Have you ever used cryptocurrency before for transactions? While most of us are at least familiar with ones like Bitcoin, did you ever think whether this particular way of exchanging payments is Eco-friendly?
When Bitcoins and cryptocurrency were introduced to the trading and currency exchange world, it was revolutionary. Traders found it both efficient and profitable. Online sites could accept payments in seconds, instead of having to wait for days. Online gaming sites wouldn’t have to worry about frauds. Cryptocurrencies like Bitcoin, for one, are nearly impossible to fudge with – and pretty safe to use overall.
The good sides and the bad sides
Now, while different cryptocurrencies serve different purposes, the rationale remains the same – it helps transact anonymously, and quickly. The transactions are done in real time, and without any government intervention.
Crypto can be used for everything from currency exchange, purchasing products, online gaming and many more.
You can send cross border payments in just a few seconds, something that wasn’t possible not too many years ago. Plus, new cryptocurrencies like Tron and Ripple are also changing how we look at the crypto world itself. Ripple, for instance has already partnered with the likes of American Express to make money payments faster.
Not everything about it is great. It has been suggested that trading cryptocurrency might be addictive, that it might be used by shady and illegal businesses, and lately there has been a real concern about the enormous amounts of energy that cryptocurrency processes require – specifically in the process called crypto mining.
Cryptocurrency mining and energy
Did you know that you can scourge for your own cryptocurrency, by a process called mining? That’s what crypto-miners do. In short, cryptocurrency mining is the process of verification of cryptocurrency transactions where crypto-miners compete to solve complex mathematical problems that are part of the authentication process of each transaction. This is done using powerful computers with hardware that was usually designed for these purposes. When a miner solves the problem, the transaction is added to the blockchain (explained here), and for that the miner is rewarded with a small amount of cryptocurrency.
Here is the thing – cryptocurrency mining can suck up a massive amount of energy. Scientists and energy experts have also noticed that bitcoins’ consumption of energy is growing at a frightening rate each month.
Just to put this in perspective, according to a study published by the University of Cambridge, just the global Bitcoin network (omitting other cryptocurrencies) consumes more energy than some countries. For example, it exceeds the yearly energy consumption of countries like Venezuela and Chile and consumes about as much energy as the Philippines – a country with a population of 105 million! This data is alarming.
Here you can find out how bitcoin is really affecting the energy and the world economy in a drastic way.
So, are the current popular cryptocurrencies “green”? Not really. We need to look at creating newer and less energy-consuming hardware or using alternative forms of cryptocurrency other than Bitcoins.
Guest Author Bio
A huge fan of Real Madrid FC, Daniel is mainly interested in writing about European soccer, green technologies, environmentalism and environmental science. Daniel is currently working on his bachelors degree in Civil Engineering.