Cryptocurrencies they have gained tremendous popularity in the last five years.
Follow the news about revolutionizing financial systems, meme coins and billionaires Bitcoin however, we can discover the uncomfortable truth - mining uses cryptocurrencies a lot energy.
Does this mean that while most of us are fighting for a greener world, crypto transactions threaten it?
In the context of other energy uses, mining of cryptocurrencies does not perform very well.
A report from 2021 showed that Bitcoin mining alone consumed more energy than Argentina as a whole, and if the cryptocurrency were a country, it would be in 29th place in terms of energy consumption.
Team MoneyTransfers.com he compared a single Bitcoin transaction to devices that most of us use almost every day, which further shows how high its consumption is.
The energy used in one Bitcoin transaction can power an average person's laptop for 8 hours a day for ... (yes, you did not expect it) , or be used to perform 1,2 million Visa card transactions.
Such a high energy consumption is unfortunately an indispensable part of the cryptocurrency exchange.
Making transactions via blockchain it requires multiple computers to perform the complex tasks that are needed to verify asset movements.
The cryptocurrency mining scenery is often associated with huge warehouses full of computers that work almost continuously, while crypto miners are motivated by cryptocurrency rewards.
And as David Gerard said to the BBC, author of Attack of the 50 Foot Blockchain, this likely won't change - “Bitcoin is literally inefficient. More efficient cryptocurrency mining software will not help - it will just compete with other powerful software. ”
Soluna Computing is a company that connects power plants with customers who want to buy excess energy they produce. As John Belizaire, the company's CEO, said, while crypto's high energy consumption cannot be denied, it can also be viewed from a different perspective.
"The energy consumption of the system is in fact a feature of the system, not a bug," argued Belizaire in his recent lecture, pointing to the fact that the energy used to mine cryptocurrencies serves to secure the records of transactions in the network, protecting them from external interference, without being subjected to any central institution such as a bank or government.
"We know that other technologies that we rely on every day, such as data centers, use skyrocketing amounts of energy and even subsidize fossil fuels," said MoneyTransfers.com to Belizaire.
Belizaire believes that the value of energy use is relative to what we perceive as important - and that cryptocurrency can provide "a source of freedom for hundreds of millions of people who cannot trust or rely on financial systems."
It's also worth noting that cryptocurrency mining uses electricity, which theoretically could be generated from renewable sources - although it's very difficult to know how much of the cryptocurrency mining energy is currently produced in this way.
Belizaire says cryptocurrency energy needs are "the perfect elastic load for power plants."
“At Soluna Computing, we buy untapped renewable energy from power plant owners to cleanly power energy-intensive data processing such as cryptocurrency mining. This eats away the need for waste energy, brings profits and economies of scale to power plant owners, and provides a better performance-to-power ratio (Green Computing) in the cryptocurrency ecosystem, ”he said.
"And it acts as an economic incentive for other crypto miners to innovate and increase their own energy efficiency."
David Khalif, Co-Founder and COO of Viridi Funds, an ethics investment advisory firm, says the sources of crypto energy are changing.
“The environmental impact of cryptocurrency mining is in much better shape than at the beginning of the year. After banning cryptocurrency mining in China majority Hash Rate on the web (the overall measure of the computing power of the Bitcoin network) had to move elsewhere, ”said Khalif MoneyTransfers.com.
"Some of this mining energy went to countries with a surplus of traditional electricity capacity, such as Kazakhstan. Another part has moved to North America, where we believe it is more likely that green energy will be used to power this high consumption.
“To avoid over-emissions and overburden the traditional grid, most public mining companies choose to source their activities around green energy. Some operators who are unable to use zero emission sources are still making coordinated efforts to minimize their impact with carbon credits. "
A renewable future?
Khalif and many others also believe that cryptocurrency mining will move in a more sustainable direction in the future.
"In addition to social pressure, we can see many mining operators voluntarily striving for sustainable development, ”he said.
“Crypto miners want a future in which they can freely continue their activities, so they are already taking steps towards more sustainable mining. In some cases, renewable energy projects that would otherwise not be feasible have moved forward thanks to crypto miners' subsidies.
"The future of cryptocurrency mining looks greener as many operators realize the benefits of having solid, consistent and renewable sources to power their operations."