Green crypto: Gaining acceptance a work in progress

As the urgency of climate change ramps up, focus is increasing on digital currencies to address their environmental impact.

According to industry forecasts, the global cryptocurrency market is expected to surge to $4.94 billion by 2030. But the process of mining digital currencies such as Bitcoin requires immense computational power – causing a significant drain on energy resources.

“Miners” use sophisticated hardware to solve complex mathematical puzzles, securing transactions and minting new coins. But this process, known as “proof of work” (PoW), is energy intensive.

Imagine a giant lock with a million combinations. Miners are all competing to find the right combination to unlock the block (a group of transactions) and earn rewards. The more computing power you have, the faster you can try different combinations.

But this computing power requires a lot of energy, similar to how a powerful car uses more petrol. So, miners are using massive amounts of electricity to run super-powered computers 24/7.

In 2021, police in the United Kingdom raided an industrial unit, suspecting that it was housing an indoor marijuana growing operation. They were surprised to discover instead an extensive Bitcoin mining setup that was illegally siphoning electricity from a mains supply.

In 2021, Bitcoin mining consumed enough energy to rank 27th among nations, ahead of Pakistan with a population of over 230 million people. Just a year later, Bitcoin’s energy usage surpassed Finland’s national power consumption.

Alternatives have emerged to address the rampant energy consumption of cryptocurrency mining. But the question is, are these green currencies a viable alternative to the traditional options?

The emergence of green cryptocurrencies

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