Impact Insider: Bitcoin, The Hidden Cost of Digital Currency

Bitcoin, the first major cryptocurrency, might be digital, but its impact on the environment is very real. Let’s dig into the real cost of this ‘digital gold’.

Bitcoin's energy consumption is shocking, demanding a ton of power and high-end electronics. Mining is where it all starts. Bitcoin miners create new bitcoins and verify transactions by solving complex math problems and puzzles. Sounds simple enough, but this process, called Proof of Work (PoW), requires a lot of electricity.

A recent UN study found that if Bitcoin were a country, its energy requirement would rank 27th in the world, ahead of Pakistan.

And it doesn't stop there. Bitcoin's water usage is unsatiable. Their proof-of-work system, [POW] uses enough water to fill 660,000 Olympic-sized pools and the land footprint is 1.4 times the area of Los Angeles.?

Countries with cheap electricity, like Kazakhstan, become hotspots for Bitcoin mining operations, but this often relies on non-renewable energy sources. In fact, coal accounts for 45% of Bitcoin's energy supply, with renewables like solar and wind only making up a small fraction.

This massive energy usage and reliance on fossil fuels mean that Bitcoin's environmental consumption is anything but virtual.

So, is Green Cryptocurrency possible?

One way to tackle Bitcoin’s huge energy use is by switching to something called Proof of Stake (PoS). Unlike Bitcoin’s Proof of Work (PoW), which needs a ton of power, PoS works differently.

In PoS, instead of using powerful computers, miners "stake" their own coins for a chance to validate transactions. This means they put their own coins up for grabs as a sort of security deposit. The more coins they stake, the better their chances of being chosen to verify transactions. This system cuts down on energy use because it doesn’t rely on high-powered mining rigs – some tokens can even be mined on a phone.

Ethereum, the second-largest cryptocurrency, is making the switch too. Before, an Ethereum transaction used as much electricity as an American household in a week. But with PoS, they’ve been successfully slashing their energy use by over 99%, paving the way for an eco-friendly blockchain.

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Hey Everyone,

Last edition, we uncovered the environmental impact of AI. This week, we’re diving into cryptocurrency e-waste. We’re constantly bombarded with investment trends and tech fads, but no one talks about the hidden costs behind them. With all these ads and new features in tech, it got me thinking: How do we ensure all this innovation doesn’t come at a massive environmental cost?

How do we push for more transparency and ensure our tech doesn’t harm the planet? I’d love to hear your thoughts. Let’s start a conversation.

Catch you in the thread, Kedar

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