Is It Possible For Crypto To Go Green? Big Companies Are Trying, But It’s Not That Easy
Going green is an ideal way to run crypto — but is it doable?
Governments have been concerned about the negative impacts of cryptocurrency mining to the environment as it exhausts massive amounts of energy, especially for the so-called “proof of work” mechanism.
China, for instance, has banned Bitcoin mining. In Northern Sweden, Hive Blockchain, a Canadian-based company depends on hydropower plants to mine cryptocurrencies. In fact, the entire region is popular for using renewable energy.
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Is Bitcoin mining harmful to the Earth? (Image credit: Curious Earth)
Hive Blockchain In Sweden
This Ethereum mining facility in Sweden is filled with computers or a total of 15,000 mining rigs that work 24/7/365 to mine new digital currency units. Bitcoin also uses the same proof-of-work mechanism as ETH.
To mine new cryptocurrencies, they have to beat others to it and find the right answer to technical math puzzles which ramp up in difficulty as additional miners join the network. The mining process ensures that every transaction is verified and legitimate.
Hive Blockchain runs the ETH mining facility and it’s one of the first companies that have innovated to using clean and renewable energy for mining activities.
Crypto Mining’s Environmental Impact
In Sweden, both wind power and hydro power is used for mining crypto and for powering up homes and industries in the region. They are now using green energy which should encourage other countries and governments to follow through.
Crypto miners only use the excess in energy from households which when unused would be left to waste. However, with the computers running continuously, this has still alarmed government officials with the possible impact of the activity to the environment.
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BTC total market cap at $731.76 billion on the daily chart | Source: TradingView.com
Transition To ‘Proof Of Stake’ Mechanism
In fact, Swedish Finance watchdog Finansinspektionen has encouraged the European Union to completely ban crypto mining because of its extremely high energy consumption. More companies are seriously looking into tapping on clean and renewable energy to comply with the Paris Agreement.
Environmental advocacy group Greenpeace, together with other related organizations pushing for a green crypto, have called on the community to use proof of stake mechanism instead of POW as this can greatly reduce the costs for validating crypto transactions.
Ethereum is now transitioning to POS as this can lessen energy use by as much as 98%. More so, other tokens now run on POS networks such as Solana and Cardano.
However, crypto experts conclude that the transition to POS and completely turning away from POW may be far-fetched because not one unit can fully control the system. There is no central authority to begin with. And not everyone seems to agree with this transition.
Featured image from Forbes, chart from TradingView.com
