Cryptocurrency has become popular in the recent years with its unpredictable price swings being advertised as a feature rather than a massive drawback. One of the most popular cryptocurrencies, Bitcoin, traded at between the amounts of $5,000 to $40,000 past year.
However, experts believe the monumental amounts of energy used to mine and maintain Bitcoin and other cryptocurrencies in general, needs to get more attention.
In an article for international news outlet Bloomberg, columnist Lionel Laurent writes that the Bitcoin algorithm requires large amounts of computer power to handle transactions. According to a study, the annual estimated carbon footprint for Bitcoin will be nearly equivalent to New Zealand’s; close to 37 million tons of carbon dioxide.
Laurent writes that Bitcoin consumes an annual 77.8 terawatt-hours of energy, according to energy watchdog Digiconomist. He adds that another index by Cambridge Center for Alternative Finance, presents a figure of 108.4 terawatt-hours as the amount of energy consumed in one year by Bitcoin.
The writer says that many come to the defense of the cryptocurrency, saying that mining Bitcoin is “good” overall as it utilizes energy that would have been otherwise wasted. Laurent adds, that defenders of Bitcoin say that mining will force renewables to be utilized more in the future.
He says that if this practice was taking place in countries with high carbon tax, such as Sweden, which has 100 euros per metric ton of carbon tax, there would be some regulation in place. However, most of the cryptocurrency’s mining is done from southwest China which relies on cheap but less environmentally friendly energy sources, such as coal.
According to the Cambridge Center for Alternative Finance, 38 percent of the power used in mining Bitcoin comes from coal powered plants. Some researchers have presented that direct taxation of mining may be an alternative to mining, but it may also cause these activities to cease or lose popularity.
The original article mentioned in this piece appeared here
