Despite the fact that in cryptocurrency mining maximum efficiency is always sought (this is the best possible performance with minimum consumption), it is undeniable that the electricity consumption of mining farms triggered the production of electricity. , especially in parts of Asia where these farms are already very common. However, even with the home PCs of users who just want to try mining cryptocurrency, it helps to increase consumption and therefore increase the need to produce more and more energy.
Why mining has a great environmental impact
Although mining is a standard mining process for most cryptocurrencies, the exact method varies. For Bitcoin, mining is based on a proof of work algorithm, and to get paid by Bitcoin (BTC) for a block’s mining, you must be the first user to generate such a proof of work. It is a computational task to find the target hash in the block, and while it has the desired effect of inducing mining, it is also damaging to the environment.
This is because miners are advised to spend resources guessing a code in exchange for Bitcoin (although this is applicable to all cryptocurrencies). As only the first user to generate the proof of work is rewarded with the coin, this is a competitive race dominated by the users with the most powerful equipment, which has a double environmental effect. Otherwise, the material used for mining could have been used in consumer equipment, forcing an increase in the production of electronic equipment.
Graphics cards have been particularly affected by this increase in demand. Since 2017, when Bitcoin became a household name, prices have increased alarmingly, making the components unaffordable for most people. Maybe a PC user could have upgraded their system’s GPU, but they were so expensive and rare that they couldn’t do it, so maybe they replaced the whole PC at the square.
The second environmental impact of Bitcoin mining is the use of electricity. Although the entire network requires electricity, mining is the most energy-consuming part of the process; calculations alone would already have a good impact, but when combined with the “winner takes it all” approach, teams work best for long periods of time, which spikes energy use.
The impact of Bitcoin on the environment
To become the first to get proof of work for each block, it is necessary to have a powerful team working to the best of their ability, which generates a lot of heat. This is already a problem in itself, because overheated machines usually fail faster, but at the same time heat the surrounding space. Unless you actively manage the ambient temperature, the components will not perform at peak performance, further reducing the chances of successfully mining a Bitcoin.
To create an ideal environment, you would need an ambient cooling system, which would require the rental or purchase of a specially designed computer space or server room. However, you will need to make sure that you generate enough income to offset these rental, material and power costs. As Bitcoin mining has become more difficult over time, this has benefited those with significant financial backing – that is, those who can make a large initial investment.
Ultimately, mining cryptocurrencies like Bitcoin has a great impact on the environment due to many factors, including consumption and production of electricity, consumption of materials needed for mining, greenhouse effect generated by the air. to cool the farms, and of course the heat generated by the components. Ultimately, cryptocurrency mining is bad for the environment in many ways.
In early 2021, electric vehicle company Tesla invested significant sums in Bitcoin to enable customers to purchase their vehicles using this cryptocurrency. Although it generated a lot of enthusiasm initially, Tesla’s investment in Bitcoin damaged its environmental credentials as a “green” company, and that is what Digicomunist says the Bitcoin network has an annual carbon footprint. of 48.52 Mt of CO2, approximately the carbon footprint of the whole of Bulgaria.