Today we are going to explain why cryptocurrency mining is bad for the environment. Elon Musk has become a specialist in putting debates on the table, making the latest one revolve around why cryptocurrencies are bad for the environment. The Tesla founder rejected that his electric cars could be purchased with Bitcoins, because of the increase in fossil fuels for Bitcoin mining and transactions, according to a statement released last month by the company.
This statement strikes directly at cryptocurrency advocates, who argue that their energy expenditure is less than that of central banks issuing traditional paper money. The Cambridge Center for Altenative Finance estimates the power used in Bitcoin mining reached an all-time high with a 141.28 TWh rate.
Why cryptocurrency mining is bad for the environment?
The intensive energy use required by cryptocurrency mining in computer equipment would be reduced by the use of renewable energy, but the geographical distribution of the areas where mining occurs reflects that there are difficulties in sustaining this theory.
China has the most of the miners, and some entrepreneurs in this field such as Zhang Nangeng, CEO of Canaan Inc, have acknowledged that mining using fossil fuel energy hinders the efforts of companies such as his, which advocates the use of renewable energy. Two-thirds of the energy produced in China comes from fossil fuels, which has a notable impact on carbon dioxide emissions.
The rise in the price of Bitcoin seen in the first half of the year has inevitably attracted new investors. This increased interest in the cryptocurrency market, so the increase in electricity consumption was hardly avoidable.
Musk’s announcement about the rejection of Bitcoin again demonstrated the volatility of this market, leading this cryptocurrency to drop in price.
Countries that have made a firm commitment to renewable energy, such as Iceland and Norway, allow cryptocurrency mining to be much more sustainable and environmentally friendly. The University of Cambridge points out that the use of electricity from renewable energies is increasing, accounting for 39% of total mining on the planet and with an upward trend.
However, despite this promising data, the Nordic countries have a long way to go to become the area where most cryptocurrency mining takes place. As can be seen in the graph from Cambridge University, miners are still overwhelmingly located in China, and even in China, the mobility of miners varies depending on where the cheapest electricity prices are set, not always from clean sources.
With most countries concerned with reducing their carbon emissions in the medium and long term, the roadmap for the various cryptocurrencies must include a more environmentally friendly conversion.