The Environmental Impact of Cryptocurrency 

Written by: Mary McCarthy

The rise of cryptocurrency and digital assets over the past few years has opened the door to concerns about the potential environmental impact of cryptocurrency. 

Mining cryptocurrencies uses a significant amount of energy, with Bitcoin being the largest consumer in the world of digital currency. Many digital assets produce e-waste and carbon emissions. As financial portfolios evolve, it is more important than ever to make informed decisions about your personal finances.  

The energy consumption required to mine cryptocurrencies that require proof-of-work may ultimately increase carbon emissions and impact climate change. As reported by the BBC, it is estimated that Bitcoin alone uses more energy per year than the entire country of Argentina. 

Bitcoin appears to be the main offender because it is the most valuable cryptocurrency. As the value of crypto rises, the carbon footprint produced by the cryptocurrency will also rise. Per Mr. Rauch’s for the BBC, “it is really by design that Bitcoin consumes that much electricity. This is not something that will change in the future unless the Bitcoin price is going to significantly go down”.  

Ideally, cryptocurrency would be powered by renewable energy sources. Unfortunately, this is not always the case: China is the leading Bitcoin consumer, and the primary energy source used in the region is coal. According to a study conducted by Cambridge University, as much as 65% of Bitcoin mining occurs in China.  

Many cryptocurrencies are sustained without mining and without contributing any significant carbon emissions to the globe. In 2021, choosing to diversify your assets includes learning about digital assets and the potential unseen costs behind them.  

Sources: 

2021, 17 M. (2021, June 3). Which cryptocurrency is the most environmentally friendly? TRG Datacenters. https://www.trgdatacenters.com/most-environment-friendly-cryptocurrencies/.  

Bitcoin Mining Map. Cambridge Bitcoin Electricity Consumption Index (CBECI). (n.d.). https://cbeci.org/mining_map.  

Reiff, N. (2021, May 19). What’s the Environmental Impact of Cryptocurrency? Investopedia. https://www.investopedia.com/tech/whats-environmental-impact-cryptocurrency/.  

Criddle, C. (2021, February 10). Bitcoin consumes ‘more electricity than Argentina.’ BBC News. https://www.bbc.com/news/technology-56012952.

News | Uncategorized

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