What to Know About Sustainable Cryptocurrency
As cryptocurrencies grow more mainstream, few financial analysts can deny their real-world benefits for businesses and consumers alike. Contrary to their popularity and value, cryptocurrencies do not offer a perfect solution — many of them currently require dangerous amounts of energy to collect and store. Before energy expenditure gets out of control, we must look towards a sustainability plan.
Bitcoin currently reigns as the crypto golden child. Being the first “mainstream” cryptocurrency allowed it to rise through the ranks and reach a market cap of an astounding $1 trillion. Bitcoin is unique in that it needs to be digitally “mined” from the Internet using dedicated computer processes, and just like mining rare minerals from the earth, the limited supply of this digital currency is one of the features that gives it value. But it is also what makes it such a threat to the environment.
Mining can be extremely harmful to surrounding communities and environments, especially as it gets larger and larger in scale. Bitcoin mining is similar, but the damage comes from the sheer amount of energy needed to maintain the cryptocurrency.
According to the University of Cambridge, Bitcoin mining uses an average of 144.26 TWh per year, which makes up 0.66 percent of the world’s energy consumption. To put that into perspective, Bitcoin mining uses more energy annually than the entire country of Sweden, which consumes an average of 131.80 TWh per year.
Domestic mining centers are dramatically throwing off state and city efforts to reduce energy consumption to meet sustainability goals, and New York City has already proposed a bill that calls for a three-year halt to crypto mining operations while the state assesses their environmental impact.
It is clear that cryptocurrencies are here to stay as more and more digital coins gain traction and new use potentials are found, from NFTs to cheaper international exchange rates. To truly future-proof these currencies, we need to build them around sustainable, responsible energy consumption. Developing a sustainable crypto infrastructure now is much easier than having to restructure the digital market after it has grown exponentially.
Solutions are already in motion, but there is more that needs to be done. The Crypto Climate Accord was recently founded with the goal to power all of the world’s blockchains with 100% renewables by 2025.
Energy Web has also compiled resources for crypto miners who wish to utilize renewable energy for their mining operations or connect with opportunities to offset their carbon expenditure.
And there are steps that you can take as well to help make cryptocurrencies more sustainable. When exploring investment opportunities or deciding on cryptocurrencies you’d like to use, take some time to research which cryptocurrencies are using renewable energy, have committed to carbon offsets, or are investing in green initiatives. A good place to start is this LeafScore list of the 15 most sustainable cryptocurrencies.
Cryptocurrencies possess large transformative potential, but we need to take the initiative now to ensure that digital currencies are built on sustainable infrastructure.
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