Technological advancements have resulted in expanding the use of cryptocurrencies on a large scale. Bitcoin is a type of cryptocurrency that gained huge popularity due to its fluctuating prices. In the past few years, several miners, researchers, and analysts were minutely analyzing the functions of Bitcoin. According to Alex de Vries, from PwC, Netherlands, Bitcoin is likely to generate electronic waste as a small nation. As energy consumption is excessively high, renewable energy facilitates the mining process. The mining mechanism of Bitcoin is a primary concern, as miners do not always receive Bitcoin currency after carrying the transaction.
Tracking Challenges in Nascent State Might Change Growth Dynamic of Bitcoin
Alex de Vries finds the existence of significant difficulties in the computational power of the Bitcoin network. These difficulties mainly consist of issues wherein it might be difficult to rely on renewable energy. This implies that once a Bitcoin machine starts working, it is not possible to shut it down until it fails to continue operating profitably. Moreover, hydropower might support the working of Bitcoin generation. However, the energy flow is not constant, consequently interrupting Bitcoin transactions. Therefore, renewable energy used for Bitcoin mining is not considered as a green energy.
Additionally, a popular machine only used for mining Bitcoin named Application-Specific Integrated Circuit (ASIC) miner, also has an adverse impact on the environment. Currently, Bitcoin generation is creating a huge amount of electronic waste.
Bitcoin is still in its nascent stage, but its electronic waste generation and energy consumption are not negligible. With time, the demand for Bitcoin is foretold to increase, which will further increase these concerns.
An alternative “proof-of-stake” mechanism to mine Bitcoin can address sustainability concerns, opines de Vries. Currently, NXT and Dash cryptocurrencies do not depend on computing power to build the blockchain system. Implementing this alternative would reduce Bitcoin’s energy consumption by a staggering 99.99%. It can also remove the need for non-repurposable and specialized hardware.