Greening up with Crypto; the Impact project.

Cryptocurrencies like Bitcoin and Ethereum have made considerable advancements since their introduction ten years ago. From being acclaimed as the currency of the Internet, they have evolved into erratic digital assets. Initially, all you needed to mine Bitcoin was a laptop, but this is no longer an option because to the exponential rise in the amount of power needed to produce Bitcoin.Currently, Argentina, a nation of 45 million people, uses an estimated 133.64 terawatt-hours of electricity annually, which is more than Bitcoin, the most popular cryptocurrency in the world. Prior to the recent conversion to Proof of Stake, Ethereum, the second-largest cryptocurrency in the world, experienced usage that was comparable to Bitcoin’s.

© image: inside bitcoins

The PoW consensus method is to fault for this massive increase in electricity use.

In this type of mining, super-fast computers compete with one another to complete transactions by resolving quintillions of complex numerical calculations each second. In exchange for providing this computational service, miners receive brand-new coins, which incentivizes them to maintain their equipment.

Due to growing concern about the damaging effects that cryptocurrency mining has on the environment, many countries have made the decision to completely ban cryptocurrencies. China, Algeria, Bangladesh, Egypt, Iraq, Morocco, Oman, Qatar, and Tunisia are some of these countries. The newest country to forbid bitcoin mining is Russia. However, businesses have also admitted that cryptocurrencies harm the environment as well as other countries. Elon Musk, the CEO of Tesla, an electric car maker, tweeted that the company would stop taking Bitcoin for vehicle purchases in May 2021 due to concerns about climate change. Musk has always supported cryptocurrencies, and around the time of his tweet, Bitcoin fell more than 10%.

With the aim of decarbonizing the cryptocurrency sector by making it easier for blockchain initiatives to purchase offsets, the Crypto Climate Accord was founded in 2021. More than 200 organisations, blockchains, and individuals from the technology, energy, banking, and cryptocurrency sectors have so far given it their support. Here are some additional initiatives:

Evidence of Stake (PoS)

Despite the fact that Bitcoin is now powered by the “Proof of Work” energy system, some in the industry are attempting to develop new cryptocurrencies on a different energy system called “Proof of Stake.” The second-largest cryptocurrency, Ethereum, has already made the transition from a Proof-of-Work (PoW) paradigm to a Proof-of-Stake (PoS) framework.

Any cryptocurrency owner can utilise the Proof-of-Stake technique to pledge their tokens as security for the development of blockchain technology. The user receives payment in the form of a particular percentage of the pledged assets each time a new block is added to the blockchain. The term “staking” is used to describe this action. Proof-of-Stake requires a lot less energy than Proof-of-Work. In this process, just 0.01 percent of the energy required for mining is used. Proof of stake algorithms can also be run from a laptop, unlike the proof of work protocol, which needs specialist processing power.

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