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Is cryptocurrency going green?

| Sep 22, 2021 | Business & Commercial Law

There’s an almost constant “buzz” in the news about one cryptocurrency or another — whether it’s Bitcoin, Ethereum, Dogecoin or something else.

Despite the potential for blockchain to change the world (and the way the entire world does business), there has been a growing furor over the environmental cost that goes into the creation of cryptocurrency.

Cryptocurrency isn’t as bad for the environment as it was

According to data from Cambridge University, the carbon footprint caused by crypto mining has fallen dramatically in the last six months. That’s thanks, in large part, to the actions of the Chinese government, which first started to express concerns over Bitcoin’s effect on its financial stability back in 2013. In June of this year, the government in Beijing ordered banks to close the accounts of anybody involved in cryptocurrency transactions.

How did that improve the carbon footprint for crypto mining in general? It took about half of all Bitcoin miners offline and shut down a lot of older, inefficient equipment that was being used to produce the blockchains. Those shutdowns are likely permanent.

Increasingly, cryptocurrency miners are migrating to cheaper, renewable sources of energy. That’s a win for both the miners (who reduce their overhead production costs) and the environment as a whole. Miners typically operate at a very low profit margin, and the only variable is usually their energy costs, so that provides an automatic incentive to turn toward renewable sources.

If you’re contemplating cryptocurrency mining, you’re not alone

The United States is the new stomping grounds for many crypto miners, moving from fifth place in the world’s productions into second place virtually overnight. Whatever your crypto aspirations, keeping green goals in mind is essential to your company’s future.