As new investors continue to join the cryptocurrency community, the concern regarding environmental issues grows. A report published by a team of ESG experts claims that cryptocurrency mining consumes more energy and it strains the environment badly.
However, a news outlet CoinDesk does not fully agree with the report published by the ESG experts. The news outlet does admit that cryptocurrency is energy-intensive because miners use specialized hardware equipment to mine a token. The mining equipment generates consensus protocols that are hard to achieve because it is extremely expensive. Due to these protocols, the Bitcoin network is safe from an attack otherwise any hacker would have easily entered into the protocol very easily, someday.
In recent times, Bitcoin Mining has become a worldwide issue, there are some companies who support it, while others do not.
Elon Musk’s Tesla is one of them. Notably, Musk has expressed his concern regarding the cryptocurrency mining process not on cryptocurrency. He stopped accepting Bitcoin payments for Tesla Cars because of the growing environmental issues. But many people thought that Musk is no longer supporting Bitcoin, therefore, soon after his tweet, the market slumped down, drastically.
Some of his Twitter followers also questioned him, whether Tesla would sell all its Bitcoin it purchased in February, the CEO of the company clarified that the company is keeping the tokens.
But it was too late for him, to explain things to the audience. The ship already sailed, the market already started going down. Following his tweet, a next announcement came from China which restricted the banks from getting involved in crypto-related activities.
This was not the first time China showed it is not a big fan of cryptocurrency. A few months ago, it banned the mining industry in the Inner Mongolia region, due to environmental concerns.
Inner Mongolia consumes 7.71 percent of the world’s hashrate to mint a Bitcoin, compared to the United States, the region consumes more electricity. Therefore, to put control on this energy consumption China shut down the mining industry in the region.
Over time, the crypto mining process has become harder. The harder it gets to mine a coin, the more electricity the process consumes.
“Any laptop or computer is theoretically capable of participating in cryptocurrency mining, and any location that has access to internet and electricity might be used to host these devices.”
Go-Green For Bitcoin Mining
In order to compensate for the energy demand, the companies have decided to go green for mining bitcoin. A company in Norway, worth $6 billion, is establishing mining facilities using wind, solar and hydroelectricity.
“Bitcoin is, in our eyes, a load-balancing economic battery, and batteries are essential to the energy transition required to reach the targets of the Paris Agreement,” says the company.
Similarly, Blockstream, a company operating mining facilities since 2016, uses mixed energy sources for initiating mining activity.
As the cryptocurrency market is growing, it appears that going green for mining would be a better option for everyone around the world.
In 2019, up to 73 percent of crypto miners around the world started using at least some renewable energy for the mining process. It’s a good sign for the environment that miners are finding new ways for compensating for the energy demand.
The total supply of Bitcoin is 21 million in the market, which would get completed by 2140. By then, more individuals and businesses would join the crypto community, which means, the demand for Bitcoin would be more, but supply would not be the same. The miners will require heavy equipment and energy to mine a bitcoin, which would affect the environment.
But if they start using renewable energy, they could not only mine the coin but save a lot of energy. Along with that, the miners could also opt for recycling computers and hardware, as it will reduce the energy consumption during the process.
Big Industry Players Promotes Carbon Neutral Crypto Mining Operations
Slowly the industry is realizing the importance of going green for mining operations.
When Musk took a U-turn and denied accepting bitcoin payment, he faced a lot of criticism from the industry. The market went down because of his tweet and many people suffered a huge loss. However, this was the right time for the individuals to purchase more bitcoin, instead, they become skeptical about it.
Leaving the past incidents and tweets aside, Musk attended a meeting with the executives of a leading Bitcoin mining company. The meeting was hosted by the CEO of MicroStrategy, Michael Saylor. The meeting was organized to find a way to promote energy usage transparency. For that, the members decided to form a Bitcoin Mining Council which could manage and maintain sustainable mining activities worldwide.
As soon as the meeting was over, Musk made an announcement about the Bitcoin Mining Council, which helped the digital asset to grow in the market.
Also, Marathon Digital Holdings, a Bitcoin Mining company, has decided to achieve 70 percent carbon neutrality for mining operations. In order to achieve the target, the mining company would be developing a data center “that will host around 73000 previously purchased Bitcoin miners as a part of new 300-watt operations.”