Cryptocurrency mining and ecology: two incompatible notions?

While environmental issues are in the spotlight, the ecological impact of cryptocurrency mining is also becoming a major issue. One of the best-known cryptoassets, Bitcoin, is even the archetype of energy-intensive cryptos.

In light of this awareness, the launch of the Terra Pool project by DMG Blockchain Solutions and Argo Blockchain is innovative in reducing the ecological footprint of cryptocurrencies. Initiating the first green mining pool, these companies hope to revolutionize the impact of Bitcoin on our planet.

We unravel for you the unsuspected effects of cryptocurrencies on the environment and the less energy-consuming initiatives put in place.

The impact of cryptocurrencies on the environment

The over-consumption of electricity in this sector comes from the fact that most cryptocurrencies list each of their transactions in a dedicated public ledger. This is known as blockchain technology or blockchain. This certainly guarantees complete transparency, but requires monitoring by miners, and therefore the resolution of mathematical problems that require powerful computers.

Thus, the heavy ecological consequences of cryptocurrencies come mainly from mining, directly related to the work of a large number of very powerful computers and therefore very energy consuming. Problem: cryptocurrencies will tend to become more democratic in the near future and, therefore, have a greater impact on the environment.

The case of Bitcoin mining

Why does Bitcoin mining have such an impact on the environment?

Mining is necessary for the very existence of Bitcoin, without it this cryptocurrency would not exist. Thus, miners, whether they are companies or individuals, create blocks and receive bitcoins in exchange for their activity. This is called "proof of work". This guarantees the decentralization and security of the network, but requires a lot of computing power.

If Bitcoin is one of the most popular cryptocurrencies in the world, it is not a coincidence. In February 2021, 1 hour of computation could earn miners $4 million, according to analytics firm Glassnode. In fact, to ensure the security of the network, 6.25 bitcoins are created every 10 minutes. These can be collected by any of the miners in the network. Thus, mining farms, composed of thousands of super-powerful computer systems are multiplying. They have really imposed themselves in the world scene to guarantee a global service.

In addition to that, the energy consumption of Bitcoin is related to its price. You should know that its value has increased fivefold in one year!  This attracts new miners equipped with computers that are as powerful as they are energy-intensive. See the current Bitcoin price.

The ecological cost of Bitcoin in figures

Bitcoin mining requires a large amount of electricity. It is true that renewable energy is becoming more common in terms of power plants. Unfortunately, this is not enough to offset the ecological impacts of this cryptocurrency. Here are a few highlights that illustrate Bitcoin's burden on the environment:

• For every Bitcoin transaction, almost 661lbs of carbon dioxide (CO2) is emitted. That's according to data specialist at the Dutch Central Bank Alex de Viries.
• Bitcoin mining is centered in certain countries. This causes a concentration of energy consumption in specific locations around the globe. For example, China alone is home to 65% of the world's mining activity. This is truly problematic as the country's electricity comes mostly from fossil fuels.
• At this rate, Bitcoin mining will exceed 296 terawatt-hours of electricity consumption in 2024 in China, according to a recent study in Nature Communications.
• A Bitcoin transaction alone would require nearly 707 kilowatt-hours of electrical energy. This is equivalent to the electricity consumed by an average household in the United States for 24 days.

Faced with this reality, Bill Gates said in a New York Times interview in early March:

“Bitcoin uses more electricity per transaction than any other method known to mankind”.

The billionaire even added that this cryptocurrency requires more electricity for each transaction than any other process.

Less energy consuming alternatives

The Terra Pool Project

To reduce the impact of Bitcoin mining, DMG Blockchain Solutions and Argo Blockchain have set themselves a challenge. They have chosen to create the first Bitcoin mining pool powered entirely by green energy, in particular hydroelectricity.

Initiated by true experts in the world of crytpos, this new project has something to surprise many. Indeed, Argo Blockchain is a major player in bitcoin mining in North America. As for DMG Blockchain Solutions, it is a company that creates environmentally friendly digital solutions, with the aim of monetizing the blockchain environment. It is therefore a promising alliance that has been created for this far-reaching innovation. The Terra Pool project would reduce the energy consumption of Bitcoin mining, without compromising transaction speed.

Initiators in this field, the two companies hope to awaken an ecological awareness in the field and encourage other firms to do the same.

Eco-friendly solutions for cryptocurrency mining on the rise

Other more environmentally friendly solutions had already been implemented in the wake of ecological awareness. Indeed, several crypto-currencies such as Tezos or EOS have decided to adopt a less energy consuming validation mode, such as proof of stake. Others, little known to the general public, have already thought about alternative modes of operation, less energy consuming and a strong commitment to the environment. This is, for example, the objective of SolarCoin (find its full presentation on our site here: is is, for example, the objective of SolarCoin (find its full presentation on our site here: learn more about Solarcoin), which aims to financially support projects related to the energy transition. Another cryptocurrency of this type is the ECO coin, which financially rewards a person for their efforts towards sustainable development.

But these types of initiatives are still far from offsetting the impacts of larger cryptocurrencies like Bitcoin. It remains to be seen how the Terra Pool project evolves and whether it can really change the energy burden of the most prized crypto-currencies. So, we'll keep an eye on it…