When new technologies emerge, they are often hazardous to the environment, simply because when a prototype for a new technology is designed, environmental efficiency may not always be at the fore of the designers and developers minds – they just want to get their product finished, no matter what the cost.
Bitcoin is no exception to this. Bitcoin is a powerful tool, one that promises to reshape the financial industry, indeed, it’s already made steady progress toward doing this. Bitcoin is a store of value that can be used to transfer funds, hold funds and even make money through investment. Bitcoin, aims to create a totally cashless society that no longer needs to rely on banks to operate. With Bitcoin, society is financially free.
It sounds great, doesn’t it, but before you get too excited, you need to consider the environmental impact of this. Okay, in it’s essence, Bitcoin itself is not harmful to the environment, however the production of Bitcoin is very resource heavy and requires huge amounts of computing power, usually hosted within mining farms and facilities. These farms use numerous super-computers to carry out calculations that in turn lead to the mining of Bitcoin. The calculations require huge amounts of energy to process and therefore, they require a lot of electricity and power to run. Often, this power is created by non-renewable means, for example the burning of fossil fuels at power stations.
More Bitcoin means a bigger power output, which means a larger carbon footprint and ultimately, more harm to the environment. So, is Bitcoin leading us to an environmental crisis?
Probably not. We have to remember that FIAT currency also produces a large carbon footprint too, not to mention the damage done by the mining of metals to produce coins and of course, the damage that creating paper notes causes too, however more does need to be done to steer Bitcoin in the right direction here. Currencies such as Bitcoin Green exist to attempt to alleviate some of Bitcoins environmental impact, though even this isn’t enough. The entire community needs to do more to make sure Bitcoin cleans up it’s act. Investors, traders and miners need to make the effort to reduce their own carbon footprints and need to do more to educate themselves on the environmental impact of Bitcoin and blockchain technology.
It’s not all doom and gloom, remember, this is a new technology and a new movement, over time, environmental efficiency will approve and thus, the damage done by Bitcoin may start to reverse itself. Bitcoin might not be green at the moment, but in a few years time, in a more crypto-adoptive world, Bitcoin could truly become a friend of the earth too.