There is no doubt that cryptocurrencies are the future of finance. In the recent future, you will see blockchain and crypto technology dominate the financial world as we know it. However, this doesn’t mean that the path to a cryptocurrency-dominated future will be a simple one. While crypto gains traction across industries, the debate about energy efficiency and the effect of crypto mining on climate change is now global. But this gives rise to certain myths that cloud the minds of the uninformed. Therefore, we will talk about the top crypto myths around its effects on climate, and debunk them.
Debunking The Top Crypto Myths
Myth #1: The Crypto industry is doing nothing to be sustainable and green
This is one of the top crypto myths, and a belief held by many who are unfamiliar with the inner workings of the crypto industry. The Crypto Climate Accord (CCA) is a non-profit that has made its mission to eliminate carbon emissions generated by the crypto industry by the year 2030. With over 45 enterprises and people joining these accords, it is a worthwhile effort that aims to move towards a better, greener Earth with environment-friendly cryptocurrencies.
Myth #2: Crypto mining is becoming more efficient
Despite all the hopeful and positive information that surrounds the crypto industry, we need to consider the things that are true about the harmful effects of mining.
As of today, crypto mining operations to be viable need massive investments in warehouses that contain piles and piles of computing hardware resources that are known as Application Specific Integrated Circuits (ASIC). Most of the energy costs involved in such mining arise from nothing but powering these units. This means that anyone who is mining cryptocurrency in such a fashion will always go for the cheapest equipment possible. This means less recycling and upcycling of computing equipment. To be more specific ASICs cannot be repurposed very easily leading to huge amounts of hazardous electronic waste on an annual basis.
Myth #3: Crypto mining is inherently unsustainable
An extension of the myth shared above, crypto has earned the undeserved reputation of being inherently unsustainable due to its perceived high energy requirements. One has to understand that renewable energy sources are intermittent energy supply sources at best, at least, in the current state of things. When you look at how crypto needs energy constantly, you can add two and two together. You can see that crypto can ensure that all that intermittent energy that is generated and needs to be stored, or expended to avoid wastage of the intermittent energy that is generated.
This way all intermittent sources of energy can be consistently put to use, to generate something that has a lot of transferable value that can be passed on to power green technologies. Basically crypto provides a constant load to utilize the power generated making coin mining actually green, in a sense!
Myth #4: Bitcoin encourages investment in clean energy
Here are some facts and statistics that debunk the myth stated above:
Some of the most popular locales for mining cryptocurrency are Chinese hydroelectric power plants. China meanwhile has cracked down on coin mining with the rest of the crypto mining operations relating to Bitcoin still being powered by fossil fuels.
Inexpensive coal in Australia has led to new purchasers through cryptocurrency such as Bitcoin. This is leading to the reopening of redundant coal mines there to power coin mining operations. Another issue is the relocation of crypto miners to any location to utilize residual energy. This, in turn, is driving up the profitability of natural gas in Siberia along with encouraging oil drilling in Texas.
Myth #5: Bitcoin wastes energy
Building on the last myth, and going into specifics, it is said that crypto mining wastes energy. Researchers have unfairly and in some cases probably inaccurately compared the energy usage of Bitcoin to that of the country of Chile.
Now, let us look at what energy wastage actually means. Energy is wasted only when it is put to use to power something that generates less value than what went into it to power it. Considering that the Bitcoin network generates around $1 trillion in value while serving close to millions of people, it is definitely pulling its own weight and a whole lot more. This is reinforced by smaller but more significant stats that say that Bitcoin and other cryptocurrency miners usually relocate to where the supply of power is in aplenty.
Another vital stat to keep in mind is that at least a minimum of 39% of Bitcoin mining is sourcing its power from renewable energy sources. This statistic making the argument for green cryptocurrencies is also expanding rapidly with each passing second!
Much like any other traditional financial system, cryptocurrencies are also riddled with questions about sustainable practices. While there exists a doubt in the minds of many about crypto being a huge energy waster, people that believe in the technology say that crypto is on the same level as banks and other financial institutions. Whatever the future holds for us and the crypto realm, we hope these debunked top crypto myths help you make up your mind about the pros and cons of cryptocurrency and climate!