BITCOIN’S CARBON FOOTPRINT — CHANGES CRYPTOCURRENCIES CAN BRING TO PREVENT CLIMATE CHANGE?
Climate Change is currently the most serious problem our planet is facing, and it’s not limited to melting of glaciers. It has reached our very homes, the air we breathe, the surroundings we live in.
Bitcoin has always been on the wrong side of this debate as the astronomical level of energy usage required to mine Bitcoin and other cryptocurrencies have been a contentious point of discussion for several years. In November, the power consumed by the entire bitcoin network was estimated to be higher than that of the Republic of Ireland, and this statistic was enough to stir a heated debate between environmentalists and bitcoiners. Since then, its demands have only grown.
Based on the estimates of Digicomist, It’s now on pace to use just over 42TWh of electricity in a year, placing it ahead of New Zealand and Hungary and just behind Peru. The more electricity you burn, and the faster your computer, the higher your chance of winning the competition. The prize? 12.5 bitcoin — still worth over $100,000 — plus all the transaction fees paid in the past 10 minutes, which analysts’ estimates is another $2,500 or so. Burning more electricity increases your chances of winning, but correspondingly decreases everyone else’s — and so they have a motivation to burn more electricity in turn. According to a report by local news organization Welt on Sept. 2, the FDP recognizes that it is no longer enough to only focus on putting less carbon dioxide into the atmosphere. It said that, if the world wants to slow down global warming, it will also need to retrieve greenhouse gases that have already been emitted.
Now a new report (https://www.nature.com/articles/s41558-018-0321-8) shows that if Bitcoin is implemented at similar rates as other emerging technologies, it alone could generate enough carbon dioxide to push the planet beyond 2°C of warming by as soon as 2033.
That said, the exponential energy consumption and carbon emissions produced from the proof-of-work algorithm required for mining Bitcoin and other cryptocurrencies is directly against the vision of this technology.
Many crypto and blockchain-based companies are looking to technology to help solve social and environmental issues of our time, such as sustainable supply chains and decarbonizing and democratizing energy systems. But for now, what is the solution to all the havoc cryptocurrencies mining has created?
One obvious solution to the issue of energy consumption is switching to consensus protocols other than Proof of Work (POW).
Lightning Network update, for example, allows a combination of off-chain and on-chain transactions which improves the overall efficiency of the Bitcoin platform. It was welcomed by the community for its speed as well as energy-friendly qualities.
Advances in computer chips are also continually improving the efficiency of computation relative to power. However, Bitcoin’s core algorithm means that as long as there is money to be made, miners will continue to consume more power.
The nature of income is yet to be decided after all the bitcoins are mined. The technology continues to expand and these small concessions will certainly not be enough to save the industry from exorbitant energy mining units are consuming.
Ethereum, the second-largest cryptocurrency after Bitcoin is currently in the process of transitioning from the proof-of-work algorithm to a proof-of-stake algorithm called Casper. This news is floating since the past two years but the essential point here is protocol Proof of Stake will ideally eliminate the energy-consuming process of mining because there is no competition to earn rewards. Rewards are allocated based on the stake you have in the network.
EOS is a cryptocurrency and blockchain platform designed using a Delegated Proof of Stake (DPOS) algorithm. With the DPOS system, every wallet that contains coins can vote for representatives. These representatives validate transactions, form consensus and are paid for their efforts through the system.
EOS is the fifth-largest cryptocurrency and many believe it could lead the way in alternatives to proof-of-work. Many other cryptocurrencies have invented multifarious consensus protocols and all of them,
It’s truet the cryptocurrencies can use solar energy or windmill energy in order to produce a large amount of electricity, and this appears to be a more long term and probable solution especially for Bitcoin. Few have already started and few have also opted for thermal power plant projects in order to save the planet earth from serious issues like global warming.
Bitcoin mining has become a competitive and profitable business and we are seeing large-scale mining warehouses, with more and more powerful computers, emerging daily in the hopes of profiting from this market. This exponential growth in computer power is guzzling energy at alarming rates.
Though difficult to find consensus on the exact figures, one source estimates that miners use around 29.05TWh of electricity annually. That’s roughly 0.13% of the world’s annual energy consumption. In May, the United Nations signed a memorandum of understanding with nonprofit organization W Foundation to promote global climate action projects, including compensating those who take climate action with cryptocurrencies.
The Netherlands, as an example, is operating on a new European Waste Transportation. This whole new operation is using blockchain technology. The supervisor of waste transportation in the EU is going to apply this process.
Pushing the startups to create an ecofriendly environment where these mining units will be fuelled by the electricity produced by renewable resources is what this industry urgently needs.
Perhaps other “energy-offset” solutions can be proposed….
Source — Tech bullion