Disclaimer: The text below is a publicity piece that was not written by Cryptonews.com journalists.
After Elon Musk’s tweet Announcing that it would stop accepting Bitcoin as a means of payment in May 2021 due to environmental concerns and a ban on Bitcoin mining by some governments, Bitcoin fell 6% on the same day and raised a number of environmental issues.
The CEO of Tesla had stated that he was very concerned about the increasing consumption of energy and fossil fuels required to run the Bitcoin network. Although he is a huge fan of this technology and believes that it represents the future, he will not accept Bitcoin until it becomes greener energy and is even considering looking for other cryptocurrencies that consume less energy.
Therefore, we can wonder if Elon Musk’s statement is legitimate or if it is just a marketing move or even market manipulation. What if there is a viable alternative to carry out this “green” revolution?
The ecological impact of cryptocurrencies
First of all, it is important to understand that it is not the cryptocurrencies that are polluting, but the mining process and the energy they use.
We must draw a line between two types of consensus for cryptocurrencies: those based on the so-called PoS process (proof of stake) and others based on PoW (proof of work) to make their networks work.
The former pose no particular problems, they have a negligible effect on the environment. In fact, the principle is that you “lock” your capital or a portion of your capital for the duration of your choice to confirm a lock, resulting in the earning of a reward (the fees). A new implementation that is quite admirable.
However, PoW-based cryptocurrencies require increasingly “complex” calculations to validate a block. The competitive nature of this system therefore rewards the most advanced machines that need to be constantly changed to keep up to date, which represents a huge waste and contamination of components, discarded once they become obsolete and specifically the ASIC hardware; the most famous mining hardware for cryptocurrencies, which unlike other computing components cannot be reused for other purposes.
This waste amounts to more than 12,000 tons of electronic waste a year, according to Digiconomist.
But that is still nothing compared to electricity, the main source of pollution through carbon emissions that is used is increasingly important.
It is a real business; some refer to it as the process of “turning energy into money.” Through the famous entrepreneurs who set up “mining farms” and others even reach the countries where electricity and rents are the cheapest. Unsurprisingly, the highest concentration (65%) of these farms is in China, which runs primarily on coal (with its high carbon dioxide emissions) and has recently been using fossil fuels, despite the fact that China just banned Bitcoin. mining.
According to CNBC, the Bitcoin network uses as much energy per year as a country like Argentina. And it also emits more than 36 million tons of carbon dioxide each year, the same amount as New Zealand.
So how do we deal with this huge threat, and what alternatives should we consider?
A new green generation of cryptocurrencies
Some projects are turning to renewable energy, commonly known as the “green cryptocurrency revolution” and unsurprisingly. It doesn’t necessarily cost more and isn’t subject to seasonal fluctuations, like in China when they had to transition to fossil fuels during the dry season.
But is using renewable energy the only thing we can do right now?
No, as projects like EnergyFi show.
The EFI token works using PoS (proof of stake) that does not require complex machines to solve the blocks as in the case of PoW, so this new approach allows cryptocurrencies to work without mining.
If we talk about it because it is part of the projects that can “speed up” this revolution, because it is more than a cryptocurrency but an entire ecosystem.
In fact, it allows any novice creator (or seasoned developer) to launch their own cryptocurrency and even fundraise (EnergyPad) on a sustainable and green network and list that same cryptocurrency on their decentralized trading platform (DEX).
For their part, token hodlers will be able to receive automatic passive income, use their tokens within EnergyFi services, including reduced fees for using the exchange platform or access to loans through EnergyLend.
This approach shows that it is not necessary to compromise our planet to develop a successful blockchain-based ecosystem and that it remains just as profitable for investors through the reward mechanisms they are betting and cultivating (via EnergySave).
Perhaps this project will even attract the attention of companies like Tesla that are looking for cryptocurrencies that consume less than 1% of the total energy used by the Bitcoin network to be able to accept this type of payment again?
The bottom line is that cryptocurrencies and the underlying technology (the blockchain) are quite revolutionary, and this technology will become a part of every aspect of our lives, even more than the internet, but at what cost? In fact, we need clean alternatives like EnergyFi to take this technology to the next level.
And there is a lot of work to be done, as only 39% of mining is done using renewable energy. So we think Elon Musk did the right thing by issuing this ultimatum before it’s too late.
You can find all the information about this ecosystem on the official EnergyFi website: https://www.energyfi.io/
So, make a difference and be part of the green revolution today with EnergyFi.