Bitcoin uses almost as much electricity as all of Sweden in one year

There are quite a few drawbacks to cryptocurrencies and NFTs. They both consume an incredible amount of energy. According to a study, they sometimes even consume more energy than all of Sweden in one year. In this article we therefore dive a little deeper into the sustainability of the cryptocurrency and the NFTs and we look at whether there may be solutions.

The problem: 402 kg of CO2 emissions per transaction

A study by De Nederlandsche Bank (DNB) shows that cryptos, and specifically Bitcoin transactions, have a major impact on our climate. The first results from the study show that an estimated 402 kg of C02 is used per Bitcoin transaction. Now individual figures mean nothing, and they only gain value if you can compare them. Fortunately, the DNB has done that. An average family in the Netherlands uses 611 kg of CO2 per month. This means that per Bitcoin transaction as much C02 is emitted as an average household would do in 20 days.

And then we are not there yet, these figures are for the year 2020, the DNB expects emissions to become even higher. On top of this comes a study conducted by the University of Cambridge which states that Bitcoin and Ethereum, one of the two largest cryptocurrencies, use twice as much electricity in one year as all of Sweden does.

‘There should be a ban’

The study by De Nederlandsche Bank looked specifically at Bitcoin. This is a crypto that uses algorithms that consume a lot of energy. This is due to the so-called ‘mining process’ they use. This is the process that ensures that new transactions can be verified and made. This process is carried out by a gigantic network of computers, which together use an enormous amount of energy. Incidentally, this process also roughly takes place with NFTs. Again, many computers have to ‘run’ to manage, store and verify these. In the podcast ‘De Dag’ of the NOS, data scientist Alex de Vries reports that he estimates that more than three million computers are currently actively processing cryptocurrency. According to him, this network consumes at least as much electricity as the whole of Argentina.

Now, not all cryptocurrencies are based on this algorithm, and it is these cryptocurrencies that consume less energy. And to return to Sweden for a moment. The Swedish financial regulator, the body responsible for financial regulation in Sweden, is calling for a ban on cryptocurrencies that use the energy-guzzling algorithms discussed above.

The solution? These techniques consume less

There are alternative techniques that, according to this Swedish financial regulator, can consume as much as 99.95% less energy. These are alternatives that, for example, ensure that transactions are approved more quickly, so that computers do not need to use energy for this for as long. Or crypto coins that use other codes that can ensure that transactions can be performed independently. This also saves time, because transactions of these crypto coins can be carried out in a few seconds. In comparison: Bitcoin often takes a few minutes. Examples of these cryptocurrencies are Ethers and Bitcoin Cash.

A disadvantage of these two is that they are used much less and therefore can be spent in fewer places. But maybe we should all put an end to that? That we all decide, if you really want to trade in cryptocurrencies, you choose a more sustainable variant. In any case, the investor has an important share, he or she should switch to greener alternatives and choose not to invest in crypto coins that use mining processes anymore. All this to ensure that cryptocurrency becomes more sustainable and mining processes disappear.

What do you think? Let us know in the comments below this article.

Do you have tips or ideas for the crypto week?

This week Androidworld is all about cryptocurrency. We therefore declare this week ‘Cryptoweek’ in which we would like to make you world-wise in this digital world. We discuss useful apps, provide you with tip and explanation articles and also look at the ‘dangers’ that can be around the corner. We have already written several articles about crypotcurrency, a selection of which can be found below.

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