Bitcoin, the pioneering cryptocurrency, is grappling with significant environmental challenges due to its vast annual electricity consumption of around 139.39 TWh, comparable to the power demands of entire countries. Bitcoin’s PoW system, responsible for its high energy use, contributed to a carbon footprint exceeding 65 million tonnes of CO2 in 2021.
Bitcoin transactions are validated by users who mine bitcoins through the energy-consuming PoW process. The winning miner, who solves complex cryptographic puzzles, receives new Bitcoins as a reward. This process, primarily powered by fossil fuels, releases significant amounts of greenhouse gases, exacerbating global warming. As research published in 2022 revealed,
Bitcoin mining may be responsible for 65.4 megatonnes of CO2 per year, which is comparable to country-level emissions in Greece (56.6 megatonnes in 2019).”
Compared to Bitcoin, which operates on the energy-demanding proof-of-work (PoW) consensus mechanism, TRON’s energy use is significantly lower, consuming less than 0.001% of Bitcoin’s annual electricity consumption of 83.87 TWh (as of July 1, 2022).
The legal roadmap:-
As the cryptocurrency industry evolves, sustainability is now a key concern. While the path to eco-friendliness isn’t straightforward, the transformation of Ethereum from a proof-of-work to a proof-of-stake system shows that change is achievable. Further, collaborations between the crypto community, regulators, and other stakeholders can harmonize technology with environmental responsibility.
The proposed Crypto-Asset Environmental Transparency Act of 2022 is one such initiative. It seeks to compel crypto-mining operations using over 5 megawatts of power to report their carbon dioxide emissions, increasing transparency and understanding of crypto-mining’s environmental impact.
The Act also proposes an interagency study to assess the environmental impacts of crypto mining in the US, including the number of mining operations, the effects of energy demand on emissions, local impacts on noise and water pollution from mining facilities, and the negotiation of demand response programs between mining centers and utilities.
The story of cryptocurrencies and their environmental effects is still being written. As it progresses, the pursuit of sustainability continues to shine as a guiding light, leading the way toward a more environmentally friendly and responsible future.
