Bitcoin's True Environmental Impact
⏱ Read time: 1.5 minutes
"Bitcoin to the moon!" has been said a lot lately as the value of the currency soared more than 450% between March 2020 and March 2021. I always liked the concept of Bitcoin; it's unregulated by governments and completely digital. If Bitcoin and cryptocurrency doesn't require the printing of paper money, it should contribute very little to carbon emissions. Unfortunately, that's not the case.
Environmental Impact
According to a CNBC article, Bitcoin's carbon emissions are greater than that of The Netherlands. Massive amounts of electricity are required for Bitcoin transactions. Even though Bitcoin seems completely virtual, computer systems work behind the scenes, and that work can emit fossil fuels into the air and worsen the effects of climate change.
However, Bitcoin transactions do not have to use fossil fuels; other clean and renewable energy sources can power it as well, and they actually already do. In 2019, CoinShares estimated that 73% of Bitcoin mining is powered by renewable energy. As clean energy becomes more prominent, this number could increase. Additionally, Bitcoin has the potential to become more efficient and demand less energy in the future.
The Bottom Line
Cryptocurrency needs a lot of electricity to keep up with the demand, but its freedom from regulation along with the potential to become more efficient and use renewable energy outweighs the downsides. It's important to be aware of Bitcoin's emissions if you are interested in owning some. Crypto is a relatively new concept, so we also need to look out for how its emissions change over time.
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