Around 2009, Satoshi Nakamoto — alias for the creator — released bitcoin into the world, changing how currency is looked at forever.
Twelve years later, Bitcoin’s average price, as of October, was $48,162.71, according to Coinbase.
Due to the wild success Bitcoin has been able to achieve, there are now multiple cryptocurrencies. Ethereum, Binance Coin, Cardano and many more. It’s the Wild West.
Here’s the issue. If someone were asked what exactly the currency is, there would be more questions than answers.
They’ll probably use phrases like “Don’t ask what crypto is, ask what it can do for you,” trying to sound like the next Mark Zuckerberg.
In simple terms, cryptocurrency is a digital currency that isn’t backed by a government or a bank. Crypto uses the technology known as blockchains, which spreads out its workload onto other users’ computers. It is designed to remove the banks out of the equation.
The appeal of cryptocurrency is that it removes banks as the middleman. Owners of cryptos don’t have to deal with the fees that come with banks. Third-world countries have been looking at cryptocurrency as their ticket to prosperity.
For example, El Salvador has become the first country in the world to make Bitcoin legal tender. The government of El Salvador believes this is an investment for the future and will help Salvadorans who don’t have access to traditional financial services.
El Salvador’s trust for the adoption of Bitcoin has $150 million in reserves of Bitcoin and is being managed by the Bank for the Development of El Salvador, according to Global Construction Review.
Global powers like the U.S. are trying to regulate it, or even outright ban it, like China did back in September to make room for its crypto — the digital yuan.
Crypto does have some positive aspects that equal out the playing field for many people around the world. But it needs to address its effect on the climate if it wants to be a serious solution to wealth inequality.
There are massive warehouses across the globe full of computers with the latest hardware, mining crypto 24/7. This is a significant waste of electricity.
Bitcoin has a carbon footprint of 90.19 Mt CO2 as of Nov. 9, that’s equivalent to the country of Chile, according to Digiconomist’s Bitcoin Energy Consumption Index. The year isn’t even over yet and it has the electronic waste of the Netherlands.
This is just Bitcoin. It doesn’t account for Ethereum, the second-biggest cryptocurrency, or others.
A single transaction with Ethereum consumes as much electricity as an average U.S. household uses in a workweek, and has a carbon footprint equivalent to 140,893 Visa credit transactions, according to a report done by Fortune.
There have been promising developments by the developers of Ethereum involving transitioning the already existing blockchain to a new system that would virtually eliminate the negative effect on the environment. That would make Ethereum the “green” option for crypto.
This is a great development for Ethereum, and would probably be a great advantage for it to overtake Bitcoin as the largest cryptocurrency in the world.
But, there isn’t enough time to let the market play this one out.
An assessment report by the Intergovernmental Panel on Climate Change said, “Many changes due to past and future greenhouse gas emissions are irreversible for centuries to millennia, especially changes in the ocean, ice sheets and global sea level.”
It’s not a matter of preventing climate change at this point. It’s about lessening the effect.
If this new system — Ethereum 2.0 — is game-changing, it should be shared with all developers of cryptocurrency so it can become the new standard for the industry.
Cryptocurrency needs to become greener if it wants to achieve its intended goal of bringing opportunities to the less fortunate — once it achieves that goal, then everyone can hop on and go to the moon.
