Cryptocurrency in today’s society
Who doesn’t love Cryptocurrency (Crypto)? Monitored and organized by a peer-to-peer network blockchain, Crypto is an encrypted data string that represents a unit of currency that is decentralized. To date, Crypto is one of the most popular but head-scratching investment choices in the world.
Is Cryptocurrency an energy hog?
Research claims that bitcoin miners are consuming 120 Terawatts-hours of energy (TWh), that is 0.6% of global electricity consumption, equivalent to the carbon emission of a small developing nation like Jordan and Kuwait. DigiEconomist founder Alex de Vries mentioned that he has “never seen anything as inefficient as bitcoin.”
But is this information true?
In a separate research led by ARK Investment Management, it indicates Bitcoin ecosystem consumes less than 10% of the energy compared to traditional banking system. However, it is important to note that traditional banking system serves a lot more industries. Similar to all maturing infrastructure, energy usage is always more intensive during the build up stage.
Making crypto green
More green initiatives are constantly emerging to improve the industry’s environmental credentials.
Many crypto mining businesses are now relying on renewable energy sources. A research by CoinShares indicated 74% of bitcoin miners use renewable energy as part of their power supply for mining, making crypto “clean” to a limited extent.
Though still at a relatively young development stage, crypto has the potential to be the key transition to sustainable energy sources. As researched by Jeremy Hinsdale, crypto mines can pair really well with renewables if miners can be flexible in their energy source. When used correctly crypto can prove itself to be the transformative force when harnessing both finance and green technology. Pushing the transition of energy consumption to renewable energy sources.
An alternative source to push for renewable?
Despite pledging to push for Net Zero emission, a report by 28 non-government organizations indicated that banks have provided more than $1.5 trillion in loans and underwriting into the coal industry from 2019 to 2021. It severely impacts the efforts of creating a net zero environment, as coal is one of the main contributors of greenhouse gases emission.
Crypto however can encourage green innovations. Miners and operators are working with energy representatives to find novel solutions and ideas to use excess natural gases and other resources that normally go to waste. Recently, Bitcoin purchased gas leaks from Exxon, in an effort to utilize resources. In normal cases, gas leaks are burned off as waste. Through the understanding of crypto assets, there is an increase in awareness being placed on policies for energy consumption and renewables.
So what is the actual relationship?
As paradoxical as it might sound, the implausible amount of power used by the crypto industry paved the way for greener and more efficient solutions for the future. Crypto drives the awareness and development of greener solutions for a sustainable future.