Expensive gas means not enough cost-effective electricity. As there is not enough cost-effective electricity, crypto-mining becomes pricey. Crypto-miners use powerful computers to solve complex mathematical puzzles to mine new tokens. It is equal to spending a lot of electricity. The math is – more expenses, less gain.
Cryptocurrency miners do not use much sustainable energy, Cambridge University’s research shows. Having in mind above mentioned circumstances, they are considering the possibility to go green. Going green will ease their electricity bills, and will lower the impact on the environment. So, it is getting the best of both worlds.
The process of transactions and mining cryptocurrencies literally absorbs electricity. Imagine a worldwide network of powerful computers working hard and competing to complete the calculations. They are plugged in 24/7. How much electricity is that worldwide? Nobody knows for sure, but it is a lot.
Especially, if we have in mind that electricity mainly comes from fossil fuels. The research by the Cambridge Bitcoin Electricity Consumption Index (CBECI) showed that energy from fossil fuels consists 62% up to January 2022. True, there is an improvement. The previous year the percentage was 65%. Also, it is true that coal used to produce electricity for crypto-mining fell from 47% to 37%.
Crypto-mining shifting toward cleaner energy
That is why cryptocurrency miners are facing criticism from policymakers, investors, and environmentalists. But, obviously, they have a tendency of going green. The same research shows that gas was involved in 25% of energy consumption for mining in January 2022. Previous data on gas involvement in crypto-mining was only 16%.
The research of Cambridge scientists notes the tendency of shifting toward cleaner energy. Among others, crypto-miners are turning to projects of producing energy from repurposed byproducts from oil extraction.
But, the sustainable power they spend insignificantly rose from 35% a year earlier to less than 38%. Hydropower even has a tendency of going down – from 20% to 15% this January.
Some countries are greener than others
As we said before, it is impossible to make precise math about anything connected to crypto. It is unregulated, so this Cambridge research data is based on the local average spending on electricity mixtures. Simply said, some countries where powerful computers are located are greener than others.
Thus, calculating cryptocurrencies’ footprint on the environment is almost impossible. But the energy mix the countries themselves use has a serious environmental impact.