Why Cryptocurrency is Bad for the Environment?
Humans have been trading and using virtual currency for more than 5,000 years, and as a result, we have built up an understanding of how virtual currencies work. However, we haven’t yet found a universal way to track virtual currency transactions, so we currently lack a way to know how many transactions there are and where they occur. As a result, there is no mechanism that can account for how virtual currency is being used, which makes it difficult to estimate how much of an impact virtual currency is having on society. This lack of information is particularly problematic when it comes to the environment.
Cryptocurrency, also known as crypto, is a digital form of money that is more volatile than traditional forms of currency. Cryptocurrency is created by using big data and cryptography, as well as complex algorithms. A user creates a specific address or “wallet” to receive and collect cryptocurrency.
Cryptocurrency, or digital currency, is all the rage these days. While it’s been popular for several years, cryptocurrency really caught the attention of the general public when it was embraced by fraudsters, drug dealers, and pornographers. (Know Your Meme also points out, “Cryptocurrency has also become synonymous with Ponzi schemes.”) But cryptocurrency has also picked up some positive press recently, and more and more people are jumping on the bandwagon.
Cryptocurrency is all the rage right now, with billions of dollars being poured into the Bitcoin marketplace. But lately, cryptocurrency has gotten a bad rap, with concerns being raised about the environmental impact of cryptocurrency mining and the growing carbon footprint associated with cryptocurrencies. Cryptocurrency mining requires massive amounts of computing power, and as the number of Bitcoin transactions increases, the computing power required to verify and confirm transactions grows as well. And this computing power usually requires electricity to run, which further increases the carbon footprint associated with cryptocurrency mining.
Cryptocurrency mining—the process of verifying transactions and generating new coins—is a huge contributor to global warming. Cryptocurrency mining uses data centers, which is how they get its name, and this produces more greenhouse gases than most forms of energy. A recent study by the University of Hawaii showed that if every home in the U.S. mined Bitcoin, it would use as much energy as 4 million homes!
If you want to invest in cryptocurrency, you’ve got a decision to make. Will you invest your money into an existing cryptocurrency, or will you buy a “new” cryptocurrency with real money? In the cryptocurrency world, “new” refers to coins issued from new ICOs that are backed by something (usually a real-world asset). But cryptocurrency is a big player in the Bitcoin investment community, and Bitcoin and other altcoins are notorious for being environmentally unfriendly.
We all know that cryptocurrencies can be volatile. And according to some, that volatility could be bad for the environment. For example, if too much electricity is used to mine new coins, then the next system upgrade could require even more power.
When Bitcoin started to gain popularity, its supporters touted it as a way to reinstate people’s control over their finances after the global financial crisis. Bitcoin was intended as a decentralized currency, meaning that it is not controlled by a single government or corporation but by everyone using Bitcoin.
In an effort to curb global warming, many countries are implementing plans to wean themselves off or, at the very least, drastically reduce their consumption of fossil fuels. One of those countries is China, whose leaders are planning to invest $2 trillion in renewable energy projects by 2030. But although the push to develop cleaner energy sources is admirable, cryptocurrency mining isn’t helping the environment at all.