Cryptocurrencies have gained massive traction regardless of their abuse origin. They have come a long way from the financial world being skeptical about its implementation due to schools of thought speculating it as a tool for crime. Currently, the cryptocurrency world has extended its branches to the deepest parts of the earth and is on its way to dominating the financial world. Over the years, mainstream cryptocurrencies like Bitcoin and Ethereum have had major growth in their value, general acceptance, and use. However, there are still several debates on the safety of using these cryptocurrencies and how they affect the environment at large.
Principally, the topics of threats on its use are based on how it is obtained; in essence, the mining of cryptocurrencies. The mining process is quite complex. It involves the miners validating and recording transactions with the aim of being rewarded a small bit of the coin. This process is usually after investors carry out trades on platforms like "Trading company".This majorly applies to bitcoin mining. However, mining other cryptocurrencies mostly follows this same principle. Because these mining operations are carried out with powerful computers and for long hours, they consume quite an astronomical amount of energy. These high energy costs are because of the POW blockchain level of competitiveness. This is because the account balances of the cryptocurrency users all over the world are not stored in a single database, they are distributed among an interconnected network of miners and these individuals are rewarded for this duty. These miners also make use of large computational power to solve complex maths. This is the entire concept of decentralization in the world of cryptocurrencies. Several schools of thought are in agreement that this system is far safer than a centralized system due to the unavailability of a single controlling party. As such there can not be a single point failure at any time. However, this doesn't negate the fact that the large chunks of power have an effect on the environment.
A major concern on the topic of mining is its declining efficiency as the prices of cryptocurrencies increase. Taking Bitcoin as an example, the mathematical equations that are to be solved in the mining process become more difficult as the price climbs up. However, the transactional process remains the same. The implication of this is that in the future, the Bitcoin code app network will consume an increased amount of computing power to carry out the same number of operations.
One of the major problems linked to the mining process is fossil fuels. The link between fossil fuels and cryptocurrency is a concept many investors are yet. According to studies from the University of Cambridge, a large percentage of Bitcoin mining is done in China. China is also a country that gets a large portion of its electricity from burning coal. Coal is just one of the many variants of fossil fuel and this makes up a large portion of where several countries get most of their electricity. This is not just for cryptocurrency mining alone but also for other operations in society. The downside to this is that burning coal plays a major part in significant negative climate changes due to the release of carbon dioxide from the process. Reports from CNBC states that Bitcoin mining alone accounts for over 35 million tons annually. Considering the extensive damage this does to the environment and mankind in general, this is a major concern for the world.
The world is constantly changing and innovations in technology are leaning towards a shift from the traditional mining process to one that is less damaging to the environment.
