Concerns about the cryptocurrency industry and its environmental impact are on a steady rise. Bitcoin, the most popular crypto, is energy-intensive and requires millions of high-powered computers for mining.
This has put the mainstream investors and enthusiasts in a tough place and forced them to think about whether crypto can ever be eco-friendly.
In this post, we’re going to discuss what caused the shift to a green cryptocurrency in the first place and whether it is possible for crypto to become eco-friendly or not?
What Caused the Shift Towards a Green Cryptocurrency Industry?
Until recently, crypto’s high energy consumption only concerned the environmentalists. However, their criticism impacted everyone when Elon Musk tweeted that Tesla won’t be accepting cryptocurrency payments.
Musk made the decision as a result of the environmental impact caused due to crypto. Powering a single bitcoin transaction consumes over 1,173 kilowatt-hours of electricity — enough to power a typical American household for 6 weeks. Apart from this, China’s ban on crypto mining and trading is also a reason why the industry is shifting.
Can Crypto Become More Eco-friendly?
Yes, crypto can possibly become eco-friendly. But to do so, both new and existing blockchain projects have to migrate toward less energy-intensive systems. Apart from that, they’ll also have to explore renewable energy-based mining.
A leading cryptocurrency project has already begun shifting from a PoW (Proof of Work) to a PoS (Proof of Stake) system, i.e., Ethereum. It aims to use approximately 99.95% less energy after the shift.
In addition to this, organizations like Crypto Climate Accord are making efforts to have all blockchains powered by renewable energy sources by the year 2025. Crypto Climate Accord also created an audit that adds up the impact of cryptocurrency on the environment.
Besides, the Bitcoin Mining Council surveyed nearly 32% of its network and found out that users are already employing a 67% renewable energy mix for mining.
What Does the Future of Crypto Looks Like?
The recent advancements are likely to minimize the environmental impact of cryptocurrency and blockchain networks. However, there might still be some problems left to deal with — like the e-waste produced from mining operations. In the future, non-PoW cryptocurrencies would probably drive the development of larger and newer mining rigs that can potentially reduce e-waste.
Moreover, private crypto companies are also encouraging other companies in the crypto field to sign the Crypto Climate Accord. This may help achieve the aim of net-zero emissions from the electricity consumed through crypto-related operations by 2030.
