If you’re a frequent bitcoin user, then you’ll be shocked to know that every transaction you make using the cryptocurrency results in the emission of up to nearly 1060 kg of carbon dioxide equivalent.
To put things into perspective, the lifetime carbon footprint of an iPhone adds up to 77.64 kg of CO2 equivalent on average. Unlike real money, bitcoins, or any cryptocurrency for that matter, are virtual assets. This means that there are massive amounts of power consumed and carbons emitted in each bitcoin mining, trading and verification process. Therefore, bitcoins and other cryptocurrencies do not come across as a feasible option for transactions in a world facing climate change-related consequences in the not-so-distant future, despite their obvious benefits over regular currency.
Some ways to mitigate the negative environmental impact of cryptocurrency are:
1) By Using the Alternatives of “Proof-of-Work” Mining
Any cryptocurrency’s decentralized nature is heavily responsible for its gargantuan carbon footprint. That’s because every bitcoin transaction uses computing power from a series of powerful computers and processors. Such computers solve complex calculations for accurate verification during transactions. This way of bitcoin mining involving consensus is known as “proof-of-work.” Choosing a less energy-consuming consensus mechanism, such as “proof-of-stake,” reduces the need for intensive mining and large computing power, thereby minimizing carbon emissions.
2) By Switching to Renewable Energy Sources
Bitcoin operations involve heavy power usage for mining purposes. Using alternative sources of energy for mining operations can reduce the amount of coal that needs to be burned to produce electricity. Additionally, mining operations can be set up in countries where the usage of alternative forms of electricity generation is high. Using alternative forms of energy, such as solar power for running mining operations, drastically reduces the carbon footprint of bitcoin.
3) By Creating Sustainability-Driven Regulations
Governments around the world can make it mandatory for companies involved in bitcoin and cryptocurrency to pay carbon credits or fees for every bitcoin-related transaction. Additionally, governments could provide encouragement to merchants or organizations involved in bitcoin operations for every sustainability-related measure they take.
Various stakeholders involved in bitcoin transactions need to make an effort to reduce the environmental impact of cryptocurrency and achieve the objective of green cryptocurrency. In a similar vein to green AI, the fulfillment of such an objective will make bitcoin easier to implement in the future.
