Students should be conscious of the environmental impact of cryptocurrencies and NFTs they may invest in and explore eco-friendly cryptocurrencies to combat harmful crypto mining processes.
With the rising interest and investment in cryptocurrency, environmentalists are offering the public evidence on the carbon emissions and energy-intensive processes of cryptocurrencies, such as Bitcoin and Ethereum.
Younger age groups are more likely to trade or use a cryptocurrency as 31% of people aged 18 to 29 reported investing, trading or using a cryptocurrency.
According to the Pew Research Center, young adult men are more likely to engage with cryptocurrencies than their female counterparts, as 48% of men aged 18 to 29 stated they utilized cryptocurrency compared to 19% of women within the same age range.
Environmental organizations and activists are signaling ecological concerns due to the current unregulated nature of cryptocurrency. Such currencies are digital and decentralized, with many government officials worldwide debating the financial regulation of cryptocurrency; environmentalists continue to advocate energy and ethical regulation of such currencies.
The current state of cryptocurrency is unsustainable. According to the New York League of Conservation Voters, cryptocurrency is arising as a “heavy greenhouse gas emitter, contributing to air and water pollution,” which directly threatens worldwide commitments to reduce carbon emissions.
The reason cryptocurrency is incredibly labor and energy-intensive is because of crypto mining. Cryptocurrency mining is a method or strategy of earning cryptocurrencies as a reward for solving intricate mathematical and computational problems.
Although crypto mining is difficult, it allows anyone to mine coins or crypto rewards for free. The biggest cryptosystems employ crypto mining, such as Bitcoin, Ethereum and Dogecoin.
It is hard to process how a digital transaction can cause environmental harm. Every digital process consumes energy, and even traditional digital banking companies such as Capital One consume vast amounts of energy. However, the impact of cryptocurrency should not be undermined as crypto mining is energy-intensive.
As one of the most popular cryptocurrencies, Bitcoin has a high energy demand and thus high energy consumption. According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin’s electricity consumption is exhaustive enough to surpass the energy consumption of countries like Malaysia and the United Arab Emirates.
According to the New York League of Conservation Voters, a substantial reason for Bitcoin’s growing carbon emissions is Bitcoin’s stationing of their mining faculties in old or overused power plants to utilize excess energy to help sustain the currency’s high-energy demands.
The rise of cryptocurrencies subsequently led to the popularity of NFTs. NFTs contribute to the crypto industry’s environmental impact and harm. NFTs are typically minted with cryptocurrency. Every transaction is processed in a blockchain, and sellers are paid in Ethereum, according to Earth Org.
To combat the unsustainable long-term energy consumption of cryptocurrencies, businesses, environmental organizations and activists are creating and endorsing sustainably energy-efficient cryptocurrencies, such as Cardano and Chia, according to Earth Org.
Over the course of three years, the rise of cryptocurrencies and NFTs have deeply impacted how young adults engage with investing and financial portfolios. However, students should reflect on whether digital currency and trading are worth environmental degradation, and pursue eco-friendly cryptocurrencies as an alternative.