Cryptocurrencies like Bitcoin have undoubtedly changed the way monetary transactions are performed today. The decentralised wonder originated by blockchain technology has now emerged as a major crypto investment. Even though Bitcoin has reached heights of popularity, Bitcoin energy efficiency is still controversial. You’d be surprised to know that every single Bitcoin transaction gulps down $100 worth of electricity, and it becomes challenging to fight the energy crisis caused by crypto mining in such a case. Here in this article, you can find a few ways to tackle the massive energy consumption of crypto mining. Read on to know.
Switching to Proof Of Stake Mining Method
The coins have to be unlocked by solving complicated puzzles and mathematical problems to perform a crypto transaction. Cryptocurrency mining uses the Proof of Work method to solve those complicated problems.
Hal Finney introduced the concept in 2004 with the help of ‘reusable Proof of Work’ that uses the SHA-256 hash algorithm. The Proof of Work method is infamous for using lots of energy to complete itself. There was a need for a better algorithm to validate the transactions. That is when the Proof of Stake and Proof of Authority methods come into the picture.
Proof of Stake is a promising mining alternative that could help minimise the use of the Proof of Stake method. The method works on the effectiveness of the coin, which requires comparatively less computing power to solve problems. The energy consumption is way lesser than the Proof of Work method.
Use renewable energy sources
Bitcoin mining uses 69.85 TWh of electricity per year which is outrageous. As the primary energy sources that use fossil fuels and coal, the CO2 emissions are always off the charts. This is the reason why Tesla stopped taking Bitcoin as payment for their cars. Such enormous power consumption creates a need to switch to alternative power sources like renewable energy. Renewable energy sources like solar and air can provide the necessary energy for crypto mining.
The majority of crypto farms around the world work on hydropower. Countries with established renewable energy infrastructure can subsidise the crypto farms to switch renewable energy sources. It would be a significant step to reduce the CO2 emissions of crypto mining while helping to reduce the carbon footprint.
Encourage crypto mining companies to partake in CSR activities
Creating new environmental regulations specifically for crypto mining companies can help compensate for the enormous energy consumption. The governments can make it mandatory for crypto mining companies to participate in Corporate Social Responsibility (CSR) activities to encourage social responsibility.
The companies can host environmental awareness programs and support local environmental organisations, NGOs and communities by providing the essential resources. The companies can use their global presence to create more awareness about crypto mining energy consumption and achieve Bitcoin energy efficiency by encouraging other companies to do the same.
Compensate for the damage
Mining companies can help reduce the effects of CO2 emissions by compensating for their damage. The heat produced by the mining rigs can keep the homes in local communities warm. Migrating to colder regions can also help reduce the need for cooling infrastructure that uses a lot of energy at mining farms. Mining companies can also initiate reforestation and plantation drives to encourage forestations and play a significant role in reversing the effects of CO2 emissions. Though crypto mining has a promising future, it’s crucial to be aware of its environmental effects and take necessary actions to reduce those effects.