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HomeNewsHigh Energy Consumption: That Could Make Bitcoin More Environmentally Friendly

High Energy Consumption: That Could Make Bitcoin More Environmentally Friendly


• Large amounts of energy are required for Bitcoin mining and transactions
• Only renewable energies could significantly improve the image
• Proof-of-stake method in the field of cryptocurrencies is significantly more energy-efficient

Bitcoin is considered a climate sinner

The criticism regarding the bad climate footprint does not only come from the Tesla CEO but is one of the most common criticisms of the cyber motto. Both the mining of the coins and each individual transaction are associated with a very high expenditure of energy with Bitcoin. It is assumed that the energy consumption of Bitcoin per year exceeds the electricity consumption of the Netherlands, as Mareike Müller reported from Handelsblatt. Since energy is often obtained from fossil fuels, consumption has a particularly bad effect on the climate. This is where the first possibility to make Bitcoin more environmentally friendly lies because what matters is where the electricity comes from.

Green energy could help Bitcoin

The high power consumption in and of itself is ultimately not the problem, rather one has to pay attention to where the power comes from. It would be a decisive factor if Bitcoin mining and the energy required for transactions could be obtained entirely from renewable energies, according to Constantin Kogan of Yahoo Finance. This could significantly improve the ecological footprint and the carbon footprint of bitcoin. The prices for natural energy sources have fallen continuously in recent years, and efficiency and production capacities are increasingly being expanded around the world. Consequently, this should not result in any financial disadvantage for the miners in the long term. Should the mining industry switch more and more to “green” electricity, the mood regarding Bitcoin should rise again. After the recurring criticism of Bitcoin, it has already been observed in recent months that 56 percent of the electricity in the mining sector now comes from renewable energies, says Constantin Kogan. In the first quarter of 2021, this rate was still 36.8 percent.

Change of method

Another approach to making Bitcoin more environmentally friendly is to change the basic process. Bitcoin currently works with the PoW (Proof-of-Work) method, while some other cryptocurrencies use the more energy-efficient PoS (Proof-of-Stake) method. The difference between the two methods lies in how a transaction is validated on the blockchain. PoS protocols have a much simpler and more cost-effective structure but prefer participants who have a large number of the respective cryptocurrency for validation. However, this approach is not very popular with real crypto fans, as the process makes the cryptocurrencies “less decentralized,” according to a Handelsblatt report. There are also other approaches such as mobile data centers for mining coins, which can be positioned in cool environments in order to reduce the very high energy requirements for thermal management, says Constantin Kogan.

Overall, there are many ways to make Bitcoin more environmentally friendly and the last few months have already shown that the industry is also interested in minimizing its own CO2 emissions. However, it remains to be seen for the time being which methods will prevail in the end and when “green” Bitcoin mining will be achieved.


Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.


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