The Environmental Impact of Cryptocurrency
Huge investments have been made in the cryptocurrency industry as a result of the remarkable increase in cryptocurrency prices over the past ten years. From big businesses and tech millionaires to criminals, money launderers, and sanction busters, digital currencies have gained the trust of the world's leading investors. Blockchain and other technology advancements have made digital currencies a sophisticated component of the contemporary global financial system. The strongest currencies in the world are allegedly in danger of collapsing.
The cryptocurrency market boom is like the gold rush. However, there is a secret negative aspect to this fascinating business. According to studies by United Nations scientists, mining cryptocurrency can have significant environmental effects on the land, water, and climate. The mining of Bitcoin is heavily reliant on fossil fuels worldwide.
The global Bitcoin mining network used 173.42 Terawatt hours of electricity in 2020–2021, according to study findings published by the United Nations University and Earth’s Future journal. Accordingly, if Bitcoin were a nation, its energy usage would have been 27th in the world, more than that of a nation like Pakistan, which has a population of over 230 million. The carbon footprint that resulted was comparable to running 190 natural gas-fired power units or burning 84 billion pounds of coal. 3.9 billion trees, or about the size of the Netherlands or Denmark, or 7% of the Amazon rainforest, to be planted in order to make up for this imprint.
The water footprint of Bitcoin at this time was comparable to that needed to fill more than 660,000 Olympic-sized swimming pools, which is sufficient to cover the present-day domestic water needs of approximately 300 million people in rural sub-Saharan Africa. During this time, the global footprint of Bitcoin mining operations was 1.4 times larger than Los Angeles.
There are significant financial incentives for Bitcoin mining, which is largely dependent on non-renewable energy sources, in nations with low electricity costs, such as Kazakhstan, where electricity is three times less expensive than in the US.
The UN experts offer a variety of suggestions for potential government actions to track and lessen the negative effects of cryptocurrencies on the environment. Additionally, they advise investing in alternative digital currencies that are less detrimental to the environment and more energy-efficient. The study also highlights the effects of cryptocurrency mining on people across borders and generations. Rapid technology advancements and regulatory action are required to lessen the negative environmental effects of the quickly expanding digital currency industry.
Bibliography
Chamanara, S. & Madani, K. (2023). The Hidden Environmental Cost of Cryptocurrency: How Bitcoin Mining Impacts Climate, Water and Land, United Nations University Institute for Water, Environment and Health (UNU-INWEH), Hamilton, Ontario, Canada, https://inweh.unu.edu/
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