Can Crypto Mining Go Green? What Do The Scientists Have To Say?

by | Mar 28, 2023 | Green Investments

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What is Crypto Mining?

Crypto Mining is the process of creating new Bitcoin and other cryptocurrencies and verifying transactions involving those coins. It involves vast, distributed networks of computers that check and secure blockchains, which are digital ledgers that record cryptocurrency transactions. In this article, we will talk about Can Crypto Mining go green? What does the scientist have to say? But before that, let us learn about crypto mining.

For using their computing power, computers on the network are rewarded with new coins. The blockchain pays coins for maintaining network security, and the coins incentivize miners to maintain network security.

The two objectives of cryptocurrency mining are to create a new cryptocurrency and to confirm the validity of already-completed blockchain transactions involving cryptocurrency.

A miner is paid once a block of transactions has been confirmed.

What are the Types of Crypto Mining?

Depending on the type of method, crypto mining can be divided into three types:

1. Individual or Solo Mining

With no pool participation, autonomous mining is on your hardware. In this scenario, you are entitled to a profit that includes all the coins you have mined and transaction fees. For solo mining, equipment power is crucial since a high hash rate is needed to maintain the computational complexity. Mining relatively new cryptocurrencies are advantageous when done alone.

2. Collective Mining

A pool is a server that combines the computing resources of several miners. It is a shared computing network that creates new blocks. According to each miner’s contribution to the process, the coins are distributed among them. Due to the growing network complexity of well-known cryptocurrencies, pooling has become necessary.

3. Cloud Mining

In this case, you rent computer power from a service that mines itself on an industrial scale instead of the previous two mining techniques, which employ their equipment. In this situation, you are not required to establish and maintain your farms. You can acquire the money mined while using industrial-grade crypto-mining equipment and paying for someone else’s electricity. You may participate in production without making significant investments thanks to cloud mining.

Can Crypto Mining Go Green? What Do The Scientists Have To Say?

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The carbon footprint of cryptocurrencies must be calculated more intricately. Although most nations where cryptocurrencies are mined use fossil fuels as their primary energy source, miners must look for the least expensive energy sources to stay profitable.

According to Digiconomist, Turkmenistan produces the same amount of carbon dioxide per year as the Bitcoin network, or around 73 million tonnes.

According to data up until September 2022, Ethereum generated an estimated 35.4 million tonnes of carbon dioxide emissions before switching to proof of work, when those emissions decreased to 0.01 million tonnes.

New techniques that lessen the environmental impact of blockchain technology are the foundation of emerging green cryptocurrencies. In search of solutions for increased sustainability, many of these elements can also be applied to current cryptocurrencies, which are more environmentally damaging. This is the case with Ethereum, the platform that powers the majority of non-fungible tokens (NFT), which intends to use a Proof-of-Stake (PoS) consensus method to cut its energy consumption by 99.5%.

Although it is challenging to incorporate sustainability into the difficult trade-off that cryptocurrencies seek between decentralization, security, and scalability, experts and scientists provide some tips for greening a cryptocurrency:

1. Making The Switch To Renewable Energy

Correcting the carbon emissions estimates produced by the cryptocurrency industry is a logical first step. Less than 40% of the bitcoins mined in 2021 validated by Proof of Work were done using renewable energy. This is why many startups have appeared with various solutions to close this gap.

Mining powered by Hydroelectric Energy: Crypto mining has been significantly influenced by hydroelectric power, particularly in China and Canada. Both can provide preferential electricity prices to enterprises close to certain hydroelectric dams. The most current study from CoinShares on the global mining environment, published at the end of 2019, states that 73% of Bitcoin mining operations worldwide use renewable energy sources.

Furthermore, according to the report, most miners are still concentrated in areas with inexpensive hydroelectric electricity. The survey reveals that most mining operators are using green energy, which contradicts numerous media headlines from the past regarding the impact that cryptocurrency mining has on the environment. Also, using specific mining-related resources directly addresses the issue of excess or unused energy produced by hydroelectric power plants.

Mining powered by Solar Energy: In the future, another essential factor to consider is using green and renewable energy sources, which have been a focus in crypto mining communities. The obvious question is whether it makes more financial sense to power mines with electricity generated by solar farms or to sell it to power networks.

The founder of the Stockholm-based exchange BTCX, Christian Ander, who came to this conclusion in 2018, was contacted by Cointelegraph. As Ander explains, green energy producers can now generate income through bitcoin mining instead of connecting to or contributing to conventional electricity systems.

2. Proof of Work followed by Proof of Participation

To participate in a lottery where they can choose which transactions to validate, miners must advance a tiny sum of cryptocurrency under the Proof-of-Stake (PoS) consensus method. Removing the competitive computational component of Proof-of-Work reduces the likelihood that they may approve fraudulent transactions while enabling each computer to focus on a separate issue and maximizing the amount of energy used.

3. Pre-Mining Integration

Pre-mining operates like fiat money or stock: a central authority manufactures a specific quantity of the good in question, in this case, cryptocurrencies, and disperses it through the global and commercial environment. With these systems, users involved in the transaction might need to pay them a small fee to reimburse them for their labor. However, transactions are still confirmed by a decentralized network of miners before being published to the blockchain registry.

4. The Introduction of Carbon Credits

Using state carbon credits by crypto mining businesses may result in their purchasing carbon credits from other companies, assisting in reducing world emissions or converting to greener energy to market their credits.

To Conclude

Specific cryptocurrencies require a lot of energy, specialized equipment, and garbage to operate. In that regard, some are not ecologically friendly; nonetheless, it’s crucial to consider the environmental costs of extracting natural resources and using energy and power to produce and sustain fiat currency and our present banking system. It is doubtful that cryptocurrencies would minimize their energy footprint because the validation process is competitive, energy-intensive, and rewards-based. The network will still need a lot of electricity to validate transactions after the last bitcoin is awarded.

Based on the current state of technology and the available evidence, it is clear that crypto mining can indeed go green. While traditional mining operations have relied heavily on non-renewable sources of energy, advancements in renewable energy technologies and the increasing availability of sustainable energy sources have made it possible for mining operations to operate more sustainably.

Moreover, various initiatives and efforts by industry stakeholders, governments, and communities are underway to promote and encourage the adoption of renewable energy sources in the crypto-mining sector. These initiatives include the use of carbon credits and the development of renewable energy-powered mining facilities, among others.

However, it should be noted that the transition to green crypto mining will require significant investments and technological advancements. Additionally, it will require collaboration and commitment from all stakeholders, including miners, energy providers, regulators, and consumers.

In conclusion, while there are challenges to overcome, the potential for sustainable crypto mining is within reach. By leveraging the latest technologies and working together to promote sustainable practices, we can achieve a more environmentally-friendly and socially responsible crypto-mining industry.

 

Author

  • Dr. Tanushree Kain

    Tanushree is a passionate Environmentalist with a Doctorate in Environmental Sciences. She is also a Gold medalist in Master of Science (M.Sc), Environmental Sciences. She has 6 years of experience as a guest faculty in Environmental Sciences. With her combination of technical knowledge and research expertise, she can create clear, accurate, and engaging content that helps users get the maximum information regarding environmental topics.

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