Crypto’s mainstream adoption has not only unleashed a new paradigm for global finance, but also raised a fresh set of concerns for its sub-ecosystem, crypto-mining. In order to uncover the truth behind the impact of digital mining, Peter McCormack interviewed University of Cambridge’s Michel Rauchs to discuss the institution’s research on Bitcoin’s power consumption and carbon footprint.
McCormack began by claiming that Bitcoin gaining mainstream attention has resulted in many in the media directly comparing its electricity usage with global mining activities and nationalities, in an effort to magnify the former’s negative impact on the environment. While on this topic, Rauchs said,
“If regional governments try to create disincentives like subsidies and raising taxes, miners will just naturally leave to another place with low costs and electricity in high abundance. And that’s fine.”
Further, the duo discussed Bitcoin mining’s environmental footprint, stressing on its direct relation with the electricity generation process. Rauchs shares the belief that a transparent analysis will alleviate a lot of concerns currently raised by regulators and policymakers. He added,
“That might prevent them (regulators) from taking too restrictive measures that they might have taken otherwise based on, you know, sparse or incorrect information.”
The conversation also touched upon how vague figures about crypto’s environmental impact compliments “a politician’s short-term vision” as well, something which can only be tackled by constantly analyzing real-time data. While the mining industry thrives on a predetermined reward system, the difficulty level stays at par with technological advancements, in terms of hardware requirements. As this mechanics gains efficiency, Rauchs shared,
“You could see an increase in hash rate, but with a lower proportional increase in energy consumption.”
The discussion also highlighted the mainstream media’s intention to mislead vulnerable users and government officials. Although traditional markets have started raising red flags while citing cryptocurrency mining’s environmental impact, McCormack and Rauchs cautioned enthusiasts to steer away from such generalized notions.