Bitcoin has a market cap of over $1 trillion. What started as a single tech nerd’s cryptographic project has turned into one of the most desired and valuable assets of the 21st century. Across the world, countless data centers sit whirring away, mining the precious crypto coins all day and all night, generating potential millions for their owners.
But as we all know, nothing’s free. What’s the true cost of those huge server farms? Do the environmental impacts of Bitcoin outweigh the value it generates? And is there a way to mitigate that harm?
Join us as we explore the latest Bitcoin news regarding the environment.
Why does bitcoin have an environmental impact?
It can sometimes be hard for people to connect the dots between Bitcoin value and the environment. After all, Bitcoin is totally digital, right? It’s not like you have to cut down trees to make paper for notes, as with fiat currency.
And even if you do realize all this computing has an energy cost, it’s not immediately clear why it’s different from the energy cost of any other frivolous technology like game consoles or televisions.
To get to the bottom of this, you have to understand how Bitcoin works. Bitcoin is a huge, decentralized system that’s kept in operation by so-called ‘miners’, who put their computers to work doing really complex math in order to verify transactions on the Bitcoin network. If you’ve ever sent or received a Bitcoin, you have miners to thank for the completed transaction.
The problem is, that math is crazy hard, and only getting harder. This is why miners nowadays often run entire server farms dedicated solely to Bitcoin mining. You have to do a lot of computing to solve the math at this point.
And all that computing takes an equally sizable amount of energy. Thus, the eco-impact.
Is bitcoin’s environmental impact improving?
The good news is, recent developments in Bitcoin and the energy sector mean Bitcoin is a bit greener than it used to be. China’s ban on Bitcoin had an impact on Bitcoin price, true, but it also meant miners scrambled to relocate. The places they went to? The ones with cheap energy.
And the places with cheap energy tend to be placed with renewable energy. That can only mean good things for Bitcoin’s long-term environmental impact. In the future, people might choose between a bank or Bitcoin based on the latter’s better eco-credentials, per this from www.bytefederal.com!
So there you have it, a quick guide to why Bitcoin can have a negative environmental impact and a quick guide as to why it doesn’t have to. As the world transitions faster and faster over to green, renewable sources of energy, the negative impacts of Bitcoin mining will diminish faster, too.
So let’s get out there and install some solar panels!
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