Blocchain is a game changer from a technology development standpoint and cryptocurrencies have open opportunities to change how we control, transfer and manage money.
The opportunity to replace outdated systems and trade goods and services under an almost transaction free platform has been made possible through the advanced applications of modern technology.
Blockchain and cryptocurrencies developments have reduced transaction costs and timeframes, as well as improved security and are a breakthrough compared to traditional banking frameworks.
New technologies are always taken with scepticism during their initial stages just as it was the case with emails. However, in this modern day an age we would struggle to picture how we could go about functioning without them.
In a similar way to e-mail cryptocurrencies and blockchain could become the norm in not a very distant future as they have the potential to outrival traditional banking platforms from a cost, speed and security perspective making them commercially obsolete.
ARE CRYPTOCURRENCIES ENVIROMENTALLY SUSTAINABLE?
Historically we have jumped to embrace technology without giving too much thought to potential unintended consequences.
Blockchain technology requires energy for the verification of transactions taking place endlessly as we trade goods and services on a daily basis. There is also high energy consumption implications from a mining standpoint.
Cryptocurrencies need to be mined, which involves solving complex mathematical equations to identify unique codes with a respective value that can be transferred and used across the blockchain network.
Similar to the Gold Rush in the 19th century, miners have emerged across the globe, gearing up with processors and cryptographic equipment to specifically mine cryptocurrency. However, this process becomes increasingly harder and more energy consuming, as with every single cryptocurrency code extracted there are less remaining codes that can transact in the blockchain making it harder to solve these complex mathematical equations.
Digiconomist estimates that bitcoin mining, the process of generating bitcoins, accounts for 0.29% of the world’s annual electricity consumption. The mining of a single bitcoin block—a block of transaction data on the bitcoin network—consumes enough energy to power more than 28 U.S. homes for a day.
Some people wonder if cryptocurrencies will disrupt the financial system, while others wonder if they will break the environment in the process.
That’s why an increasing number of solar and hydro-powered miners are emerging.
ARE BANKS OR CRYTOCURRENCIES MORE ENERGY EFFICIENT?
According to ClimateState cryptocurrency energy consumption is 3 times more efficient than a very conservative calculation of the cost of the global banking system.
GREEN ENERGY BLOCKCHAIN MINING
There are also numerous crypto miners that only use clean, renewable energy. Genesis Mining, based in Iceland for example, mines Bitcoin and Ethereum in the cloud and only uses renewable energy.
Given the challenges and potential consequences of global warming, energy efficiency will be a critical consideration in the development of technological solutions and a key focus among consumers as we move forward into the future.
Research view point by Responsible-Investors