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Seeing green in crypto

Seeing green in crypto

21-10-2021 | Daily sketch

This week, the US Securities Exchange approved the first exchange traded fund linked to a cryptocurrency, in this case Bitcoin futures. As cryptocurrencies continue to expand into mainstream finance, the environmental impact of the asset class will come under additional scrutiny. According to Digiconomist, the annualized electricity consumption of Bitcoin is currently 178 Terawatts, comparable to the total power consumption of a small country like Poland. The carbon footprint of Bitcoin is roughly equal to that of the gold mining industry, an asset class more than ten times larger. However, Bitcoin is not the only cryptocurrency and process improvements will lower energy requirements over time. For instance, where a single Bitcoin transaction is estimated to consume nearly 1,800 kilowatts of energy, a single Ethereum transaction consumes just under 180 kilowatts. Further, Ethereum’s expected shift from proof-of-work mining validation to a proof-of-stake process will reduce further the currency’s energy needs. While there is no Moore’s law for gold mining, technology has consistently demonstrated exponential improvements in speed and efficiency.

Source:Digiconomist Bitcoin & Ethereum Energy Consumption Index, October 2021
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