Sustainability has emerged as a pressing concern in the cryptocurrency industry. As crypto popularity grows, the energy consumption and environmental impact of crypto mining are growing. The good news is that crypto mining can become more sustainable and lessen its environmental impact. This article will explore ways to make crypto mining a more sustainable venture. Let’s dive in:
Shifting to renewable energy sources
Cryptocurrencies are infamous for wasting electricity because crypto mining is energy-intensive. Renewable energy sources play a huge role in making crypto mining more sustainable and cutting down on the high carbon footprint in production.
Countries such as Iceland, Sweden and Norway have become top mining destinations due to their large hydro, wind and geothermal power volumes. Meanwhile, mining operations like Genesis Mining and Aspen Creek Digital Corporation are already adopting renewable energy-based mining. Meanwhile, energy use transparency and sustainable mining are being promoted by groups such as the Bitcoin Mining Council worldwide.
Renewable energy sources reduce the carbon footprint, increase air quality, increase mining profit, and promote lower land pollution.
Greener consensus algorithms
Proof-of-Work(PoW) consensus has been known to be notoriously energy-consuming. The crypto industry transitioning to mechanisms with less energy will release fewer greenhouse gasses, hence increasing sustainability.
Proof-of-Stake(PoS), the second most used consensus algorithm, is an eco-friendly alternative. PoS is less energy intensive as it distributes the mining among validators to validate transactions based on the percentage of tokens staked by the validator. Ethereum recently shifted from PoW to PoS, which allowed it to cut energy usage by more than 99%. Furthermore, validators do not require specialized equipment to receive rewards.
Apart from Proof-of-Work, there are other greener consensus algorithms, such as proof of history, proof of capacity, and proof of elapsed time.
Offset carbon emissions
Crypto projects transitioning to proof of stake and other greener consensus algorithms might take time and money. Instead, there is the option of offsetting their carbon emissions which is a more immediate move.
Projects can offset carbon through tree planting and landfill management programs, among others. Some projects, such as Solarcoin, are already rewarding users for their green actions. Bitgreen also rewards users for volunteering, drinking eco-friendly coffee, and carpooling.
Co-location with renewable energy facilities
Co-location involves locating and operating mining equipment in a shared data center or facility built for mining operations. It consists in renting space, power, cooling and security resources from the hosting provider. Crypto miners bring their mining equipment, like ASIC (Application-Specific Integrated Circuit) miners and GPUs (Graphics Processing Units), to a hosting facility, which then takes care of the mining.
Co-location facilities with renewable energy facilities contribute significantly to making crypto mining more sustainable. Renewable energy facilities are increasingly becoming more reliable and stable power sources. By co-locating with these facilities, miners benefit from a consistent energy supply from sources such as solar and wind that can be harnessed around the clock, allowing for continuous mining operations without disruptions. In addition, it reduces the cost of setting up their sustainable crypto-mining operation and saves time.
Overall, renewable co-location energy facilities generate electricity with minimal gas emissions; hence miners can significantly reduce their carbon footprint.
With adequate government support, the crypto industry can move towards a more sustainable direction. Some laws have come up that favor sustainability, such as the federal solar tax credit, which allows a 30% reduction for solar energy installation. This law incentivizes miners to move to greener sustainable energy. In addition, the law also allows solar energy to be sold back to the grid for more income.
Investing in environment-friendly cryptocurrencies
Newer cryptocurrencies have incorporated renewable energy in their operating model to reduce energy consumption. Cardano is a PoS crypto built by one of the Ethereum co-founders. The cryptocurrency allows people to purchase Cardano units to become members of the network instead of mining new coins, reducing the energy that would otherwise be used.
Stellar is an energy-efficient blockchain network that relies on trusted nodes to authenticate transactions. On the other hand, Nano uses “blockchain lattice” technology, which creates user blockchains for users on the network. Platform transactions are authenticated using Open Representative Voting(ORV), whereby representatives voted by network members act as validators. Users can transact peer-to-peer on their blockchains instead of using them on the main network blockchain, lowering the time and energy used.
Gridcoin uses power from idle computers connected to the network for scientific research. The network utilizes the Berkeley Open Infrastructure for Network Computing (BOINC), uses proof of stake, and rewards users with a proof-of-research algorithm.
Hedera Hashgraph is popular for its fast transaction speed, higher than Visa, and low energy consumption. Transactions on the network are processed in parallel instead of linearly, which allows Hedera to make up to 100,000 transactions per second.
Sustainability in crypto mining is a necessity and an achievable goal. Crypto mining can become more sustainable by integrating renewable energy, regulation and transitioning to greener consensus algorithms. Through these methods, crypto miners can reduce carbon emissions, optimize energy consumption, and create a more sustainable future for the crypto-mining industry.