Making cryptocurrency environmentally sustainable
Mining cryptocurrencies like Bitcoin takes a lot of energy. No news to that. Based on a report by The Money Monger, mining cryptocurrency uses about 122.87 terawatt hours of electricity every year. This is more power consumption than most countries consume in a year!
As a result, a lot of people are against it, first and foremost, because of environmental reasons.
Hence, many are looking for sustainable ways to mine cryptocurrency focusing on the long term viability of the project. So the question is, what makes a cryptocurrency environmentally sustainable?
In this article, we will talk about some of the most sustainable ways to mine cryptocurrencies, as well as give some relevant examples.
Renewable energies are the most common way to reduce the environmental impact of cryptocurrency mining. There are a lot of miners who have set up their mining farms in Iceland for this particular reason. There, the mining machines are fueled by geothermal energy and cooled by the Arctic air.
Iceland, Sweden and Norway, have been ideal destinations for mining locations in the past, because of their large volumes of geothermal, hydro and wind power. However, even this solution does not look as sustainable in the long term. Many point out that Nordic power surplus is set to dwindle as aluminum smelters, oil rigs and steelmakers thirst for renewable energy. At the same time, Reuters reports that many miners plan to move to oil-rich Kazakhstan that has only non-renewable resources.
Harnessing Energy Of Volcanoes
In recent news, it was said that El Salvador is using the power of volcanoes to mine Bitcoin in a new pilot project.
The country is extremely small in size, but it has about 30 volcanoes, and among them, 20 volcanoes are potentially active.
These volcanoes produce geothermal energy, which is a rich source of power. As a result, the country is now using it to mine Bitcoin.
El Salvador is using an existing geothermal plant built in 1999. The plan is composed of 16 2,000 to 3,000 deep shafts. The plant can generate power of up to 107 megawatts. But the country is using only 5 turbines to mine Bitcoin and other ones for the country’s grid.
Investing in Environment-friendly Cryptocurrencies
Another way to make cryptocurrencies sustainable is if most investments gravitate more towards environmentally friendly cryptocurrencies. There are some new crypto coins that incorporate renewable energy into their operating model.
Some of the environment friendly cryptocurrencies are:
Cardano is one of the popular cryptocurrencies out there. This one is built on a peer reviewed blockchain. The cryptocurrency is developed by one of the co-founders of Ethereum.
The thing about Cardano is that users buy units of the coin to become members of the network. Instead of mining new coins. As a result, it uses less energy compared to coins like Bitcoin. Also, it helps Cardano to scale itself up to meet increased demand without increasing the power consumption.
Next, there is Steller which is another energy-efficient blockchain network. It uses its cryptocurrency lumen (XLM) for global payments.
Also, its consensus mechanism operates faster than proof of work and even proof of stake. The network relies on a group of trusted nodes to complete transactions.
On this network, users can trade fiat and cryptocurrencies and use it as a way to send things like remittance payments across borders without incurring steep fees or lengthy transaction times.
You can also use Nano. It is a low energy consumption cryptocurrency which has been around since 2015. The crypto coin doesn’t rely on mining. Instead, it uses the concept of blockchain lattice. This creates a blockchain for everyone on the Nano network.
On this network, the transactions are confirmed by Open Representative Voting (ORV), where representatives voted in by members of the network act as validators.
Also, the network allows users to make transactions peer to peer on their own blockchains instead of using their main network blockchain. This helps in cutting down time and energy.
Up next, there is the Hedera Hashgraph. This is another cryptocurrency that has the potential to give a head-on fight to payment processors like Visa. As it has a faster transaction time and uses less energy than Bitcoin.
On this network, the transactions are processed in parallel instead of linearly. This makes the cryptocurrency faster than most cryptocurrencies out there.
The company claims that it can process up to 100,000 transactions per second. Moreover, the makers of Hedera are also using its network to build sustainability projects like their Power Transition energy tracking software.
Of course, there are further ways to reduce the impact of cryptocurrency on the market. For instance, developers can change the code of a blockchain to reduce less power, using solar or other types of powers for cryptocurrency mining, etc.
However, heightened concerns about global warming and pollution also make it imperative to use eco-friendly and sustainable solutions for extracting natural resources. Governments and miners worldwide will have to deploy new technologies and innovations to reduce mining waste, and promote responsible mining practices at every stage of the mining life cycle.