The bitcoin network has a high consumption of electricity, even higher than in many countries, but experts consulted by Europa Press assure that there are ways to reduce it by changing the mining method.
Without going any further, the second best-known cryptocurrency, ethereum, has already moved in this direction and will soon abandon traditional mining. It will change it for the system called ‘proof of stake’, from English proof-of-stake, which will consume 99.5% less.
“The main solution to reduce the energy consumption of cryptocurrencies is to invest and make the transition to more energy efficient mining and consensus mechanisms,” the head of Business Development at South Pole, Mauro Accurso, has highlighted in a statement to Europa Press.
Accurso has pointed out that there are already several blockchain networks with a much lower environmental impact per transaction and has defended that for those that continue to operate with traditional proof-of-work mechanisms of consensus and mining, the long-term solution is to “make sure that the energy they use comes entirely from renewable sources “.
Eurocoinpay adviser, Herminio Fernández, agrees with what Accurso has indicated and has specified, in statements to Europa Press, that the ‘proof-of-stake’ mining does not consume so much electricity because “it does not need such powerful calculation units, they are computers “almost” normal “.
However, while many tokens are adapting to this proof of work, Fernández does not believe that will be the case for bitcoin. “The positive thing about this cryptocurrency is its extreme security and, for that, it needs a brutal computer network,” he stressed.
For the person in charge of Bit2me in Spain, Javier Pastor, the key is not changing the protocol to ‘proof-of-stake’, but the important thing is to check where that energy comes from, and remember that 30% of what is produced globally is wasted.
In addition, he has highlighted to Europa Press that this new way of obtaining cryptocurrencies could be less secure than the one that has been used so far.
According to the Cambridge Center for Alternative Finance (CCAF) at the University of Cambrige, bitcoin represents 0.37% of total electricity production globally and 0.43% of its consumption.
Although at first these figures may seem low, the reality is that the entire network consumes more electricity than Finland, Belgium or Chile, among others. It could also meet the electricity needs of the University of Cambridge for 528 years, among other examples.
Its high consumption is the reason why Tesla stopped accepting cryptocurrency as a payment method, as explained by its CEO, Elon Musk, through a post on Twitter.
“We are concerned about the rapid increase in the use of fossil fuels in bitcoin mining and transactions, especially coal, which has the worst emissions of all of them,” Musk explained on May 13.
In addition, he added that while cryptocurrencies “are a good idea” and have a “promising” future, it cannot be at the cost of having a great cost to the environment.
Although the comparisons are worrying, the director of impact of Portocolom AV, Ana Guzmán, has explained to Europa Press that it is not easy to know how much energy each industry should consume.
“The answer is not easy, and it depends on how the role that cryptocurrencies can play in society is considered,” he pointed out, adding that energy consumption should not be confused with the carbon emissions associated with this consumption.
A recent report by Bank of America recalls that most of the mining takes place in emerging countries, especially in China, which concentrates two thirds of mining globally, although they have just banned both this activity and payment with bitcoin. Far behind are the United States, Russia, Kazakhstan, Malaysia and Iran.
Guzmán highlights that 39% of the energy used for this mining in China comes from hydraulic energy by the mines located in Sichuan and Yunnan, and more than double that used in the USA, according to data from the CCAF.
“As more interest groups are focusing on the high negative impact of cryptocurrency mining on greenhouse gas emissions, more initiatives are being carried out to reduce the negative environmental impact,” said Guzmán, who believes that once the industry matures and in parallel the use of alternative energies to fossils is normalized, their use will be more and more common.
An example of these initiatives is the Crypto Climate Accord, which aims for the industry to reach 100% renewable by 2025 by accelerating the deployment of wind and solar energy.
In addition, they are developing open source software that will allow electricity grid operators, renewables companies and crypto producers to work together to verify the origin of the energy, explains Accurso.
Fernández has made statements to Europa Press that “the community is becoming aware of this issue” and that they estimate that within seven or eight years all the energy consumed in mining will be 100% renewable.
Are cryptocurrencies more polluting than gold?
Cryptocurrencies are sometimes presented as a safe haven alternative to gold and some analysts have even considered them a kind of “digital gold”.
On an environmental level, the head of Next Generation and Economic Research at Julius Baer, Norbert Rücker, explains in a recent report that if the current price of bitcoin is taken into account, buying a cryptocurrency has the same environmental impact as a one-way flight. return from Zurich to Berlin, that is, 200 kilograms of CO2.
On the other hand, buying a gold bar has the same impact as eating a good hamburger or a Swiss cheese fondue, about 10 kilograms of CO2.
Although the balance leans more towards gold according to Julius Baer’s analysis, the situation could change if what is taken into account is the traditional financial system as a whole.
Pastor has defended in this sense that the energy cost of the bitcoin network is measurable because it is known how much the machines used to mine consume, but the impact of the financial system as a whole is impossible to calculate. add that of the companies to which traditional banks lend money.
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