Negative Impacts of Cryptocurrencies
As the future of America, it is imperative we know what affects our new technology has on our world. What many people fail to see behind the genius cryptocurrency technology, is how detrimental its effects are to our environment. In this post, learn about ways to be more conscientious of how cryptocurrency affects our environment and what we can do to minimize these effects, while still utilizing the technology.
So first, what is cryptocurrency?
Cryptocurrency is a term used for various digital currencies which rely on a decentralized system. A decentralized system is where transactions are controlled by a distributed network, not a single person or group. In other words, there is no middle man regulating the transaction. An example of a middle man is a bank or the internet, which is recently becoming more and more of a centralized system. The decentralized system is the root cause of the negative impacts cryptocurrency has on our environment.
How does this affect our environment?
I’m going to first start with some statistics:
Bitcoin generates 11.5 kilotons of e-waste every year (this is not even including other cryptocurrencies)
Bitcoin now consumes more energy than some countries
Bitcoin mining alone uses almost as much electricity as all of the worlds data centers
Since a decentralized system means completely reliant on technology, with no middle man authorizing and regulating the transactions, it uses up an immense amount of energy. Take bitcoin for example, a process known as bitcoin mining has been the root cause for the steep incline in the amount of energy bitcoin specifically uses. Remember how we said that cryptocurrency is completely decentralized, meaning that computers authorize transactions. Well these transactions are done through bitcoin mining.
Specific computers authorize the transaction by solving highly complex mathematical problems in exchange for bitcoins. The highly complex math problems they are solving are done to add a block to blockchains, which we go more in depth in our post about blockchain. For every block they add to a blockchain, miners get a certain amount of bitcoin in return, which is dependent on the price of bitcoin.
Now this is detrimental to our environment because the computation and transaction these computers complete, require an immense amount of electricity and therefore, energy. This energy leaves a carbon footprint in our environment by releasing greenhouse gases. Electricity generates the second highest amount of carbon emissions, which ultimately leads to furthering the effects of global warming.
What can we do to help regulate these detrimental effects?
Luckily there are some ways we can help regulate the effects of cryptocurrency.
The best and cleanest way is to use renewable energy. Using renewable energy will decrease the amount of greenhouse gases we are emitting and will help reduce our carbon footprint. Ultimately it is the safer and cleaner option if cryptocurrencies are going to be used in the same capacity as today, going forward.
