Crypto Academy

The environmental impact of cryptos

the environmental impact of cryptos

7 min reading

Crypto-currencies are becoming more popular each day. However, what impact does it have on the environment?

Is the environmental impact of cryptos

Is the environmental impact of cryptos really harsher than that of the functioning of the banking system?

Introduction

Cryptocurrencies, although new to the world, have evolved over the years into an industry that has impacted the entire world. The introduction of cryptocurrencies as a medium of exchange, allowing people to have complete control over their assets and wealth, is, in a sense, a threat to our traditional centralized banks. Despite massive growth in the digital industry, there have been some concerns about the environmental impact of cryptocurrency mining.

Facts about mining

The computers used to mine cryptocurrency must be powerful enough to solve complex math problems, but too complex to be solved manually. The number of bitcoins issued is halved every four years, which over time makes the currency more valuable, but more expensive and more durable for miners, which affects its energy consumption. 

If you are considering the mining process, for example, mining bitcoin requires a lot more energy than producing billions of Visa cards. The energy required to mine BTC is equal to the energy required to launch a Boeing 747.

Another issue is related to ASIC devices, e-waste that becomes obsolete after two years and cannot be used for any purpose other than mining. Until now, the method of burning coal and fossil fuels has been used to generate electricity. However, burning coal has had a significant impact on climate change. On the other hand, if we consider traditional banking systems, the energy supplied by the utilities is sufficient to carry out all the necessary operations. It follows from this analysis that traditional banking systems do not consume as much energy as cryptocurrencies.

Statistics

According to the analytical platform Digiconomist, the amount of electricity required for mining is comparable to what an entire country consumes in a year. Mining generates 36.95 megatons of carbon dioxide per year, roughly the same as in New Zealand. The carbon dioxide emissions that accompany electricity production, in turn, increase the greenhouse effect on the planet.

What studies say about mining

Bitcoin mining and its connection to the environment is a topic of global university interest. Cambridge conducted a study in which they found the amount of energy that is spent each year to generate the cryptocurrency. The results showed that even some countries use less electricity per year. The mining equipment is very powerful, so it wastes a lot of energy. The researchers found that the number of terawatt-hours for mining is about 121.36. Even Argentina and the Netherlands use less electricity per year than goes into mining bitcoinNorway came close to cryptocurrency in terms of energy consumption. Bitcoin proponents claim that mining is increasingly using electricity from renewable sources because it is becoming cheaper and uses much less energy than other sources.

However, despite the put forward reasons why cryptocurrency mining is harmful to the environment, these claims have been counter-analyzed. Miners have highlighted new strategies to reduce the dependence of mining operations on massive amounts of energy. We cannot conclude to a large extent that cryptocurrencies have a negative effect on the environment. Just as it was mentioned earlier, electricity is one of the setbacks of cryptocurrency that has found a mode for equilibrium. The fact that there are miners and the great financial benefits which come with crypto mining does not cloud the miner’s sense of judgment. That is why miners will always locate countries where electricity is comparably cheap thus reducing the impact it will have on the entire public.

Network performance

To determine the exact power consumption of cryptocurrencies, the researchers used interviews and surveys and performed calculations based on network performance. Digiconomists also rely on the amount of electricity bills. Determining the number of greenhouse gas emissions from the production of cryptocurrencies is not entirely easy, given that their amount changes daily and cannot be tracked. In conclusion, despite these points, the effectiveness of cryptocurrency payments and their ability to help people avoid inflation outweighs their environmental performance. The issue raised about the harmful nature of the mining process to the environment, miners have resorted to going to open space far away from the population in order to avoid mishaps.

Conclusions

History of the crypto

History of the crypto

7 min reading

Explore the origin and the history of crypto-currency development!

History of the crypto

History of the crypto

The history of cryptocurrency has begun with the launching of bitcoin and is used in various spheres of economic and daily life. In order to assess the cryptocurrency perspectives, we need to explore its digital nature, history of occurrence, and how it develops during the years. Thus, in the article, we will consider why the crypto occurred and what circumstances had led to it. 

What is cryptocurrency?

To find the answer to the question, we should determine what is the notion of cryptocurrency. Cryptocurrency is the type of asset that is based on blockchain technology and has a digital nature. It is encrypted information that cannot be copied or falsified. It exists only on the Internet and is not stored anywhere, except the so-called crypto wallets (the devices or software, that give you access to your cryptos). Important to know, that the cryptocurrency is decentralized and no one can guarantee its stable price rates. After the successful launch of bitcoin, many new cryptocurrency projects have begun to develop. At first, digital coins gained popularity among crypto enthusiasts. But more and more common observers became interested in bitcoin after it reached its all-time high. The price rates of the first crypto coin fell several times, but they always rose, breaking previous records.

Specifics of the crypto market

The crypto market is so volatile that it can change in just a few hours. Therefore, it is important to understand the factors behind cryptocurrencies and how they help us to predict price movements. Many see the media as an effective means of manipulating the public. Besides, this factor is relevant mainly for short-term forecasts. News is distinguished by the type of sources: political and systemic. There is also the fear factor. Opinion leaders often control the market through doubt, uncertainty, and fear of missed opportunities. 

The behavior of financial enthusiasts is a common cause of the rise and fall of cryptocurrencies. New platforms, growing investor interest, and the deployment of innovative features have a positive effect on long-term rate growth. The expansion of the bitcoin market is built on confronting traditional economic factors. Also, if there is a public interest, cryptocurrencies will rise with it along with security concerns. System hacks, exchange closures, and hacking attacks are unpredictable things.A single bug in the code can rob thousands of cryptocurrency owners and cause a market crash.

Brief history

Bitcoin began its history in early 2009. Satoshi Nakamoto was the creator of the first cryptocurrency in the world. The coin price at this time was only 8 cents, so various companies and common investors were just getting started with Bitcoin, providing it with multiple growths in the future. At first, a small group of people knew about bitcoin, but it became more popular after the creation of Bitcointalk, a specialized forum for crypto enthusiasts. It was the turning point and the rate started growing.   

In 2010, a serious vulnerability was discovered in the Bitcoin protocol: transactions were not properly verified before being added to the blockchain, thus bypassing the economic limitations of the protocol and creating an unlimited supply of bitcoins were possible. On August 15th, this vulnerability was attacked. Then, more than 184 billion bitcoins were generated in one transaction and were sent to two addresses. In a few hours, the administration tracked and removed this transaction from the blockchain. After that, it was fixed and bitcoin was updated in its security protocols. It was the only serious vulnerability in the history of bitcoin that hackers managed to exploit. 

Besides, mining became widespread among the users and miners began to unite in pools with the distribution of rewards for the blocks found among all participants in proportion to their contributions. Despite some negative nuances such as low transaction speed and commissions, bitcoin rapidly grew in popularity and became at that time, a successful project due to its privacy and decentralization. From 2013 till now, new technologies for creating and updating cryptocurrencies are appearing.  The bitcoin price increased due to the spread of news about the adoption of bitcoin in various countries on the legislative level and the integration of blockchain technology in daily life. 

However, advertising new projects and publishing news about them will surely attract a wave of new traders, common users, and investors who have just become interested in the new world of blockchain technologies. Along with the growing popularity of cryptocurrencies, this market is also developing very fast with the creation of thousands of new ICO projects that are raising billions of dollars that are invested in new technologies, products, and companies. 

Conclusions