Given the recent bush fires in Australia, concerns about the long-term effects of climate change are naturally high. With slow action from those in power, people are impatient for any progress towards a more sustainable and greener global economy. Fortunately, the catalyst for such a business may be blockchain technology.
Blockchain and cryptocurrencies have taken more than 10 years to mature. Even if little has changed in terms of internal functioning, people’s perception of them has changed. They are no longer considered an investment for gamblers and only a trend that will disappear in a few months. Bitcoin, Ethereum, Litecoin, Bitcoin Cash and many others have long struggled for their survival. The mere fact that these cryptocurrencies are still alive and thriving is sufficient proof that they are here to stay and be a viable alternative to the financial system.
Cryptocurrencies – the financial and green alternative
Cryptocurrencies have successfully established themselves as an asset class for holding and transferring value over the past decade. There is another incentive for global adoption: the green economy. Although cryptocurrencies have been criticized for their energy consumption, the situation has only been examined unilaterally. The power that cryptocurrencies demand has been greatly exaggerated and the sources have not looked at the energy consumption of the traditional Bitcoin alternative – the banking industry.
The banks have indirect and direct ecological effects. The industry has not only channeled massive funding to the petroleum and coal mining industries, but it also manages thousands of buildings around the world, each with its own carbon footprint, which is not sustainable . But let’s forget the first ones and focus on their use of electricity.
Banks vs Crypto
In a very detailed analysis of the energy cost of the current banking system, Bitcoin used 28.67 TWh in 2017, which is at least 3 times less than what the banks needed to power their operations. Furthermore, according to the Cambridge Bitcoin Electricity Consumption Index, or CBECI, Bitcoin could be powered entirely by the same amount of energy wasted by electronic devices operating unnecessarily in the United States only. The same study mentions that the energy produced worldwide by solar, wind and other renewable sources is enough to power Bitcoin 20 times.
What is unique with cryptocurrencies is that they can run entirely on green energy. Replacing a mining farm’s power source with a green energy source significantly reduces its carbon footprint. On the other hand, banks rely on people and processes that are immensely more complicated and would involve considerable effort to make them truly green.
Reality – no science fiction
The good news is that mining operations powered by 100% clean energy are not science fiction. For example, Genesis Mining, the world’s largest cloud mining company, has installed facilities in Iceland, operating entirely on thermal energy and in Sweden – hydroelectricity.
Cryptocurrencies do not depend on people, paperwork or buildings to function. Removing these factors from their carbon footprints, Bitcoin and other cryptocurrencies only need energy or electricity. If you can give green energy to cryptocurrencies, we get a green alternative to the global carbon economy.
Stay up to date on everything related to cryptography with Bitvalex. Bitvalex is a licensed digital wallet and cryptocurrency exchange; learn more about us and blockchain technology and register to use our services.