Are Environmental Impacts Causing People To Hold Back from Crypto-Mining?
Although cryptocurrency has undoubtedly increased in popularity over recent years there are still some factors that are causing people to hold back from using it. There are many different reasons for this, but the environmental effects of mining for cryptocurrency are definitely at the forefront of many people’s minds. Whether this will be a long-term effect is yet to be seen, but it is something that those interested in investing in cryptocurrency should be aware of and take into account.
The Environmental Impact of Cryptocurrency Mining
To most of us, we assume that because cryptocurrency is a digital product it can’t really have too much effect on the environment, however, this is not the case at all. NFT (non-fungible token) and Bitcoin both generate carbon emissions at a high rate, when people are mining for them. To put this into perspective you can either carry out a Bitcoin transaction or watch YouTube for over 51,000 hours for the same level of carbon emissions. You can create an NFT or drive around 500 miles in an average petrol car and create the same carbon footprint. With more people becoming aware of their own environmental impact and trying to live a more sustainable life, these statistics are likely to have an impact on how many people want to use Bitcoin.
The issue of a large carbon footprint being created by cryptocurrency isn’t a new one. Hal Finney, a computer scientist who received his first Bitcoin back in 2009 raised the issue then. However, it wasn’t until 2017 that the issue really became known to a more mainstream audience.
The worry is the carbon emissions can only get higher – as the value of cryptocurrency increases, the more competition this creates and therefore the more energy it consumes. For example, the computer power needed to mine Bitcoin in 2019 was 4 times as high as was needed in 2018 – which is a massive increase. According to the University of Cambridge in 2020 around 76% of miners used renewable sources of electricity. However, realistically we have no way to know where miners are getting their power from, especially those that move their rigs to places such as China, where power is cheap by renewable energy isn’t.
Is Cryptocurrency Becoming Mainstream?
Despite the reluctance of some to get involved in cryptocurrency, there can be no denying that it is increasing in popularity. For example, since the start of 2021, there have been a number of banks announcing that they will now support the trading of cryptocurrency via their banking platforms. Goldman Sachs even announced that they would soon be launching a cryptocurrency to allow their traders to get involved. It isn’t just financial institutions that are contributing to digital currency becoming more mainstream Tesla and Elon Musk recently announced that they would be accepting Bitcoin as a payment method for their cars in the US.
Not ones to be left behind, PayPal also recently announced that their online payment platform in the US would accept Bitcoin, Ethereum and Litecoin, Allowing its users to buy, sell and trade the digital currency via the PayPal app. With PayPal being such a mainstream payment provider this has most certainly introduced the idea of digital currency to a much wider audience.
The gaming industry has embraced cryptocurrency too, with many international casinos now accepting it as a method to top up your account. In order to keep up with customer demand, casinos like those found at TopRatedCasinos.co.uk have started offering a much wider range of payment methods over the past few years. This started with offering various top-up and withdrawal methods and then expanded to different currencies. With online casinos keen to reach a wide audience it stands to reason that they are going to want to do what they can to attract users from all over. Allowing people to use the casino in their desired currency is one way of making the casino more accessible and user-friendly for its users.
Over recent months online casinos have clicked onto the increasing popularity of Bitcoin and many have started to allow Bitcoin to be used on its platforms. This is just another way that the gaming industry has adapted over recent years to ensure they keep up with the needs of their audience and customers.
What Does This Mean For Investors?
There is no denying that environmental impacts are something that many customers think about when choosing products. We have seen an increase in the use of renewable energy, recycled household items and sustainable clothing. When you consider the fact it takes around 2700 litres of water to make a cotton t-shirt you can understand why this would be a concern to many.
However, despite this fact – there are still large numbers of cotton t-shirts manufactured and purchased each year. There is clearly still an audience for the product despite the known impact on the environment. This is likely to be the case for Bitcoin and other digital currencies. There will of course be people hesitant to use or invest in the currency due to this, but there will be a larger audience that will still be interested in the future of Bitcoin.
From an investment point of view, there is no way of knowing what the future holds. Different financial experts will certainly be happy to give you their opinions; however, this is going to be different depending on who you speak to. One thing you can be certain of is that there will be more brands coming out in support of Bitcoin and offering it as a payment method on their platform.
The more brands that do this, the more popular Bitcoin is going to become, which could well mean an increase in value. Previously investing in things like digital currency have been seen as something elite but if brands start to offer this and as people get more used to seeing Bitcoin mentioned but platforms they are already familiar with, the more likely they are to feel comfortable in investing.