Bitcoin and other cryptocurrencies are changing the business world and making a heavy impact on the environment. Unfortunately, many investors may not even realize this fact and how it drives the value of Bitcoin. As a result, it is crucial to understand these factors and whether Bitcoin can go green and help the environment thrive.
Why Bitcoin is So Environmentally Damaging
In recent months, the price of Bitcoin (a unique digital currency created with blockchain, an open-source code used to develop over 6,000 cryptocurrencies) has plummeted to half of its peak value of over $64,000. So what is driving this change? Crackdowns from two strange sources: China and Elon Musk.
Musk stopped accepting Bitcoin as part of his Tesla business, while China has severely restricted its use in its borders. Why? Creating and mining these currencies takes up a large amount of energy, particularly since computers running constantly create these coins.
Without going into the science behind it – which is quite confusing – it is enough to say that Bitcoin mining devices (which keep this currency afloat) are sucking up a lot of energy simply to keep this field alive. Some estimates find it uses as much electricity every day as countries like the Netherlands.
A big part of this problem is that mining is often a complex situation that requires a lot of trial and error and guessing. Unfortunately, this often causes many miners to use far more energy than necessary to mine their coins and raise the world’s environmental impact.
That said, the potential for Bitcoins is so huge that many are just shrugging off the impact on the environment. However, as more countries and organizations start restricting their use, there will be no choice but to go greener. Is it possible? Thankfully, steps can be made to minimize this issue.
How to Make Bitcoin Greener
Many steps to make Bitcoin better for the environment are already in place. However, they may take time to maximize this energy decrease properly. In the meantime, there are other steps that miners could take to help decrease their carbon footprint.
For instance, miners could switch to lithium-ion batteries to power their computers. These batteries are twice as dense in energy compared to options like VRLA batteries. As a result, a mass switch to these could cut back on the power needed to run these mining laptops.
However, such fixes are temporary and don’t quite attack the problem on a significant enough level. Some are proposing using renewable energy, such as solar power or windmills, to power blockchain mining. This step would drastically cut back on fossil fuel production for electrical creation.
The problem here is that many miners either claim to use renewable sources – estimates are as high as 73% – and may only use a small amount or simply lie. Others may not want to change what works for them. As a result, greed and a fear of change could keep many miners operating dangerously for years.
Thankfully, steps like a carbon tax incentive may help. This option would place a tax on miners who were not efficient and reward those who were efficient. Rewarding those who willingly make this change is innovative because it gives them a real reason to change beyond altruistic fears.
With such changes, miners could upgrade to wireless access points instead of extenders. These points can handle 60 connections at once instead of the 20 that extenders offer users. In this way, their operation can be more efficient and minimize the amount of energy spent on various processes.
Unfortunately, some experts believe that these changes are short-term solutions. Instead, they demand long-term changes in how Bitcoin is organized, mined, and created. Until then, it is possible that this mining will remain environmentally damaging for a long time when there isn’t much time to change.