China cracking down on bitcoin mining and Elon Musk suspending Tesla’s acceptance of bitcoin due to the large amounts of energy it takes to mine have both contributed to the cryptocurrency losing almost half its value from its high of over $64,000 in April.
It’s also making it hard for even bitcoin bulls to ignore what many say are bitcoin’s sustainability issues. (Though not everyone agrees.)
So what’s the solution? Here’s why bitcoin uses so much energy and a few ways bitcoin mining could be more eco-conscious, according to experts.
Why bitcoin mining has sustainability issues
Bitcoin’s main sustainability issue is the huge amount of energy used in bitcoin mining.
Bitcoin mining is how new bitcoin are released into circulation. Miners verify transactions on Bitcoin’s blockchain to help avoid fraud and, as a reward, they are given new bitcoin. To verify transactions miners must solve extremely complex math problems, essentially by trial and error, which requires complex computer systems and a large amount of computational power. That much computing power uses a lot of electricity.
“Right now, millions of Bitcoin mining devices around the world are generating 130 quintillion of such guesses every second of the day non-stop. Combined, these machines are now consuming as much electrical energy as a country like the Netherlands,” says Alex de Vries, a financial economist who runs Digiconomist.
And because of that, the higher the price of bitcoin goes, the more energy it takes for miners to