Green Crypto: How Secure Is The Future Of Your Coin?
How you see the future shaping up is always a fundamental to planning your business or your own personal finances. From investment, to home-buying, to launching a startup, a cogent analysis of the short and medium-term horizon is essential to assist you in making big decisions – and so it is invaluable to know, or at least have a strong idea, what will be important in the next decade or so.
Two of the hot issues that dominate the thoughts of futurists right now are cryptocurrency and climate change. The former is spoken of as a realistic and viable alternative to the banking system of the present day. The latter really needs very little introduction; we know the stakes if the planet’s temperature warms by even a few degrees. And the bad news for people who intend to build a future on crypto is that it’s seen as a likely contributor to environmental catastrophe. Is a clash inevitable as crypto and green visions of the future face off?
The information we have right now
It is a fact that Bitcoin mining, and by extension the vast majority of cryptocurrencies, use a lot of energy as part of the process. This is close to inevitable; mining Bitcoin takes a very powerful computer running almost non-stop for long periods. A recent study showed that BTC itself – without any of the other coins included – used up as much energy in one year as the entire population of New Zealand. Much of the mining involved in crypto takes place in China, which has a mostly coal-fired power grid, so you can see the issue.
What is being done to change this?
The risk to the environment from crypto coins has been covered to some extent by the broader media, and recently BTC took a bump in the market as a result. Tech magnate Elon Musk announced that he was divesting from his interest in the coin due to its impact on the environment. Some measure of the mining burden has moved in recent times, with largely renewables-reliant countries like Norway and Iceland becoming a focus. In the USA, locations with a surfeit of wind and hydro power are attracting miners, while community solar provision could help less intensive miners. Alternatively, you could invest in a coin that doesn’t need mining.
Is there room for both an environmental movement and a crypto community?
Predicting the future with any measure of accuracy is always tricky: who’d have guessed the impact of the Covid pandemic back in January 2020? Certainly, the awareness of how injurious excess energy use could be for the planet could be a driver for greener practices in mining. A reimagining of the way crypto works would be welcome. One thing we can truly say is that cryptocurrency is facing a lot of these obstacles for the first time, and we don’t know how they will play out because there’s no data to look at. For that reason, caution is advised when investing in any cryptocurrency that relies on mining.
Pay close attention to any news stories you might see about the challenges of Bitcoin for the environment – this could be the topic that makes or breaks a lot of the popular coins these days.
Categories: Outside Contributors