Bitcoin has seemingly taken over financially in the blink of an eye. With its worth soaring in the last year and the company being something of an overnight success, it’s left those who invested early with thousands of dollars more in their pockets and latecomers scrambling to get in on the game. However, whether or not you trust the validity and stability of bitcoin, there is one aspect that needs to be considered: it’s environmental impact. It appears that bitcoin mining has a negative effect on energy conservation and the use of materials in crafting computer components. Let’s take a look at just exactly what bitcoin is and how it will impact energy consumption over time.
What is Bitcoin?
Bitcoin is a crypto-currency that was created as a line of code that’s transferred from one person to another as a form of online payment. It’s regulated by encryption software, so it can’t be created without effort, or mining, that verifies a transaction through complex blockchain technology. Initially, crypto-currency had a bad rap, and was mainly thought to be used by online scammers. Now it’s come to the forefront of public attention, growing in legitimacy as it spreads. While there are other types of crypto-currency out there, bitcoin seems to have taken the lead in the mainstream.
Many bankers say that bitcoin, or any crypto-currency, is a bubble that will eventually burst. It was created as a means of paying for things online that don't need to go through a central banking system, effectively devaluing actual currency. it’s not a currency with any physical backing, and its value and popularity may wane or end up using so much energy from mining that it’ll take itself down. So just how does bitcoin mining impact energy use? Let’s take a look.
Bitcoin Mining and Energy Over-Use
Since bitcoin is a line of code that’s transferred from one person to another through an encryption process, it has to be “mined” by those accruing it. In this circumstance, mining means that a computer makes complex calculations of transactions. Doing this takes a large amount of energy, as it’s done using high-quality computers in server farms all over the world. These computers are using up a large amount of fossil fuel-dependent electricity as they chug along.
Some have claimed that bitcoin’s energy impact is more than a small country. The calculations of the amount of energy used to mine bitcoin varies based on the anonymous nature of its use. It has been estimated that even at the lowest energy use possible, the mining of bitcoin can still produce up to 13 terawatt hours. This is the same amount of energy used by the entire country of Slovenia!
Another aspect of bitcoin mining that’s harmful to the environment is the components that go into the computer parts that are used in the server farms. In order to mine as much crypto-currency as possible, people have purchased an extreme amount of graphics cards and other PC components, increasing the demand and driving up prices. Unfortunately for the environment, computer parts tend to be made of materials that require actual mining deep into the earth. Not only do the materials destroy ecosystems around the mining facilities, but the energy required to actually build the tiny, complex parts is also an important factor to consider.
Some opponents of crypto-currency say that the mining is causing an unnecessary problem. The mining is being done to complete transactions, which is something that everyone could already do previously. It’s not necessary to use all of this energy and materials for bitcoin mining, and it will continue to be harmful for the environment. But can this problem be reduced in the near future?
Can Bitcoin Mining Evolve Over Time?
The short answer is yes. Technology changes so quickly these days that ways to improve upon bitcoin mining could be just around the corner. But the bigger questions are when will it evolve, and will it be enough to justify the overuse now? There are many who are in favor of the bitcoin mining business, like Nadine Damblon, who says that the complaints are just an old argument for a new concept. Nadine is the founder of HydroMiner, a company that specializes in bitcoin mining using hydro power stations, which use cleaner energy than many other mining sites. She says that as crypto-currency evolves, so will the hardware and efficiency that’s used to mine it. The overall issue is a basic need for a widespread shift to the use of renewable energy.
While there's much debate over the use and over-use of the energy consumed to mine bitcoins, one thing is clear: the need to focus on more renewable energy that shifts away from fossil fuels is bigger than ever. Hopefully, the debate over crypto-currency mining and its use of energy will shed a fresh light on an issue that has been debated for a long time. If this is something that’s not going away any time soon, there needs to be a shift towards renewable energy to sustain it and to protect the environment.