the issue is solvable.
Bitcoin Can Lead the Change Towards a Greener, Cleaner Future for Blockchain
At the end of the day, those who choose to run businesses that rely on fossil fuels will have higher costs than people who have businesses that don’t use fossil fuels. Entrepreneurs should change their business models to accommodate a new way of environmental thinking. It’s encouraging to know that major companies are trying. For instance, a Canadian Bitcoin mining company collaborates with a local energy company to supply heat to the city; the boilers recover almost all the energy used in the mining operations as heat. In Sweden, miners are leveraging excess hydropower or wind power that would have otherwise gone to waste.
Bitcoin can lead the change towards a sustainable future for blockchain, yet key industry stakeholders must join forces to draw in growth and development. Most importantly, the cryptocurrency industry must be transparent in educating consumers, businesses, and so on about its energy usage and the benefits of making the switch to less energy-intensive mechanisms. By building more relatable propositions, it can build trust and lay the foundation for progress, attracting diverse financing sources to help turn the tide. Money is one of the main catalysts and drivers of climate change impacts.
A greener Bitcoin is possible, but achieving this goal requires a diverse range of solutions.