Green Mining to Increase the Sustainability of Crypto Industry

Looking into the data released by Statista in August 2023, there were 9,321 existing cryptocurrencies at the time. Over the years, the process of creating cryptocurrencies has become less-difficult.

The creation of so many cryptocurrencies and the increase in adoption have brought about a boom in the total energy consumption by the industry. Hence, many organizations and individuals have highlighted the impacts of crypto mining and trading on the environment.

It aims to be a objective to develop eco-friendly methods to create and develop cryptocurrencies, by closely observing and keeping a watch on climate change and environmental damage.

Cryptocurrency Mining and Its Working

Crypto mining with the PoW mechanism consumes energy in significant amounts. The process of mining involves millions of computing machines racing to solve complex problems.

For instance, in Bitcoin mining, the successful computer or mining machine gets a reward in Bitcoin for problem-solving in terms of Bitcoin. It also verifies the underlying blockchain. If the reward is high, bitcoin miners try to use more and faster mining machines to increase their chances of winning rewards. With an increase in the number of machines, the difficulty in computation also increases, leading to a greater consumption of energy.

Environmental Concerns Around Cryptocurrency

The inefficient use of power for the creation of Bitcoin will grow into an elaborative risk to the planet. Bitcoin mining produces 114 million metric tons of carbon dioxide each year. Moreover, most of the Bitcoin mining facilities are located in regions heavily dependent on coal-based energy generation.

35% of Bitcoin mining activities occur in the USA and 18% in Kazakhstan. Both of these locations are heavily dependent on the use of fossil fuels.

In May 2021, China banned crypto mining, leading to approximately 50% of global miners being forced to drop out of the crypto community. 

Creation of More Environmentally Friendly Bitcoin Mining Activities

The crypto community has started seeking ways to reduce its carbon footprint on the surroundings via crypto mining activities. 

Sustainable Energy Production

Efforts are increasing to move towards more environmentally-friendly options that are away from fossil fuels. As a result, more than 50% of American Bitcoin mining activities rely on renewable sources of energy. This has attracted miners from other countries to the USA.

Rise of Altcoins

Investments that go beyond Bitcoin have led to the creation of more environmentally friendly cryptocurrencies. Litecoins, for example, require only a quarter of the total time needed to mine Bitcoin. 

SolarCoin is a new crypto asset that allocates coins for every megawatt hour produced by solar technology. Furthermore, Ethereum 2.0 sought to completely eliminate the mining required to make Ethereum’s blockchain work.

Technology Innovation

Apart from relying on renewable power sources and growing alternate coins, power-saving technologies are also being evolved.

Liquid Immersion Cooling: With this method, mining gadget is submerged in a non-conductive liquid. It helps in the removal of heat with minimal energy consumption. It further extends the lifespan of the device.

Energy-Efficient Mining Algorithms: Some of the cryptocurrencies created using less power-intensive mining algorithms. This includes PoS (proof of stake) and PoA (proof of authority). These require significantly less energy consumption than PoW mechanisms.

Energy Recapture Technologies: These technologies capture and utilize heat generated from mining operations, which can help maximize energy efficiency. It converts waste energy into usable energy for other purposes.

Regulators Outlook

Local and state officials can set limits on permissible pollution and noise and ensure that they are not utilizing dollars of economic development on false promises such as revenue. Governments need to develop careful zoning codes. Local governments are required to safeguard the tariffs paid by existing payers.

Utility regulators can influence power purchase agreements, establish protective electricity rates or establish system benefit charges to ensure that mining operations do not harm assets that are required for mining. These activities should not increase the cost of electricity for existing users.

Environmental regulators should consider strict regulations to minimize the local health and environmental impacts of crypto mining operations in the places where local communities are residing.

Summary: Future of Green Mining

It is essential to result in a reduction of the impact of crypto-mining on the environment. This may be done by encouraging the usage of cleaner energy and reducing the use of fossil fuels. The boom of the crypto industry ought to not damage environment in an effort to ensure sustainability.

FAQs

Which country has banned crypto mining?

China was the first country to ban crypto mining through non-renewable energy sources.

What are the top countries that have adopted green mining?

The list of countries that have adopted green crypto mining include USA, China, Kazakhstan, Canada, Russia, Germany, Malaysia, Ireland, Singapore, and Thailand.

With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.