How mining of cryptocurrencies bad to planet?

Tesla CEO Elon Musk said that Tesla would no longer accept Bitcoin payments because of environmental issues. The issue is that all these computer farms working overtime to mine Bitcoin use up a lot of real-world energy. 

Had he invested in Bitcoin without knowing the truth of Bitcoin mining consumes a lot of energy? China was cracking down on cryptocurrency mining once again. China's Qinghai became at least the third province in the nation taking steps to curb cryptocurrency mining operations due to environmental concerns, barring local officials from setting up or permitting crypto-mining projects.

Bitcoin works based on a process called Mining. It is not possible to trace and add new blocks by doing calculations on one node or two nodes in the mining process. Many people are involved in cryptocurrency mining which needs to consume more and more electricity. Mining has consumed 200K pounds worth of electricity for every 10 minutes which is about 2.5 times the energy use per year of Amazon, Apple, Facebook, Microsoft and Google combined. Bitcoin miners argue that a lot of bitcoin’s electricity comes from renewable resources. As per the Cambridge University study, 39% of the electricity used by the Bitcoin network is renewable and remaining 61% used from fossil fuels.

Impact on Environment

In November 2020, Black Sea territory of Abkhazia was hit by a series of rolling blackouts caused by a spike in demand for power. Cryptocurrency mining was unlikely blamed for sudden blackout in the region for non-stop running of computers for digital currency. That forced the government to impose a ban on crypto mining in Abkhazia. Decentralized digital currency is worth it with relatively less energy cost. There are growing attempts in the cryptocurrency industry to mitigate the environmental loss of mining and the entrance of big corporations into the crypto market could boost incentives to produce "green Bitcoin" using renewable energy.

How big is cryptocurrency carbon footprint?

It is very difficult to calculate the carbon footprint during the process of mining and proof-of-work of any cryptocurrency. Even then energy consumption itself doesn’t give an accurate carbon footprint. Each mining power house emits different amounts of carbon to produce the same amount of energy. Before you want to know the carbon footprint, one should need to know how the mining is getting energy. Emission of carbon footprint differs from Hydro to wind to coal in mining. Obviously, Bitcoin has the largest share even in emission of carbon dioxide. As per 2019 study, Bitcoin production is estimated to generate between 22 and 22.9 million metric tons of carbon dioxide emissions a year.

Companies and organizations should think of alternate methods to reduce carbon footprint in mining of cryptocurrencies. They are using more power and energy for doing calculations during their mining process.

Proof-of-Stake (PoS): It was created as a replacement for Proof-of-Work (POW). Proof-of-Stake gives mining power based on the percentage of coins held by miners whereas Proof-of-Work needs huge amounts of energy. PoS is definitely a perfect alternative to PoW. PoS allocate blocks based on distribution of wealth rather than computational power that causes carbon footprint. Ethereum is already working on to switch over to Proof-of-Stake from Proof-of-Work.

Ditch Fossil Fuels: Miners should go for renewables instead of fossil fuels for their mining. Some governments offer cheap reliable power provided by fossil fuel. Miners negotiate directly with power plants for a cheap price. Having a demand for fossil fuel energy, some of the closed companies also started their operations for miners. 

If the companies work for the development of “Green” crypto, the governments will encourage the digital industry with possible incentives and environment also should protected.