Is Bitcoin the New Coal?

Yet According to Cambridge University analysis, Bitcoin uses around 120 TWh of energy per year, on par with countries like Norway and Argentina, and is estimated to reach as much at 184 TWh, nearly the same consumption as that of London.

The currency utilizes a process called proof of work, which requires an arsenal of high-powered computers to solve a cryptic puzzle every 10 minutes to create new currency to add to the blockchain.

Even with cheap, renewable energy, Bitcoin would be diverting that clean energy from critical infrastructure, slowing the world’s existential race to carbon neutrality.

To make cryptocurrency transactions environmentally viable, policymakers should be embracing greener crypto technologies such as the proof-of-stake and federated consensus systems. While proof of work incentivizes computing power to prevent the double-spending of coins, these alternative technologies work in a different but equally effective way that doesn’t use meaningful amounts of energy.

While Bitcoin can create a transaction every 10 minutes — up to an hour for the transaction to be fully validated — proof-of-stake currencies can confirm transactions in seconds.

Unfortunately, Bitcoin’s governance is in the hands of powerful miners who have very little incentive to change to greener consensus methods.

Paris Climate Agreement signees must commit to tax or ban proof-of-work coins by the global audit of the 2015 accord scheduled to take place in 2023 at the United Nations Framework Convention on Climate Change conference in Glasgow.

Addressing coins that burn excessive energy for mining will be the only way to square cryptocurrencies with real-world environmental damage.

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