Bitcoins are mined using sophisticated computers to solve complicated mathematical problems that consume enormous amounts of energy, to the point that it is believed that it consumes more energy than Kazakhstan and the Netherlands combined.
Despite global concerns about cryptocurrencies’ negative environmental impact, such as Bitcoin’s rising carbon footprint, the UN said cryptocurrencies and the Blockchain technology that powers them could be of great help to those fighting the climate crisis and aid in the creation of a more sustainable global economy. Cryptocurrencies and the technology that underpins them (Blockchain), according to UN experts, can play an essential role in sustainable development and really improve our environmental stewardship.
Transparency, climate finance, and renewable energy markets are three major areas where Blockchain might help expedite climate action. For example, according to the UN Environment Programme-Technical University of Denmark (UNEP-DTU) Partnership, data on harmful greenhouse gas emissions in many countries is insufficient and unreliable. Blockchain technology could give a transparent and reliable approach to indicate how countries are reducing their climate effect.
In this field, there are frequent advancements due to the ongoing growth of Blockchain research. Crypto’s sophisticated nature and unequalled resilience to scams and manipulation are the key reasons for its high energy usage. Furthermore, several improvements, such as the addition of a lightning layer to Blockchain by companies such as Square Crypto, which is controlled by Jack Dorsey, will assure its long-term viability.
Bitcoins are mined using sophisticated computers to solve complicated mathematical problems that consume enormous amounts of energy, to the point that it is believed that it consumes more energy than Kazakhstan and the Netherlands combined. Furthermore, according to the UN research, each transaction requires 980 kWh of energy, compared to only 0.0006 kWh for each Mastercard transaction.
“Investments that contribute to slowing the rate of climate change might be boosted if carbon markets are scaled up, allowing businesses and industries to transition to low-carbon technologies,” according to the UN. Furthermore, Blockchain could play a key role in speeding the adoption of renewable energy sources like wind and solar. Because these sources are inherently intermittent and decentralised, new types of energy markets are required, according to the UN.
Elon Musk’s Tesla purchased $1.5 billion in Bitcoin earlier this year in order to accept it as a payment method for its electric automobiles. However, due to the “insane” amount of energy required to manufacture Bitcoin, Musk decided to cease Bitcoin payments in May, citing environmental concerns.