One of the most commonly cited problems with increased global use of Bitcoin is the energy consumption involved in the process of running the Bitcoin network. The proof-of-work mining mechanism that was first implemented with Bitcoin and has since been emulated by numerous other cryptocurrencies, is inherently energy intensive. In essence, the energy need to operate a miner or facilitating of mining hardware is like a buy-in cost. Because of this high price to be a Bitcoin miner, it eliminates the occurrence of hackers. The cost involved in the hardware energy consumption is only worth it if a miner ends up properly participating in the network to validate transactions and receive transaction fees.
Because of this, many people claim it would be totally unsustainable to have Bitcoin being used as a prevalent global currency. But there are two major issues in contrast to this. First, it does not take into account all of the energy used in order to operate the current financial system of banks, buildings, employees driving cars to work, atm machines on 24/7 and simply the cost of printing physical fiat dollars. Second, this argument against proof-of-work cryptocurrency ignores the source of the electricity used.
Renewable Energy For Sustainable Cryptocurrencies
Not all electricity is created equal. Burning fossil fuels to create electricity is most common, but is the least sustainable. Some countries have high instances of hydroelectric, wind or solar, but these industries are still growing and creating better products. In order to facilitate this growth, governments can give incentives to businesses or individuals for using renewable energy sources. In one local government in the United States, new regulations are being proposed to deal explicitly with cryptocurrency mining. Unfortunately, the regulators cite the same old watery arguments against Bitcoin.
...a single transaction in Bitcoin, the largest cryptocurrency, consumes thousands of times more energy than a conventional credit card transaction, and the estimated total electricity consumption of cryptocurrency mining in Missoula County is equivalent to one-third of residential electricity consumption in the county, and will rise to the level of 100% of residential electricity consumption in the county if planned expansions are carried out;... the large and increasing energy consumption of cryptocurrency mining operations results in increased greenhouse gas emissions that cause climate change...
However, regardless of the fuel behind these regulatory changes, the result is moving toward more energy efficiency. The county will have new zoning regulations which require that cryptocurrency mining operations operate in a sustainable manner. Potentially when these standards are placed on all businesses, there could be real change.
“These facilities shall be required to develop or purchase sufficient new renewable energy to offset 100 percent of the electricity consumed by the cryptocurrency mining operation. To meet this condition, the cryptocurrency mining operation must be able to establish that their actions will introduce new renewable energy onto the electrical grid beyond what would have been developed otherwise.”
By: BGN Editorial Staff