Does the sustainability of cryptocurrencies depend on the mining method?
Recently I was reading the news that Ethereum would abandon traditional mining and that it would already be changing it for the system known as "proof-of-stake" with which it will reduce by 99.5% its electricity consumption.
Etherum changes to a more energy efficient mining model.. Source: Source: pixabay.com.
Quite a bit has been said about cryptocurrencies, especially the Bitcoin network, having high electricity consumption, and with this example being set by Etherum many experts seem to agree that the best solution is to transition to more efficient mining and consensus mechanisms.
Although some blockchains have already considered the low environmental impact approach by resorting to mechanisms that do not need powerful computers, some experts defend the proof-of-work mechanism of consensus and traditional mining, since networks such as Bitcoin whose advantage is their extreme security need powerful computing units, so the solution for these systems is not to change the mining and consensus method but that the electricity they consume comes from renewable energy sources.
The units used for traditional mining consume a lot of electricity. Source: pixabay.com.
In this regard, the cryptocurrency industry has already become aware of the issue and an example of this is the Crypto Climate Accord, an initiative that aims to get the growing crypto sector to use completely renewable energy by 2025 or earlier. The goals of this agreement included developing open source accounting standards to measure emissions from the cryptocurrency industry, so software is being developed to verify the provenance of the energy.
This seems to me to be very encouraging, since we have mainly seen the negative publicity that cryptocurrencies have received due to the high consumption of electricity produced by their mining, especially Bitcoin, which according to some data the entire network of this blockchain consumes electricity equivalent to that produced by countries such as Finland or Chile. The high electricity consumption of Bitcoin was the reason for Tesla to stop accepting it as a payment method last May, so we saw how that, along with Elon Musk's comments, affected its value.
This is certainly a well-founded concern, but it is not the consumption of electricity that generates environmental pollution, but the carbon emissions associated with the way that electricity is produced. So, while it is true that more energy-efficient mining mechanisms are a great help, the solution is not only to change the approach used to produce cryptocurrencies but also to move towards replacing the polluting sources of energy used to produce them.
It is also necessary to advance in the substitution of the energy sources used to produce cryptocurrencies. Source: Edited image, contains public domain images 1, 2.
We already know the great impact that cryptocurrencies have had on the economy, and perhaps what we are seeing is the attack of the traditional financial system on a rival system, taking advantage of the fact that the impact of this system is calculable according to the consumption of the mining machines, something that is difficult to quantify in the whole set of banks and the conventional system. But as the cryptocurrency industry matures it is good that these debates arise to help it evolve into a better and more efficient system.
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