Digital currencies are bad for the environment?
There is significant cause to be worried about how digital currencies affect the environment. Some cryptocurrencies use a consensus process to verify and validate transactions, which requires significant computing power and energy. One token, Bitcoin, has grown in popularity and value over time, and big mining operations have formed to capitalize on this trend and control the cryptomining market.
Each of these mining farms takes vast quantities of energy to power the mining rigs, resulting in a total network energy consumption comparable to that of some small countries. However, the environmental effect is heavily influenced by the source of energy used by the mining activities and the impact this has on the power system.
If the mining operations get the majority of their electricity from fossil-fuel-powered grids, the result is extra carbon emissions for an intangible-yet-valuable object whose future and benefits to society are unknown. On the other hand, if mining activities are mostly fueled by renewable energy, their environmental effect is reduced.
Not all cryptocurrencies require energy-intensive mining for validity. Cryptocurrency and blockchain technologies are constantly changing, with some taking attempts to lessen their environmental impact.
Bitcoin mining companies have also bought previously closed fossil fuel facilities to power their operations. This raises additional worries for environmentalists and governments attempting to minimize their carbon footprints over the next few decades.
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