Cryptocurrencies were designed to eliminate third parties. In order to verify transactions, miners are needed. And the catch is that cryptocurrency mining is an energy-intensive activity. According to studies, the amount of energy used in Bitcoin mining worldwide is enough to power an entire country.
And because of this, there are a lot of regulators that are wary when it comes to letting crypto miners operate in their territory. It is preferred by crypto miners to operate in cold places and in areas with low energy cost. In fact, Quebec may have allowed crypto miners to operate in their territory, but they decided to have a special rate for miners.
A recent report made by experts at the University of Hawaii published a paper that gives us an idea about the drawbacks of Bitcoin mining. It was discovered that Bitcoin mining can raise the global temperature by two degrees Celsius until 2033. According to the study, by taking a closer look at the emission based on the different stages of Bitcoin mining chain, the researchers discovered that it is possible to raise the temperature to a critical level.
For environmentalists, this is something alarming. Raising the temperature by 1.5 degrees Celsius could already lead towards catastrophic climate effects.
Trends in Bitcoin Mining
It is quite common for Bitcoin miners to invest a huge amount of money on powerful computers. Some are even mining even if they are losing money. These powerful computers are needed in order to solve powerful algorithms. Unfortunately, this could generate a lot of heat and could use a good amount of energy.
The problem with Bitcoin mining today is that a lot of miners are now competing against each other. And therefore, they spend so much money on powerful computers that use a lot of energy. According to Dutch economist Alex de Vries, “This is another pretty shocking find relating to Bitcoin’s energy consumption”. He added that “We already knew the electricity demand was extreme, but we didn’t yet have a clear picture of the environmental impact of this”.
He is the same person who did a peer-reviewed academic journal saying that the rough equivalent of Bitcoin’s energy consumption is the same as Austria.
It was also discovered in 2017 that a whopping 69 million metric tons of CO2 were emitted into the atmosphere from Bitcoin mining. Consider the fact that Bitcoin also just accounted for 0.03 percent of all cashless transactions during that time.
At present, housing, transportation, and food are seen as main contributors of worsening climate change. However, given the study, do we now have an additional threat to our existence on the planet?
Should There Be a Regulation on Crypto Mining?
Should there be a regulation that pertains to the crypto mining industry? Could there be a way that regulators could step in to avoid this catastrophe from happening? Consider Bitcoin and cryptocurrencies to be in its early stages still. Adoption is still a far way to go but it has already been seen as a major threat to the environment.
These days, a lot of Bitcoin miners are found in China. Could China step in and do something to help the environment by acting on large-scale mining operations happening in the country?