Cryptocurrency and energy consumption
25-03-2021
Despite increasing mainstream adoption of Bitcoin and other cryptocurrencies, there are major concerns about their carbon footprint. And even though it is debatable how concerned we need to be, the fact remains that cryptocurrencies use a ton of electricity without any improvement in the future.
The problem is visible because it seems easy to measure how much energy is needed to keep a digital coin up and running. In comparison with fiat money, it is difficult to argue how much energy is needed to distribute hard cash to the public.
However, it remains unclear how much a cryptocurrency such as Bitcoin actually contributes to the world’s carbon footprint. And of course, every digital application (such as sending email, using social media, paying with your debit card, …) also contributes to our global carbon emissions. So the question stands on how big this problem really is in this ever-growing digital world.
Furthermore, I don’t want to argue on the real data. As to some critics, Bitcoin seems inefficient, but to others, the ecosystem is using less than 10% of the energy traditional banking systems require. It’s up to the crypto community to solve the problem from within. Using less energy by building better systems, and relying on renewable energy to keep the blockchain technology running.
So why is cryptocurrency still taking over the world? Do we not care about the side effects of this new blockchain technology? Of course we do. But just as there is much debate on any new tech that is relying more on electricity, it is difficult to argue whether it would mean to dismiss the technology completely. Blockchain is playing a role in the transition to a clean, modern, and decentralized energy system. And Bitcoin is just one adaption of the concept. We need to keep working on improving these systems. And I wonder if the solution shouldn’t be found in energy generation, rather than using this argument as another reason to take down Bitcoin. The solution usually is a compromise. And we need to focus on balancing the demand and supply of energy.
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