In an age of constantly emerging technology, there are endless possibilities that could not be recently achieved. One of the most recent innovations in technology, cryptocurrency, has taken the world by storm just a few years ago. This year alone we have seen cryptocurrencies like bitcoin be accepted by countries and companies as a valid source of payment. In contrast, the world has seen currencies like Dogecoin emerge as a meme, yet still making investors great dividends.

On the surface level, it looks like the sky is the limit for crypto with groundbreaking concepts like non-fungible tokens (NFTs) strengthening the crypto market. Unfortunately, new research has found that cryptocurrency could be more harmful to the world than we initially thought.

Recently, the environmental impact of crypto, mainly bitcoin, has been found because of Bitcoin miners. Mining bitcoin is not a new concept in the world of cryptocurrency.  In basic terms, bitcoin mining is the use of extremely advanced computers to solve problems in pursuit of getting bitcoin in return. While some have found profits mining bitcoin, the payoff is often not so high.

The return on bitcoin mining can sometimes be little to none because of the startup and operating costs of carrying out an operation like bitcoin mining. First, the computers used to mine are not cheap, and usually, large mines can house thousands of these computers simultaneously. Now, with many computers running very complex mathematical problems these computers require an extreme amount of power.

For reference of how much electricity cryptocurrencies require to stay afloat, this year the BBC estimated that bitcoin uses over 120 terawatt-hours of electricity per year. That is more electricity than the entire country of Argentina uses in a year.

One of the leading countries in bitcoin mining, China, sees around 65% of the world’s bitcoin mining. It is no mystery that China is one of the most polluted countries in the world as well. China powers these massive mining operations mainly from coal. This use of coal in China and other big mining countries contributes to carbon dioxide emissions of over 36 million tons.

On a smaller, more understandable scale for the amount of e-waste that bitcoin transactions create researchers have found an estimate for each transaction. For each transaction, there is a little over a half-pound of e-waste produced which is roughly equivalent to throwing 2 iPhones into a landfill.  With hundreds of millions of transactions made simply through easy-to-access apps, there are hypothetically millions of iPhones going to waste each year.

In February 2021, Tesla, Inc. started to accept bitcoin as a form of payment for their cars. Initially, this was massive news that promoted the use of bitcoin in marketplaces. Just a couple of months later, Elon Musk retracted the decision saying via Twitter, “Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.” In the future, Tesla hopes to use Bitcoin once the energy used by the currency becomes more sustainable.

Some countries have realized this environmental impact of crypto and have started to regulate cryptocurrencies. Governments have cracked down on mining by instituting prison sentences for operators of massive mines in hopes of limiting pollution.

There is a bright side to the future of cryptocurrencies, though.

Fortunately, not all cryptos have the scale of mines or even the ability to mine for that matter. What this means for many cryptocurrencies is that the transactions necessary do not need the supercomputers needed for bitcoin. For example, Cardano is a decentralized cryptocurrency used by countries like Ethiopia that requires no mining. In turn, consumers who want to invest in Cardano could do so simply through their computer network needing a lot less electricity than other cryptocurrencies.

The future of crypto is still up in the air and policymakers are quickly trying to regulate currencies as fast as possible.
Some countries have taken excessive action in preventing the amount of pollution that is caused by cryptocurrencies.
There is still no doubt that crypto will continue to grow but the question remains, what will be the lasting impact on the world we live in?