Crypto mining is the process by which new cryptocurrencies are bought into circulation and new transactions are verified by the blockchain, which is a digital ledger.
In order to mine effectively, specialised computer hardware is required, which uses a large amount of electricity to function properly.
Additionally, mining farms, which are large-scale mining operations, operate in a variety of places throughout the world, taking use of the quickest internet connections and cheapest energy sources.
The construction of cryptocurrencies is also a concern, as the majority of Proof of Work coins use an algorithm that makes hashes more complex to solve with time, raising electricity consumption and accompanying costs.
Concerns being raised across the world
This process requires a lot of energy and has been a cause of concern for environmentalists. Recently, US House Democrats including Jamaal Bowman of California; Alexandria Ocasio-Cortez of New York; and Jesús G. "Chuy" García and Marie Newman of Illinois have called crypto mining an “Environmental Threat.”
The European Union had attracted great attention with its recent talks on a possible ban on proof-of-work (PoW) mining. Environmental pollution caused by huge energy consumption was one of their major arguments to place the ban.
The move towards a greener future
But latest trends show that crypto mining is going green by the day. Ethereum, the decentralised, open-source blockchain with the first ever smart contract functionality, has started moving towards Proof of Stake protocols from Proof of Work protocols and this step is promising because the energy consumption on the blockchain would drastically drop.
Furthermore, as per research released in January by the Bitcoin Mining Council, the worldwide Bitcoin mining sector is being powered by an estimated 58.5 per cent renewable energy by the fourth quarter of 2021.
Norway leads the way
Moreover, a recent report by the Norwegian government highlights how it is setting an example when it comes to green Bitcoin mining.
Because Norway has access to hydropower and other renewable energy sources, Bitcoin miners in the country are more environmentally friendly than practically everywhere else on the earth. In fact, renewable energy sources account for 100 per cent of Norway's electricity generation capacity.
Of Norway's annual electricity production of 157 Terrawatt hours (TWh), 88 percent is generated by hydroelectric power, with the remaining 20 percent coming from wind and thermal energy.
China is also considering greener Bitcoin mining as a possible trillion-dollar industry.
Does all this indicate Bitcoin mining is getting greener by the day? We will keep watch.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today