The Environmental Impact of Cryptocurrency
NFTs and cryptocurrencies are becoming a bigger and bigger deal — but so is their negative impact on the environment.
You might be asking yourself, how does something digital have any effect on the real world? The fact is, cryptocurrencies take a ton of physical energy to “mine,” and it ends up taking its toll on the environment.
Think about all the tasks you rely on your computer for, and how much electricity those tasks require. It’s probably not a lot, but things like Facebook and online shopping don’t exactly use an excessive amount of processing power. Cryptocurrency, however, does.
Remember blockchain? (You can check out our previous article on tech definitions). Cryptocurrency’s primary method of security relies on blockchain technology. Every computer with cryptocurrency software participates in the process of adding to the blockchain and verifying the security of a given cryptocurrency. As a reward for utilizing your computer’s processing power, you can earn units of any given cryptocurrency. Therefore, there is a real monetary incentive to contribute as much processing power as possible to the “mining” process. This inevitably leads to organized mining groups who purchase large numbers of GPUs (graphic processing units, the same chip that video game graphics rely on). Again, one single user mining bitcoin isn’t a huge issue, but when you start getting large groups using large amounts of processing power, the energy uses skyrockets.
If you want an easy comparison, cryptocurrency uses about as much energy as the entire country of the Netherlands in one year. And when you think about the fact that 2/3 of bitcoin energy comes from fossil fuels, that starts turning into a pretty big climate crisis. Even the top economic advisor to the U.S. said, “the amount of energy consumed in processing [bitcoin] is staggering,” and called the entire endeavor “inefficient.”
There are a few solutions to the issue, such as clean energy or alternatives to blockchain technology that use less processing power. NFT artists are some of the biggest players pushing for a more environmentally-friendly solution. Unfortunately, until any changes are made, it’s up to us to assess the importance of earning and spending cryptocurrency, and how it ends up affecting our environment.
Let us know in the comments what you think about the environmental impacts of cryptocurrency — was this something you were aware of? Also check out our previous blog post to brush up on some new tech definitions so you can be completely in the loop.