Is Cryptocurrency fuelling Climate Change?
What on earth does Cryptocurrency have to do with climate change? A great deal, actually. As mining, trading and advertising Cryptocurrency takes place exclusively online, there’s bound to be a lot of excess digital carbon produced as a result.
Here we’ll explore how Cryptocurrency could fuel climate change, and some steps you can take to minimise your digital carbon footprint.
Whenever you complete any action online, you’ll require power (electricity) and a wireless or wired internet connection.
You may not consider the electricity and wireless signals that power your internet experiences, but they create carbon in the same way that offline activities do. If you think about the plumes of smoke that emanate from a factory chimney, you could imagine your laptop or computer emitting invisible smoke every time you log on.
The problem with excess carbon is that it gets trapped in the earth’s atmosphere – it can’t escape. As it builds up, the temperature on earth increases and we see the effects of climate change; unsettled weather patterns, melting polar ice caps and the decimation of natural wildlife.
An estimated 106 million people are using Cryptocurrencies around the world, according to Business Insider. What’s really interesting about these users is that they’re quite evenly distributed by age.
There’s huge uptake from young millennials who are tech savvy and able to understand the technical aspects involved in mining Crypto. More recently though, there’s an older demographic getting involved.
A survey from financial advisory group deVere found 70% of its clients aged over 55 had already invested in digital currencies, or were planning to do so, in 2021, despite bitcoin and others being strongly associated with younger, millennial investors.
With all these people spending vast amounts of time online, mining and trading Cryptocurrencies around the world, the natural consequence is a lot of digital pollution.
The process of mining Cryptocurrency is a labour intensive and time consuming endeavour. Just this week, news broke that El Salvador became the first nation to authorise Bitcoin as legal tender. Not only that, but the North American country plans to use geothermal energy from the country’s volcanoes to mine for the currency using cleaner, cheaper electricity. Who says money doesn’t grow on volcanoes?
Cryptocurrency miners need a lot of computing power to mine successfully. They require a high “hash rate,” which is measured in terms of megahashes per second (MH/s), gigahashes per second (GH/s), and terahashes per second (TH/s).
If you engage in the process of mining, be aware of how much time you spend online and make sure you limit your use. If you want to be more carbon conscious, it’s also worth investing in the fastest and most up to date computer you can afford. The faster your system, the more efficient it’ll be, which in turn means you’ll consume less energy.
Cryptocurrency markets are decentralised, so they are not issued or backed by a central authority like a government. Instead, they run across a network of computers and can be bought and sold via exchanges and stored in digital wallets.
The entire process of buying and selling Crypto happens online and it always requires a strong network connection to facilitate the process. Also, because Cryptocurrency trading is a community-based activity, there’s a great deal of sharing and communication involved.
Sometimes, users need to post on social media channels like Twitter to make them eligible for certain ‘limited edition’ currencies. This means more energy and connection is required to access the social media platform.
Can you see how big and intense the digital demand is? What do all of these actions have in common? They create carbon.
The first step is to do your research and understand more about digital carbon and how this contributes to climate change. Many people believe that by switching from offline to online practices, they’re automatically doing good for the planet. This is true to some degree; digitising processes can make them more efficient and less wasteful than their offline counterparts.
But digital consumption produces carbon in the same way that offline activities do, so we need to be carbon conscious whenever we use our laptops, mobiles and the internet.
If you’re involved in mining or trading of Cryptocurrency, here are a few immediate actions you can take to minimise your digital carbon footprint;
- Limit your online use to a few hours per day
- When you’re not using your laptop, switch it off
- Disconnect your laptop from its power source once it’s fully charged
- Choose a utility company that offers renewable energy sources to power your devices
- Switch to an energy conscious broadband supplier too
- Upgrade your computer to the quickest processor you can afford
These small actions can make a difference!