With Elon Musk raising concerns over Bitcoin’s environmental impact, the mining of cryptocurrencies has risen to the fore as a controversial issue. The BBC earlier this year reported the Bitcoin network consumes about 121 terawatt-hours of electricity annually, or as much as a medium-sized Scandinavian country. In terms of electronic waste, collectively comprising all kinds of electronic goods, from gadgets to large equipment, BTC and its single-use hardware (replaced every 1.5 years) has been pegged as being responsible for a massive amount of “e-waste,” as much as 11.5 kilotons, annually (on par with Luxembourg). Such intense scrutiny and negative attention has at times been a drag on the largest of all digital assets and on the entire crypto space in general. However, the debate has raised awareness and sparked change across the entire landscape. Mining, as it turns out, is about to get a whole lot greener.
For starters, sustainability issues surrounding crypto mining can be instantly mitigated – by not doing any mining, whatsoever. That’s currently the case with Proof-of-Stake (PoS) blockchains, such as Cardano, Polkadot and Solana (which are the three largest) as well as Algorand, Avalanche, EOS, Tezos and Tron. Ethereum, meanwhile, is in the process of moving its chain to a PoS-consensus mechanism. Because Cardano, for example, doesn’t involve heavy-duty hardware and can be exchanged via an ordinary computer network, it uses far less energy relative to, say, BTC. Should PoS blockchains continue to rise to ever-more prominence in the crypto industry, right there in itself is an opportunity to dramatically slash energy use. In the case of networks, such as BTC’s, that require Proof-of-Work (PoW) mining, and thus hardware, might not be able to pivot very quickly, if ever. In the case of ETH, the transition has taken several years and continues to unfold with some lingering concerns about miners who may not warm to the new “validator” role that could dent their profitability. Once “Eth 2.0” fully arrives, the total network’s energy use is going to fall off a cliff, by 99.95%.
To achieve more sustainable BTC mining, drawing upon renewable energy sources, the crypto community has come together, forming charitable organizations and, crucially, getting behind the Crypto Climate Accord (CCA). Inspired by the Paris Climate Agreement, the CCA aims to promote net-zero emissions by 2030. Enjin, Ripple and Tezos are all CCA signatories. The movement, its leaders vow, will work to “develop standards, tools, and technologies with CCA Supporters to accelerate the adoption of and verify progress toward 100% renewably powered-blockchains” by the time the United Nations Framework Convention on Climate Change’s Conference of the Parties (UNFCCC COP) takes places in 2025. Though Bitcoin isn’t involved with the Crypto Climate Accord, there is another organisation that has been playing its part for a greener mining future. The Bitcoin Clean Energy Investment Initiative has been set up to encourage the use of renewables in Bitcoin’s ecosystem, with financial services company Square donating $10 million to support companies that have been helping to encourage greener mining. With the uniting of bigger players within the industry through these organisations, it’s much easier to set carbon-limiting and renewable energy goals to reach and makes the possibility of doing so higher. With more awareness, the environment is now taken more into account when mining currencies. However, there are limits to how many are involved, and crypto’s biggest players have yet to join up. Meanwhile, the newly formed Bitcoin Mining Council, led by MicroStrategy CEO Michael Saylor, is actively promoting cleaner mining in North America.
Some countries may find it easier to mine cryptocurrencies sustainably than others, such as El Salvador. The country has recently made Bitcoin legal tender, and they’ve come up with an interesting way to mine it. Instead of the more traditional methods, El Salvador is using its volcanoes to mine their Bitcoin. Volcanoes generate lots of energy, which is both clean and renewable. It’s also said to be very cheap, which is useful for a country poorer than others such as the US or the UK. Although, as you might imagine this solution isn’t ideal for countries with no or very little volcanic activity! However, there are other ways to generate electricity in a sustainable way. For example, wind or solar power could be harnessed in order to generate the electricity needed.
And while El Salvador’s approach obviously might not work in a lot of countries there are numerous alternatives, including wind, hydro, geothermal and solar, for sustainably generating electricity. Solutions aren’t in short supply; but nothing comes easy. Creating an entirely new renewables-centric infrastructure while ending decades-long dependency on fossil fuels is a heavy lift with all sorts of challenges, including the overhead costs associated with new technologies, such as solar panels. Fossil fuels still dominate, accounting for 80% of U.S. energy. The CCA’s zero-emissions goals may be lofty but by no means are they out of reach. With enough awareness, and action, the crypto industry can get there. There’s no turning back – the era of greener crypto has now commenced.