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Crypto Shaping the 2022 Global Environmental Landscape

17 января 22

It has been 13 years since we were introduced to cryptocurrencies by the emergence of Bitcoin in 2009. What was viewed as a far-fetched and risky alternative to traditional banking by most at the time, got quickly adopted by those who saw the true potential of blockchain and decentralized currency.

In 2021 with Bitcoin reaching US$100,000 most critics were forced to embrace that crypto is here to stay. Let’s look at crypto’s environmental footprint in 2022.

Risk to the environment

You might wonder – what does a digital token have to do with the environment? To answer this question one needs to understand how Bitcoin and other cryptocurrencies are created.

The most basic description is a network of computers solving complex mathematical puzzles, which, once solved, are added to the blockchain, and the process starts all over again.

In the earlier days the “puzzles” were far less complex and could be solved quite quickly on a regular computer that you and I use at home, but now the equations are few trillion times more complex. This means that computers with a lot more processing power need to be used to yield any noticeable results. This, of course, means – guzzling huge amounts of energy to make it work.

How much energy? Well, we have data collected by the University of Cambridge that Bitcoin mining alone is responsible for 0.5% of global electricity consumption. That is more power than Sweden uses in a year…

Regulatory action in 2022?

Pete Howson, a senior lecturer in international development at Northumbria University in Britain, said that in 2022 it is likely to see “stronger public opposition” to bitcoin and other crypto currency mining on environmental grounds, which could force regulators around the globe to act.

Nearly half of Brits who participated in YouGov poll on banning cryptocurrencies to combat environmental change have voiced their support. Scandinavian countries have also expressed support for a potential ban on bitcoin mining across Europe.

Remember the 2021 power outages in Texas that caused 700 deaths? At that same time the U.S. overtook China as the largest bitcoin miner in the world. It could be that the crypto mining had a role in these outages, in which case regulators should take notice.

Can cryptocurrencies be part of the carbon neutral future?

We do not know how the crypto future will look like, but it must be said that at the current rate it is necessary to start investigating and perhaps regulating crypto mining around the world.

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