In 2008, after the iconic US investment bank Lehman Brothers Holdings Inc. filed for bankruptcy, people's faith in the banking system took a huge tumble. It was then the world first heard about Bitcoin (BTC) – the first cryptocurrency ever. About two months later, on November 1, 2008, an individual or a group of people under the pseudonym "Satoshi Nakamoto" wrote an email to a cryptography mailing list which said, "I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party. The paper is available at bitcoin.org/bitcoin.pdf."
The cryptocurrency world born on the back of dwindling trust in the banks had made it to 2021, and How? People today are more curious about the possibility imposed by cryptocurrencies. More people are investing in it, and companies have started to adopt some of them as a mode of payment. However, with every blessing and risk associated with the cryptocurrency, today, we have an elephant to address in the crypto-world - Can we invest in cryptocurrency without destroying the planet? The answer lies beneath, followed by the origin of the first-ever cryptocurrency, i.e., Bitcoin.
Later on January 3, 2009, Satoshi Nakamoto made the first Bitcoin transaction with 50 BTCs on the blockchain at 18:15:05 hours. Satoshi had designed the system so that the initial 50 BTCs can never be used or spent. Ever since then, the cryptocurrency market has, undeniably, come along through multiple highs and lows. Today, there are about 6000 types of cryptocurrencies in existence.
Ever since its creation, the cryptocurrency had made a niche for it in the financial market. But earlier in 2021, after a couple of huge crashes, the crypto market witnessed its most significant rise when the Tesla founder Elon Musk made a series of tweets related to cryptocurrency. It sparked a chain of events where the cryptocurrency gained mainstream popularity leading to several debates calling it the future of currency.
Of all the volatile cryptocurrencies, BTC has forever remained the most stable of them all. Musk, a famous inspiring persona, led people to invest in BTC and other cryptocurrency forms. However, months later, he tweeted that he had fallen in love with Bitcoin. He followed it up by declaring that he and his company, Tesla, will no longer support Bitcoin owing to its sustainability criteria. His tweet accomplished a few things.
It exposed the volatile nature of cryptocurrency, where the riches can somehow manipulate the crypto market behavior.
It caused the largest ever crash in the crypto market
Raised question upon the mining of cryptocurrencies, if doing so is safe and sustainable for the environment.
Musk, with his tweets, had successfully raised the concerns related to cryptocurrency mining that it may not be sustainable. It meant investing in some cryptocurrencies like Bitcoin could potentially harm our planet.
Since then, much research and debates have been done on BTC mining and other cryptocurrencies whether it is environmentally safe to invest in cryptocurrencies. Some of the key takeaways that came out of some research and discussion are:
It takes a large amount of energy to mine Bitcoin and some other forms of cryptocurrency. One of the reports has estimated that the amount of energy BTC mining takes in a year is the same as the energy used by Argentina.
China has the most bitcoin miners at around 65%, where most energy gets generated from coal.
Some disputed figures state that around 74% of BTC's energy comes from renewable sources of energy.
The amount of e-waste generated by the BTC mining network got estimated at around 11.5 kilotons per year.
Not every cryptocurrency relies on mining, meaning they bear no significant impacts on our environment.
From the takeaways mentioned earlier, it was evident that some cryptocurrencies are harmful to our ecosystem. At the same time, there are some environmentally friendly cryptocurrencies. To decide which cryptocurrency you should invest in, the first thing you must consider is how eco-friendly a cryptocurrency is?
To do so, one must look at how a cryptocurrency gets mined before investing in it. Bitcoins are mined by a process known as the proof of work mining. In this process, the miners have to solve encrypted algorithms with the help of the computing power of their machines. As a result, a lot of energy gets used up to generate BTCs and make profits from Bitcoin.
Then there is another process that helps in the creation of some cryptocurrencies. The process is known as the proof of stake. Here, to create a new coin or validate a transaction, its miners must stake their cryptocurrency shares. The miners who provide the correct information gets rewarded, whereas those who give false information are penalized. Due to this, the block creation in it instead of using computing power depends on wealth. Thus, such crypto coins don't rely on using a lot of energy. In fact, estimation shows that the proof of stake process uses less than 99.95% of energy than the proof of work network.
There is another process that can generate some future of cryptocurrencies. The process is called proof of storage and block-lattice. Although these two processes consume energy for validating transactions of crypto creation, the energy used is much lesser than the proof of work method.
So, overall depending upon the process of coin generation or validating transaction, you can make your crypto investment. Another thing you can consider while selecting a cryptocurrency to invest in is the source of energy. If the cryptocurrency uses a renewable or sustainable form of energy, you can consider supporting it safely. Another way to decide upon cryptos to win you can opt for some sustainable coins such as the Solar Coins, Cardano, and Stellar.
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A lone wolf by definition, a writer by heart, and a lost star with ambitions to light up the dark both inside and around me, sometimes by immersing myself into books or video games or traveling with a backpack to an uncertain destination believing that life is all about the choices we make and we don't.