Mining Bitcoins are causing environmental concerns
Bitcoin has created another record reaching the US 50000 dollars height. But just a couple of years ago, with 10000 bitcoins, you could buy just a couple of pizzas. To be honest, it is weird to think that a single virtual currency can have this much value. You can’t hold or store them (without a hard drive), and it also does not have any underlying assets. The whole concept is based on proof-of-work, and it is a digital representation of the computer power that has been utilised to generate one single bitcoin.
The proof-of-work concept is actually not something new. In the islands of Yap, rai stones were used as a form of currency. To acquire a Rai, one first has to row a canoe for 500km and chisel some limestone. And then comes the hardest part, you have to take a 3m wide rock and go back to Yap without sinking it in the pacific. No one can exactly confirm when the practice has started, but we can say for sure that the practice is at least several centuries old. Rai stones did not possess any inherent values but, everybody respected the proof of work. And similarly to bitcoin mining, the process was incredibly resourceful and inefficient in nature.
Bitcoin employs a global network of competing computers to get the end result. Whoever gets the right equation to unlock the complex mathematical problems at first will get the reward. The pattern changes after every 10 minutes, and the computers continue to get the fastest result.
With more and more people having started establishing a bitcoin mining setup, energy consumption has also increased. Right now, a whole year of bitcoin mining requires more energy than the whole of Argentina itself. It has also been reported that bitcoin mining is generating as much as 37 million tonnes of CO2 every year. Therefore people have started to question the credentials of bitcoin mining.
Bitcoin mining is not carbon neutral
With the growing environmental concern, people have started to realise that bitcoin is no more carbon efficient. In 2011 using a laptop, miners could earn a bitcoin, but right now, people have to create a separate setup, employing thousands of powerful computers. The hardware required to generate a bitcoin successfully is known as Application Specific Integrated Circuits (ASIC). 70% of these mining operations are conducted in China. And the amount of electronic waste is a matter of concern. Every year around 11,500 tonnes of hazardous electronic waste is produced from the mining process.
The government and corporate world is gradually taking strict measures to reduce the environmental damages by employing strict measures against bitcoin miners. There is no currency that can be called a green crypto coin, but there are digital coins that can be less likely to cause overall environmental damage in the long run. There are also alternatives to the proof-of-work, and the second-largest cryptocurrency, ethereum right now, has adapted the proof-of-stake system, which is far less energy-consuming.
