It is raining digital money in the crypto world, despite the tremendous amounts of energy consumed by cryptocurrency networks. While some investors are still reluctant to invest in the swelling crypto market due to environmental concerns, many have embraced the raging trend with a number of crypto companies sprouting up in the past decade or so.
The smooth working of a blockchain network requires a global network of computers to work in tandem. Massive computing power is required for mining — the process through which transactions are verified and added to blockchain networks that use Proof of Work (PoW) — which in turn affects the environment by increasing carbon footprint. This is, however, not hampering the steady growth of the crypto market in India. According to an article published by Bloomberg, the market in the country grew from $923 million in April 2020 to around $6.6 billion in May this year, though it is not an organized sector.
Ethereum was founded in 2013 by Russian-Canadian programmer Vitalik Buterin, who has been advocating for the adoption of a more environment-friendly approach to mining since 2015. According to a report published by Cambridge University, the bitcoin network consumes around 121.36 tWh a year, which is equivalent to the energy Argentina consumes and far more than the consumption by the Netherlands (108.8 tWh) and the UAE (113.20 tWh).
This is the reason why Tesla’s Elon Musk lambasted Bitcoin after buying bitcoins worth $1.5 billion earlier this year in March. Tesla had started accepting bitcoins as a mode of payment but the company recently announced that it would no longer do so. The transaction has surged the price of bitcoin. Musk recently took to Twitter to respond to a post alleging that he manipulated the market, stating: “Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market. When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.”