How Clean is Crypto Mining?
NFTs, the metaverse, Cryptos, and Crypto Mining have all taken a toll on the environment. Let’s start with mining cryptos. The mining of cryptocurrencies involves a process of creating new coins by using computers and processing tools to solve complex mathematical problems. The mining process also aims to validate the transactions on the cryptocurrency’s network, to prove their authenticity in the blockchain. These transactions are validated using a “proof of work” or “proof of stake” mechanism, that are all documented in detail on the blockchain itself. These “proof of work” validations require miners to compete against each other to complete a difficult math puzzle. The individual to complete the puzzle first, is rewarded with a predetermined amount of cryptocurrency, along with the ability to validate their transaction. In a “proof of state” model, crypto owners may validate transactions based on the number of tokens they stake with the rest of the mining community. Moreover, crypto owners must put up their own cryptocurrency as collateral for the opportunity to successfully approve various transactions where crypto is mined. “Proof of work” sounds less complicated, but “proof of stake” has the potential to cut emissions. If blockchain transactions were verified using only proof of stake, their energy consumption would be reduced to 0.01% the original value of Ethereum.
Lots of power is needed to run the Bitcoin network around the world. An astounding 7.46 gigawatts (GW) is required to run the network globally each year. For a simple comparison, an average sized nuclear plant can create 1GW of usable, electric power in a year. The energy used for a single Bitcoin transaction could power the average US home for more than two months. Both Bitcoin and Ethereum mining efforts emit more than 70M tons of carbon dioxide (CO²) into our air. These emissions can be compared to the fumes released from over 15M automobiles. The crypto and NFT markets are not as clean as we may think. The term “gas fees” represents a common term describing the energy requirements needed to mine cryptocurrencies and to validate transactions. Gas fees charged by miners and incurred by NFT creators/minters will need to undergo major changes to adhere to sustainable environmental efforts going forward.
“One of the first conditions of happiness is that the link between man and nature shall not be broken.”
—Leo Tolstoy
