CoinGape team dig a little deep and tried to understand the severity of the environmental threats due to bitcoin mining. With the rise in bitcoin’s popularity, the concerns regarding bitcoin destroying the environment and contributing to the global warming, are increasing as well. But is it really so or is it just a FUD?
Is bitcoin mining really destroying the environment?
Bitcoin has skyrocketed in value, mining operations, and popularity, all over the globe. And despite being called a bubble by the wall street, it is continuing to grow. However, apart from being called a bubble and used in illegal activities, cryptocurrency has also generated concern for being an environmental hazard.
Bitcoin is virtual in nature but its mining requires a massive amount of power and energy to create new bitcoins.
According to an investor in St. Louis, Marc Bevand, bitcoin uses about four to five terawatt hours that is less than the electricity consumed by the Christmas lights in the US annually. Moreover, he believes the benefits of bitcoin that is helping in escaping inflation and making payments more efficient, outweigh its toll on the environment.
It has also been reported that bitcoin mining consumes about 982 megawatt hours a day, that can power about 31,000 homes of US. Hence, the mining is consuming 0.025% of the household supply of the US. However, the bitcoin mining power consumption is global that is set against only the electricity consumption of US.
In comparison Fiat is far more detrimental!
Bitcoin mining’s impact on the environment has been widely touted, no doubt, but according to a Bloomberg report, fiat currencies among other industries cause more damage.
Cash production, gold mining and data centres consume more energy than the bitcoin mining. As per the report, the annual power consumption by bitcoin mining is around 8.27 terawatt-hours per year. This is no doubt more than the small nations’ power consumption such as Iceland.
However, in comparison to the US data centres, it’s only one-eighth of what these data centers consume. Most importantly, the global production of fiat currencies is clearly way more with 11 terawatt-hours per year.
Talking about gold mining, it burns a staggering 132 terawatt-hours per year. And these numbers are not at all inclusive of the huge amount of power spent on security systems, banks, and vaults to keep the cash and metal safe.
Will Bitcoin mining melt the globe?
From swiping your ATM card at Starbucks for your coffee to commercial jets, everything contributes to the global warming.
The argument goes that mining bitcoin by making use of coal increases the amount of CO2 in the air that means more warming.
However, bitcoin mining doesn’t need to have a massive carbon footprint as coal-based electricity is used mainly in China. Now, the miners are looking for electricity in faraway locations that have hydroelectric power plants such as Canada’s Hydro-Quebec.
It’s all a FUD, more or less!
There have been a lot of debate over the impact of bitcoin mining on the environment. But these are not actual facts, rather fear, uncertainty and doubt surrounding the bitcoin term, as a whole.
Having a fixed upper limit that can be mined, bitcoin mining will stop at some point. This means energy consumption won’t go on rising forever.
The energy consumption would be there from bitcoin usage but it will just like any other payment mode.
As a fact, bitcoin consumes less energy than its non-virtual counterparts and considering that bitcoin will stop at some point in future, bitcoin is not an environmental disaster!
What are your views on the environmental impact of bitcoin mining? Let us know below!
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
I am an associate content producer for the news section of Coingape. I have previously worked as a freelancer for numerous sites and have covered a dynamic range of topics from sports, finance to economics and politics.