The cryptocurrency industry has long been criticized for its huge energy consumption. While cryptocurrency has many uses, it also causes a large carbon footprint. This leaves many to believe if this technology is truly sustainable amidst theories of a global climate crisis. As a result, developers are helping cryptocurrencies like Ethereum and Bitcoin “go green” without compromising any benefits.
We’ve analyzed a few examples of this to tackle the question if green bitcoin mining and green crypto, in general, are possible.
Why the need for green bitcoin mining?
Bitcoin still uses the PoW system. In a way, PoW is beneficial to bitcoin – it creates rarity and increases the value of a block. Unfortunately, bitcoin is the biggest offender when it comes to energy consumption. In 2021, bitcoin was using enough energy to power the state of Georgia (130 TWh).
Mining cryptocurrency causes a huge amount of pollution. It’s drawing criticism from governments around the world who are already looking to impose new regulations in 2023.
For example:
- China’s 2021 crypto ban wiped out $400 billion of bitcoin and,
- the European Union also considering a ban due to its energy crisis, this is a major concern.
- Plus, the huge carbon footprint goes against many UN countries’ climate goals.
Miners also struggle to keep the lights on with the huge energy requirements – especially when competing against large-scale mining g operations. Bitcoin-mining farms can afford to buy power even when demand is low.
These big operations create fierce competition. For example, the largest mining operation in Texas, Riot Blockchain, taps directly into the local grid for power. It has a ten-year contract with the town’s electricity facility.
Most miners cannot reach that level unless they use renewable energy.
Sustainable crypto mining is one answer to long-term crypto viability.
Sustainable crypto mining keeps all benefits of the PoW system without wasteful energy consumption. Hence, going green will satisfy both bitcoin users and governments around the world. To do this, bitcoin miners are looking into renewable energy sources like:
- Solar,
- Hydro,
- Windo,
- Tidal
- Geothermal and,
- Biomass.
Many of these options are in their early stages but at least give hope for the future. Meanwhile, some blockchains took a more proactive approach to their energy usage by changing their consensus mechanism altogether.
How Ethereum’s Merge introduced sustainable crypto mining
Ethereum’s “Merge” was a considerable upgrade, one that changed the entire crypto landscape. The upgrade changed Ethereum’s consensus mechanism – which is a system that validates the authenticity of new crypto. It also ensures the validity of all the crypto transactions on the blockchain.
Before the merge, Eth used the Nakamoto consensus mechanism, a PoW (proof-of-work) system. PoW uses miners to unearth new blocks of crypto by solving a mathematical problem. By solving it, miners unlock a 64- number called a hash. With the hash, they could add new blocks to the blockchain.
Suggested reading: Proof-of-stake vs. Proof-of-work
However, solving the hash required a huge set-up of hardware and software. With their many computers running all the time, miners had to use incredible amounts of electricity. In 2022, miners were consuming about 70 TWh per year. For reference, the average household uses about 10,000 kWh per year.
In 2022, Ethereum changed to Gasper, a PoS (proof-of-stake) model, instead. It switches out the power of computational mining power for a stake of ETH. In PoS, people who hold stakes are validators. Staking their ETH activates the generation of new blocks of crypto. The blockchain’s algorithm chooses validators at random to generate new ETH. Validators can enter the PoS system at a lower cost since they don’t need specialized equipment.
The new consensus mechanism cut Ethereum’s energy consumption by 99%. Almost all ETH users stayed for the change, and the price of ETH increased by 3%. Overall, Ethereum’s introduction to sustainable crypto mining was a huge success. It created a new wave of excitement for the concept of green mining on other cryptocurrencies.
Is Bitcoin mining eco-friendly with nuclear energy?
With Bitcoin stuck with its PoW mechanism, the only solution to green Bitcoin mining is some form of alternative energy. Surprisingly, nuclear power is at the forefront of the discussion.
Bitcoin’s first nuclear-powered mine is starting operations this year in the US. It will have almost no carbon output. Smaller mines are taking notice, and they’re trying to make the switch.
There are several benefits to using nuclear energy to mine Bitcoin. Such as:
- Nuclear power has the highest energy capacity of all power sources.
- It is three times more reliable than wind or solar plants.
- It’s twice as good as natural gas or coal.
- Nuclear fission is 8,000 times more efficient than fossil fuels.
There are some misconceptions about nuclear power (e.g. dangerous). In reality, nuclear power releases less radiation than any other energy source. Of course, there’s always a danger of accidents. Still, studies show that the worst possible nuclear plant accident is less destructive than an industrial accident.
Finally, nuclear power costs are competitive with other sources. All these points make nuclear energy compatible with bitcoin mining. It works as a long-term solution, and miners are already using it.
Which direction in the “Green bitcoin mining” movement the world chooses to go remains to be seen. What we can say is there are plenty of sustainable options to explore and energy usage is certainly not a reason to be bearish on bitcoin or any cryptocurrency for that matter.
Green Bitcoin Mining on YouHodler
For those looking for an environmentally friendly and affordable alternative to Bitcoin mining, YouHodler has a feature for you. Cloud Miner is a reward system offered by YouHodler where clients can earn real bitcoins by completing simple tasks that “mine” blocks.
The computational power in Cloud Miner is called “Sparks.” You need more sparks to mine more bitcoin on YouHodler. To get more sparks, simply complete tasks and level up through the eight available levels.
Disclaimer: YouHodler does not use the device’s CPU resources to operate Cloud Miner
Watch the video below to learn more about Cloud Miner.
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