Cryptocurrency impact on Environment – UPSC GS3

  • In 2019, the global cryptocurrency market was approximately $793 million. It’s now expected to reach nearly $5.2 billion by 2026.
Events that indicate increased adoption of Cryptocurrency:
  • Goldman Sachs started trading Bitcoin futures trading.
  • Tesla invested $1.5 billion in Bitcoin.
  • PayPal announced that it would allow its U.S. customers to use cryptocurrency to pay its millions of online merchants.
  • El Salvador became the first country to make bitcoin legal tender.
  • Big-name brands like AT&T, Home Depot, Microsoft, Starbucks and Whole Foods now accept bitcoin payments
How is Cryptocurrency contributing to carbon emissions?
  • Bitcoin’s total annual power consumption to be around 204.50 terawatt-hours, equivalent to the power consumption of Thailand.
  • Minting of digital artworks as NFTs (Non-Fungible Tokens) is also done through Ethereum Blockchain, through a process called proof-of-work (PoW), which establishes its unique identity. The electrical energy footprint of a single Ethereum transaction is about the same amount as the power that an average US household uses in 8.09 days.
  • Crypto mining is highly energy intensive.
  • Rising prices of crypto is leading to more mining.
How government has responded?
El Salvador has announced the use of geothermal energy to power its bitcoin mining.
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