Will Greener Initiatives Work with Crypto Mining?

by | Jun 7, 2022 | Resources | 0 comments

By now, pretty much everyone has heard of or knows what cryptocurrency is. Bitcoin has, in many ways, taken the world by storm. Ethereum and other types of crypto coins are not far behind. The emergence of cryptocurrency and many businesses now happily accepting it have not been without its problems. Beyond the volatility of bitcoin, Ethereum, and other crypto coins, the growing energy problem is posed when mining for crypto.

Crypto mining is the process by which new units of cryptocurrency are found. In essence, miners must solve complex puzzles to mine various crypto coins. There is a “proof of work” feature that is highly energy-intensive. Thousands of computers are generally required. The question is, how are these computers being powered?

Mining bitcoin and other coin types often require monumental amounts of energy, which could power entire countries. This is why China, for example, has banned crypto mining. But for many countries, prohibiting this type of mining is not necessarily the answer. Instead, some are focusing on finding greener ways to mine crypto.

Are Green Mining Initiatives Enough?

In Sweden, for example, a firm known as Hive Blockchain has taken up a nearly 90,000 ft. facility with its mining rigs. The Canadian-based company chose this area because it is known for renewable energy. And its mining operation is powered mainly by hydropower plants. This, however, has caused some issues in the region.

The amount of renewable energy used for crypto mining endeavors could be used more effectively elsewhere, many argue—and potentially, it could be used more efficiently. For instance, figuring out how to transform most vehicles into electric vehicles should be prioritized over crypto mining. So while Hive and others are using renewable resources for their mining, the concern is that there is a danger of them monopolizing such resources.

When Fossil Fuels are Used

Despite many pushes to move bitcoin mining and crypto mining toward greener pastures, many firms are still heavily reliant upon fossil fuels. In the southern parts of the US, miners are focused on using gas, coal, and other fossil fuels to power their processes. According to some studies, in 2021, crypto mining will become highly problematic in terms of the types of energy and the amounts used. Many people consider it a “dirty” business.

What Does the Future Hold for Crypto Mining?

The belief that Bitcoin and crypto mining are eventually going to switch to greener ways is a prominently held one. Especially as more and more miners emerge, firms have to find ways to make the process sustainable. This means making the process green. Many businesses are advertising their mining efforts as green.

The amount of energy needed for Blockchain mining is difficult for many people even to get their heads around. Because the Blockchain network is decentralized, miners have to show “proof of work.” However, this proof of work is causing many problems.

And even when bitcoin mines do rely on renewable energy, they are competing with traditional power consumption. This, however, does not seem to be slowing down the crypto mining craze. Globally, the US is home to over 35% of bitcoin mining. States such as Texas are trying to become crypto capitals. Many suggest that miners switch to proof of stake versus proof of work and thereby cut down on the amount of electricity needed. The answer here is far from clear. One thing stands, it doesn’t seem that crypto mining is going anywhere anytime soon. It is only gaining in popularity.

Is Cryptocurrency The Future for Small Businesses?

Many big-name brands have already started accepting cryptocurrency as payment for goods and services. To some, they believe this form of digital currency is the future. But is it right for your business?

While there are some benefits to accepting cryptocurrencies like lower transaction fees, increased payment convenience, and additional protection from fraud, the market has proven some drawbacks. If you’re thinking of jumping on this train, it is essential to consider your business model, objectives, and customer base before deciding to accept cryptocurrency.

As technology grows, keep your eye out for changes to the cryptocurrency and crypto mining industry. It may benefit your small business later.

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