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Cryptocurrency is a digital currency that enables online exchanges. Interestingly, the person who founded the concept has chosen to remain anonymous. Unlike physical money - it is decentralised. This means that the online currency is not anchored by a government body or bank, which means there is no one to step in if things go wrong. The fact it is decentralised has divided opinions.
Anyone is permitted to use cryptocurrency as it has no ties to an official body. Payments are logged but they are not attached to one’s identity. This has been speculated as helpful for criminal activity. People may feel they have more control over their money if there is no bank involved, but this is not the case. You are unprotected if anything goes wrong. If your money is stolen, there is not much that can be done.
The most well-known type of cryptocurrency is bitcoin. Many people are attracted to cryptocurrency because its high value is expected to increase in years to come. The value of bitcoin has fluctuated greatly. Over the course of one year, it jumped from being worth $7,000 to $55,000. The bank of England noted an increase in value by 65% in one day and a decrease in value by 25% another day.
As the metaverse and online world becomes increasingly likely, we may find ourselves more reliant on cryptocurrency than expected. Our reliance on technology makes people keen to invest in bitcoin. But how do you get your hands on it?
The process of obtaining bitcoin is referred to as ‘mining’. According to The New York Times, in 2009 anyone could have used a standard computer in their living room to mine Bitcoin. Now, you would need the equivalent of 9 years worth of electricity used by one household, and multiple expensive computers, totaling almost $50,000. The energy required to obtain Bitcoin skyrockets alongside the value of cryptocurrency.
‘Mining’ is how new bitcoins enter circulation. It is a metaphorical use of the word describing the process in which specific hard drives are programmed to solve a highly complex math puzzle. Multiple machines will be trying to solve the complex puzzle. When one eventually becomes successful they receive a block of bitcoins, and the process restarts.
What’s a block of bitcoins? A blockchain is a method of recording information. Blockchains can be duplicated and shared out, but they cannot be easily modified or hacked. Thinking about this in relation to money, it is obvious why blockchains are an ideal model for online money. It is an easily replicable process but it resists mutation and hackers.
If bitcoins and other cryptocurrencies are worth so much money and appear to be a vital part of our digital future, what’s the catch?
After explaining the complex process of obtaining cryptocurrency, it comes as no surprise that cryptocurrency uses an immense amount of energy. The mass-energy usage required for online currencies has negative repercussions for our earth.
It is common knowledge that mining for bitcoin uses as much energy as entire countries. Sweden, Argentina, Norway, and other small countries, use the same amount of energy as the bitcoin mining process. As the value of bitcoin increases, people have more incentive to mine it - using up more energy and creating more E-waste. It is not only solving the math problem and receiving a blockchain of Bitcoin that uses up energy. The mining computers use a mass amount of energy in cooling themselves down during the extensive process of mining.
Some have noticed the drastic amount of energy mining for cryptocurrencies takes up and have sought eco-friendly alternatives. Ethical alternatives include using renewable energy sources to power mining hard drives. Apparently, in America, 39% of the energy used in Bitcoin mining is supplied by renewable energy sources, such as hydropower. Whilst this is a seemingly promising figure, there is so much more about cryptocurrency that is taxing for our planet.
As a result of mining approximately 30 kilotons of electronic waste has been produced on a yearly basis. Old computers, hard drives, wires, and cables cannot be recycled - they end up in landfill all because of cryptocurrency. Worse than this, some bitcoin miners have teamed up with struggling fossil fuel power plants. These power plants would have most likely shut down without the support from miners. Now they continue to receive funding and contribute to climate change.
Burning fossil fuels is one of the worst things we can do for our planet. It greatly reduces our chances of cooling our earth to control climate change. Continuing to burn fossil fuels will have a catastrophic effect on our planet, fossil fuel power plants should not be receiving funding or support.
Evidently, the impact of bitcoin and cryptocurrencies is extensive. Fossil fuels pose a major threat to the future of our earth meaning anything that funds fossil fuel power plants is by default bad for the environment.
The popularization of cryptocurrency is problematic because it risks normalizing electronic versions of physical things. For example, the metaverse promises the future of fashion will be online, inspiring designers to create online collections. Whilst this may seem exciting, online design takes up a large amount of energy. We cannot afford to shift entirely online as it will be too taxing on our planet.
However, there are some positives of online design. It enables the creation of electronic 3D prototypes. As a result, the resources and energy required to make the prototype physically are preserved. Companies can make test models online and get a clearer idea of how to successfully make the item. Consequently, they will use fewer resources when it comes to the final manufacturing stage. 3D online design enables companies to figure out what changes to make to their design from the online prototype.
Digital fashion has perks too. It could significantly reduce clothing production - preventing fast fashion brands from producing hundreds of new items a month. Moving fashion online could reduce the amount of textile waste in landfills and save large amounts of water needed to make denim. It would be easier for people to switch up their style and follow trends. As digital clothing wouldn't result in textile waste, people could purchase more clothes with less guilt.
Evidently, cryptocurrency is a multifaceted concept. The mass amount of energy required to mine cryptocurrency has prompted some people to consider the sheer amount of energy online resources require. Undeniably, cryptocurrency and online design do have benefits that could help us in the future. However, we must consider the repercussions of online design and reduce energy consumption where possible.
Florenne Earle Ledger