Cryptocurrency market News: There have been many dizzying events in the cryptocurrency market over the past few years. One of the biggest innovations is that the production of cryptocurrencies seems to be causing huge climate problems. New technological developments have emerged that claim to offer new solutions to these problems by being more sustainable and innovative than old ideas. Elon Musk and automobile brand Tesla, who aim to find new approaches and lead the future with visionary ideas, can be an example. Electric cars and more efficient batteries are seen as a big step towards a more efficient lifestyle.
Another very innovative development is the emergence of cryptocurrencies such as Bitcoin, which offers a completely new concept of money system. Many branches of the market, which is seen as decentralized, fast, digital and innovative, have already turned to these new currencies. Tesla was one of the first to accept cryptocurrencies as a payment method, other branches such as the gaming industry quickly followed suit.
Now the whole game has changed with Tesla suddenly withdrawing from the Bitcoin business while questioning the sustainability of the entire currency concept. After Elon Musk’s sudden and aggressive change of mind, the question arises whether cryptos are really that innovative or just a step in the wrong direction. We have summarized the realities and opportunities that cryptos have in the future.
High power consumption: Are cryptocurrencies a climate killer?
To understand why and how something digital like Mining and Power cryptos can affect the climate, it is necessary to understand how digital currencies are created. Cryptocurrencies are the result of sophisticated computer engineering, and many fail to see the actual technology behind the whole.
Coins are created through a process called “mining”. To mine, computers connect to the cryptocurrency network to verify transactions. This complex process involves solving puzzles that provide security to ensure that no one fraudulently edits the global record of all transactions. Computers use a lot of electricity to deal with this enormous amount of data. And here the problem starts. This high electricity consumption would not be a problem if all the energy was produced by sustainable energy sources such as wind or solar panels.
However, because the market is still a highly competitive place, miners often choose the locations with the lowest energy prices to operate. While private users only use their personal computers to mine, large companies have emerged by focusing solely on Bitcoin mining by building huge warehouses full of computers.
In the past, many of these large mining firms chose China as the location for their mining facilities. Unfortunately, most of the energy consumed by these power plants comes from coal, which has a very negative impact on the environment and is seen as one of the most important problems of climate change. The energy demand of mining facilities is so incredibly high that the computing required to support Bitcoin’s infrastructure network now requires almost as much energy as the entire country of Argentina: energy equivalent to 13,000,000,000,000 Watts per year.
What’s the solution?
The claim is serious and reasonable. Crypto mining and transaction processing requires a large amount of energy, which results in large carbon footprints. In fact, superfast transactions via cryptocurrencies are much less sustainable than ordinary transactions. An average Bitcoin transaction has a carbon footprint of about 360 kilograms per transaction.
Looking at the environmental impact of other payment methods, Visa, for example, has an average carbon footprint of around 500 milligrams per transaction. This means that the carbon footprint of a Bitcoin transaction is actually 800,000 times larger than the carbon footprint of a normal transaction.
In addition, the consumption of these plants directly affects the habitats of people living nearby. Demand for electricity grids has a huge impact on local communities. In some countries where crypto mining facilities are increasing, their demand for the grid has eventually led to major power outages in major cities. China, one of the most popular locations for mining facilities, has recently started to put pressure on mining companies for this reason.
What should be done? Even if you are a big crypto fan, you have to accept the fact that the concept of Bitcoin is not as sustainable as it seems so far. However, this does not mean the end of cryptocurrencies. Now that Tesla has pulled the issue and focused, it is likely to see Bitcoin and other cryptos quickly find solutions and find new sustainable energy sources. In fact, Elon Musk has said that he will hold his Bitcoins until a more sustainable way of creating coins without affecting the environment is found. This means that Elon Musk actually believes that new paths will be found quickly. Allow the market to regulate itself and meetWe can count on him to find quick solutions to the challenges we face.