Is Energy Consumption of Cryptocurrencies Overrated?

Is the energy consumption of cryptocurrencies overrated? Do crypto assets consume as much energy as mentioned? We will look for answers to these questions in the article of Furkan Uyanık from Limenya.com.

Recently, one of the most discussed topics of the cryptocurrency world has been the energy consumption of crypto assets. While some complain about the energy consumption spent during the mining of cryptocurrencies, others argue that the electricity used by the cryptocurrencies remains like a miniscule compared to the energy consumed by the global economy. According to studies, the Bitcoin ecosystem uses only 10 percent of the energy used by traditional banking systems. However, it is obvious that the cryptocurrency world is costly as it grows, like every newly growing sector. Bitcoin Developers Can Offer Solutions It is stated that the cryptocurrency mining industry, which earned $1.4 only in February 2021, does not do much harm to the environment, especially compared to other areas of modern life in industrialized societies. Critics say that the solution to this can be found by Bitcoin Core developers, and that the most ideal solution will be reached by revising and updating the software in a way that consumes less energy. According to the University of Cambridge's Bitcoin Electricity Consumption Index, with their energy consumption of around 130 terawatt-hours, Bitcoin miners account for roughly 0.6 percent of energy consumption worldwide. It is stated that this consumption also shows that the Bitcoin economy has a similar carbon emission as small and developing countries such as Sri Lanka or Jordan, when carbon dioxide emissions are taken into account. Considering Jordan, which has a population of 10 million, it is possible to say that on a monthly basis, although it is impossible to know exactly how many people use Bitcoin, the people of Jordan are used much less than their own currencies. According to CoinMetrics data, 1 million Bitcoin addresses are actively used daily, and when looking at the last 10 years, this number is 106 million accounts. In general, it is said that the number of Bitcoin users is too high to be underestimated. In addition, it is known that most of the energy spent while producing Bitcoin is met from sources that have minimal damage to the environment, such as hydroelectric power plants or natural gas. Uyanık describes this situation in his article as follows: "If it were a cryptocurrency country and its currency was set as bitcoin, it would be the 5th largest economy in the world, right behind Japan, given the market value of bitcoin. This account does not include other major coins such as ethereum." So as a result, the energy consumed by Bitcoin, albeit inefficient, is said to be on par with the consumption of other industrialized financial systems.     Source: Limenya.com