Not All Cryptocurrency Is Bad For The Environment Here’s Why
Artwork by Milad Fakurian
Over the past decade, cryptocurrency has spurred mixed reactions from the global community. Some people have embraced the decentralization it brings to currency systems worldwide, while others have pushed it aside due to the perceived risks.
Governments worldwide, including China and Nigeria, have set up measures against crypto exchanges, believing it will encourage money laundering and other illicit financial activities. Numerous activists have also decried the harmful impacts of crypto mining on the environment.
Crypto & the Environment
Crypto blockchains are lengthening and as such, the rewards for mining cryptocurrencies are diminishing yearly. This has made mining both an increasingly challenging task and a decreasingly profitable endeavor. However, this hasn’t stopped miners from all over the world to keep trying.
In this ceaseless attempt to keep their favorite blockchains running, the computing power needed to sustain these undertakings has only increased over the last decade. Consequently, the demand for energy has skyrocketed and given the crypto industry a bad and unsustainable reputation.
According to Digiconomist, Bitcoin mining releases about 96 million metric tons of carbon dioxide, similar to the amounts released by a few small countries. Forty-seven million tons of carbon dioxide is released by Ethereum annually.
Combining the above observations, we can stipulate that the levels of energy consumed by crypto mining will only increase over time due to rising user adoption and reduced mining efficiency.
Although crypto comes with its fair share of problems, it should not cloud the fact that it has evolved into a means for people to make a difference in the world.
Every Bit Counts
Numerous environmentally conscious individuals and groups have employed cryptocurrencies like XRP to fight against climate change. A precise instance of this is how intelligent token contracts have allowed charitable institutions to raise funds quickly, unlike methods used in the past.
World of Waves, an environment-focused NGO, raised over $50,000 by encouraging environment enthusiasts to buy $WOW in 2020. With an 11% tax on each transaction given back to all holders, funds are extracted monthly for donations towards nature-conserving activities and preserving wildlife. This method helps impress charitable giving into the token’s algorithm, which encourages holders to invest and hold their investment in the cause.
Similarly, Solarcoin rewards people who install solar panels with tokens in their homes and businesses. The end game here is that solar will become accessible as soon as the coin price beats the energy generation costs.
Frontiers of Eco-friendly Cryptocurrency
Committed to being carbon neutral by 2030, XRP is one of the most eco-friendly currencies on the market, having zero mining and no proof of work. It is also a global payment system aiming to make moving money faster and cheaper worldwide.
Transitioning to more environment-conscious and energy-efficient systems is no easy feat as there is no centralized oversight to enforce this. Initiatives like the Bitcoin Mining Council and the Crypto Climate Accord now exist to make blockchains run on entirely renewable energy by 2025 and reduce crypto emissions to zero by 2040.
Cryptocurrencies cannot ignore environmental considerations forever. Newer green cryptocurrencies like XRP could eventually eclipse Bitcoin and Ethereum.