Cryptocurrencies use massive amounts of power – but eco-friendly alternatives come with their own risks
theconversation.comAs the urgency of climate change ramps up, focus is increasing on digital currencies to address their environmental impact. According to industry forecasts, the global cryptocurrency market is expected to surge to US$4.94 billion by 2030.
But the process of mining digital currencies such as Bitcoin requires immense computational power – causing a significant drain on energy resources. “Miners” use sophisticated hardware to solve complex mathematical puzzles, securing transactions and minting new coins.
But this process, known as “proof of work” (PoW), is energy intensive. Imagine a giant lock with a million combinations. Miners are all competing to find the right combination to unlock the block (a group of transactions) and earn rewards.
The more computing power you have, the faster you can try different combinations. But this computing power requires a lot of energy, similar to how a powerful car uses more petrol.