As the first and most popular crypto in the market, Bitcoin has always garnered a lot of attention, both good and bad. On the upside, Bitcoin’s fame turned it into the go-to crypto for traders and investors.
People prefer to buy Bitcoin more than any other digital currency available because of its value, price performance, and strong brand identity, as well as the facilities it provides.
On the downside, being constantly in the spotlight means that Bitcoin’s every little flaw, whether real or perceived, got picked away and dissected to the very last detail. That’s exactly what has happened with Bitcoin mining and the associated carbon emissions.
The environmental impact of Bitcoin mining has long been a major source of criticism and debate, attracting conflicting views from crypto enthusiasts and analysts inside and outside the industry.
Critics state that Bitcoin’s energy consumption is comparable to or even exceeds that of many countries around the globe, with some studies estimating the network’s annual electricity usage at a rate of 127 terawatt-hours (TWh).
On the other hand, supporters argue that the process is required in order to ensure the security and the proper functioning of the network, serving as a driver of success for so many years.
Up until now, the Bitcoin community has been rather ambivalent on the matter, but with environmental concerns intensifying, addressing this issue is more important than ever.
Fortunately, advancements in the mining industry are now making it possible for Bitcoin to improve sustainability and put these concerns to rest once and for all.
We might be looking at the wrong culprit
It’s easy to look at the numbers on Bitcoin’s energy consumption provided by different research bodies and organizations and be convinced that the blockchain platform is indeed wreaking havoc on the environment, but statistics don’t tell the whole story.
In fact, without proper context, one can easily misinterpret the data. That’s why we first need to explain how Bitcoin mining functions and shed light on its environmental implications.
Bitcoin mining is the process of validating and recording transactions on the Bitcoin blockchain which also allows new coins to enter into circulation.
Those who participate in this process are known as miners. To enable mining, the network uses a proof-of-work (PoW) mechanism which requires miners to compete against each other in solving complex mathematical puzzles.
The miner who reaches a correct solution is rewarded with freshly minted BTC for the work they’ve done, hence the name proof of work.
While the practice has proven its efficiency over the years, the problem is that PoW is by design an energy-intensive process.
Although, in theory, mining can be carried out using a normal computer, nowadays miners employ specialized computers and sophisticated hardware in order to achieve results and boost mining efficiency, and this equipment obviously consumes massive amounts of energy.
As a result, Bitcoin mining has been demonized for its power usage and the negative effects this has on the environment.
However, one shouldn’t be so fast to put the blame on Bitcoin mining rigs for polluting the planet because the activity per se doesn’t actually generate greenhouse gas emissions.
The real problem lies elsewhere, with the companies that use fossil fuels to produce energy. They’re the ones that are depleting the earth of its finite resources and hurting the environment with their carbon footprint.
It’s rather unfair to point fingers at the consumer and ignore the provider.
As long as these companies continue to engage in the exploitation of fossil fuels and the manufacturing of fossil fuel by-products, consumers, including Bitcoin and many other businesses and entities in need of energy will consume their products and indirectly partake in these damaging practices.
It’s not miners’ fault that the most prevalent form of energy available at the moment comes from fossil fuels.
Tesla was one of the first major players to point out Bitcoin’s sustainability shortcomings when they stopped accepting BTC payments for their products, and many have followed suit since then.
But most have settled for repeating what others have said without taking the time to explore this issue in-depth and figure out for themselves what’s really going on behind the scenes, leading to a distorted understanding of Bitcoin mining.
How can Bitcoin mining become more sustainable?
Although Bitcoin can’t do anything to change how the energy industry operates and the resources it uses, it does have the ability to address its electricity consumption and make its network more environmentally friendly.
A viable solution in this respect would be for mining rigs to switch from using fossil fuel energy to renewable energy sources like wind and solar as they become more widely available.
We’re already seeing an increasing number of miners using hydropower, wind, nuclear and solar energy to power their setups, with almost a quarter of Bitcoin mining relying on clean energy.
Advancements in mining hardware can also contribute to improving Bitcoin’s energy efficiency.
With manufacturers constantly looking for ways to cut back the energy consumption of the mining rigs they produce while increasing performance, the mining rigs of the future are bound to be more sustainable.
Miners who want to compensate for the gas emissions arising from the energy they consume can join a carbon offsetting program.
Although this does not eliminate the root cause of the problem, it’s a great way to lay the groundwork for more environmentally friendly operations in the future.
There’s also the option of transitioning to a proof of stake (PoS) consensus mechanism, like other cryptocurrencies such as Ethereum have already done.
This protocol uses significantly less energy than the PoW model and can solve much of the network’s sustainability issues.
However, Bitcoin’s team of developers has not expressed any intentions to make such a drastic change so far, which means the network is probably going to look for other alternatives to fix the problem.
Bitcoin’s environmental impact issue is not quite as black and white as some might think. This doesn’t mean that Bitcoin is not doing any efforts to increase its sustainability credentials. The shift in miners’ behavior and practices indicates an increased interest in boosting the network’s energy efficiency and ensuring greener operations.