The case for a greener Bitcoin ultimately puts faith in the free market to sort out the kinks. But when it comes to our climate, we truly can't afford to depend on that.
Environmentalists and local governments are increasingly worried about the high-energy consumption that comes with producing some cryptocurrencies. In one case, a bitcoin “mining” facility was responsible for a third of a Montana county’s electricity usage.
June 1, 2021
Most cryptocurrencies need energy-intensive computers to keep the market moving. A new verification model could remove the need for those machines.
SHOW TRANSCRIPT
It’s no secret that cryptocurrencies are notoriously bad for the climate.
Right now, Bitcoin uses as much energy as Pakistan and has a carbon footprint comparable to Libya. Ethereum, another popular cryptocurrency, uses the same amount of electricity as Singapore.
But there is a solution on the horizon. Experts think that a switch from the proof-of-work system to a proof-of-stake system could drastically reduce cryptocurrency energy usage. Let s explain what that means.
Currently, cryptocurrencies like Bitcoin or Ethereum operate on a proof-of-work system, which uses power-hungry, specialized computers to verify transactions for people sending cryptocurrencies on a ledger known as a blockchain.