As a few years go by, non-fungible tokens (NFTs) along with cryptocurrencies experienced a tremendous increase in popularity. Originally, the mining for digitized money, for example, Bitcoin, had begun back in 2009 when Satoshi Nakamoto came up with the idea through a white paper. However, all the trades occurring on different crypto exchanges and the majority of the sales for NFTs went through an increment in numbers during the pandemic. Although, one notable fact in all of this is that an increase in usage, adoption and trade in NFTs and cryptos comes with an increase in the usage of energy, adverse environmental effects, and sustainability concerns.
With the increase in value of Bitcoin, crypto becomes more and more mainstream which leads to the production of excessive carbon footprint. It was not long ago when Elon Musk declared that Tesla is putting a halt to allowing btc payments for its electric vehicles because of the damaging impacts of fossil fuels on the environment during bitcoin mining. This big step was thoroughly applauded by the ‘pro-green’ community as it sheds light on how severe this issue has become in recent times. It has become imperative for the crypto world to acknowledge this issue.
As of recently, the market cap of bitcoin has reached nearly $1 trillion. With major companies such as PayPal, Visa, and Square willing to invest billions in this field, all the contributors of the market must wisely lead towards a plan to lessen its devastating environmental impacts. More demand for the daily use of crypto consequently increases the energy usage amongst the mining operators.
Energy consumption is a constant concern
A lot of money is at stake in the crypto market. As it has been established that both NFTs and cryptocurrencies depend entirely on blockchain technology, which is an independent public digitized ledger used to keep track and record all the information about every computer present on the network. In addition to this, new bitcoins and numerous cryptocurrencies are minted later on as the computers manage to fix the issue of solving complex math puzzles which are referred to as “hashing algorithms.”
On top of these defects for Bitcoin, ether, and many digitized cryptocurrencies, miners are to keep a constant eye observing the amount of energy that is being used to power, cool, and record every computer equipment. The majority of this energy is available through fossil fuels sources at the cheapest price. Although digitized cryptocurrency does not take more than a fraction of global transactions, the amount of energy that they consume has taken a toll and is leading to bigger problems.
The latest research shows that all the machines that are put towards mining bitcoin all over the world roughly takes up power equivalent to the power consumption in Bangladesh with a population up to 160 million people. Furthermore, The Cambridge Bitcoin Electricity Consumption Index approximately calculates that crypto utilizes more energy as compared to Sweden and Malaysia.
Sustainability efforts in the industry
There is no doubt in the fact that crypto is going to be around for a long time and there is no point to debate about it anymore. It has proven to show numerous advantages for businesses and consumers such as quicker, more trustworthy, and low-priced transactions which include more transparency. Moreover, crypto trading is widely practiced throughout the world. People use trading platforms, like bitiqapp.com to initiate their trading careers in this field. The high profit potential of crypto trading is attracting more and more people to explore the new ecosystem. However, with the expansion of the industry, sustainability must be at the core.
Contributors for the crypto market must all work as one cohesive unit to acknowledge a future that involves clean and recyclable energy. Not long ago, the Crypto Climate Accord (CCA) had released around forty supporters or more, which included World Economic Forum, Ripple, Rocky Mountain Institute, Energy Web Foundation, and ConsenSys, and had set a target to achieve enabling every blockchain to be run by 100% renewable energy in the next five years or so.
There are a few members of the crypto community who are on the lookout to find renewable energy resources, however, the major industries still need to cover a lot of aspects. Statistically speaking, around 76% of hasher believe that they are helping out by using renewable energy to run their transactions but this is anything but the case. Only 39% of the total energy consumption is collected from renewables.
To make an actual change, the crypto world should brainstorm new methods and technology that inculcates transparency so that they can measure the consumption of renewables and generate renewable energy at a lesser cost to accommodate the miners. CCA has begun its search for such a method, and for crypto to stay relevant to the global economic structure, it is essential that the industry finds a more sustainable way to support its operations.