One of the biggest and newest online debates has been the power consumption of crypto and its rising moniker as a less than green currency. With Bitcoin using the same amount of electricity as Argentina or Australia it has become incumbent for the developers and users alike of crypto currencies to pay more attention to the power consumption and green credentials of the currency they choose to develop, use and invest in.
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How crypto uses power
The moment Elon Musk noted that Tesla would no longer be accepting Bitcoin based on the fact that it was an environmentally unfriendly currency, it became vital for all involved in the world of crypto to begin to re-evaluate. Crypto users and developers alike needed to pay more attention to the levels of energy consumption that the cryptos they had been using or making were consuming. The process of crypto mining and using crypto for financial transactions is energy intensive and blockchain databases can require significant physical resources, space, water and electricity for cooling that the data centers require.
The way that Ethereum has reduced its power demands
The price index of Ethereum has shown significant increase in value as the crypto and blockchain provider made it public knowledge that the changes it was making to its systems and structures had reduced its energy consumption by over 99%. By moving from proof of work to proof of stake, Ethereum was able to reduce the number of people competing for the work to mine or earn the crypto. There is less work being done and thus less energy consumed in the rush to compete against others working for the same crypto. Proof of stake means that only one node on the blockchain is mining for every specific transaction rather than a multitude of miners all competing for the same crypto amount.
This is a significant movement or development, which as aforementioned was quickly seen in the price index and associated increased demand for the crypto. Mining crypto using the proof of work set up saw huge amounts of electricity being used and had stamped the crypto sector as unsustainable. With these new changes as heralded by Ethereum there is a light at the end of the crypto sustainability challenge, and it is being boldly held and shone by Ethereum.
Many argue that this may remove some of the consensus protocols that are essential to the open and decentralized nature of crypto, but this is a small consideration when weighed against the continued waste of electricity, pollution, noise and heightened water usage.
In conclusion, it is important for such an innovative currency and data transmission system and process to be as environmentally aware as possible. As with any of the other investments you make, one of the primary concerns has to be of the damage any such investment does to the environment and our natural surroundings. Climate change is one of the most concerning issues of our time and it is imperative that the currencies of our future innovate with this in mind.