So you’re thinking about throwing your hat into the cryptocurrency ring, eh?
You’ve heard the sensational rags-to-riches stories. Maybe you heard rumors about burned-out rockers or failed surfers who decided on an acid trip of a whim to go all in on some random coin, only to realize years later that they had suddenly became fabulously rich from their “strategic investment in the currency of the future,” or however they’re describing it now.
The point is, the gettin’ is good, and now you think it’s time to get you some cryptocurrency. I mean, who doesn’t want to get rich? Ammaright?
Well, good luck. By all means, knock yourself out. Just remember this moment years later, after we’ve all run out of power and are reduced to clubbing rodents for dinner. And in your campfire-lit misery, remind yourself of the unbridled energy consumption of the Bitcoin that you had hoped would make you a gabillionaire but instead turned you and your friends into cavemen of the future.
I’m being dramatic here. But think of me as a crypto-canary in the proverbial coal mine, warning you that Bitcoin is alarmingly unsustainable and poses a gathering threat to the environment.
That said, I’m also here to tell you there’s a another way. There are greener and more community-oriented cryptocurrencies — including one called Bitcoin Green — that don’t burn through insanely large amounts of energy to run warehouses full of supercomputers that really do nothing but solve pointless mathematical puzzles.
Let me explain.
The problem with Bitcoin, the dominant and most important cryptocurrency, has something to do with a concept called proof-of-work. Without getting too wonky here, proof-of-work is an algorithm used to create new Bitcoin. And built into the concept is this totally bizarre situation in which increasingly complex mathematical problems must get solved in order to make new Bitcoin, a process called “mining.”
The math problems for mining Bitcoin get harder over time, meaning that more and more energy is required to fuel the computers that solve those problems. What’s more, because Bitcoin prices have soared recently, everyone and their mother is trying to get rich mining. Which means you’re seeing wildcat miners scrambling to build warehouses filled with expensive supercomputers from the hinterlands of Mongolia to the Canadian icefields of, well, Canada. Which means yet even more energy consumed.
And in case you’re wondering, the Bitcoin prospectors are like most everyone else involved in the cryptocurrency world. They’re men. And the disproportionately large number of the testosterone-exuding crypto dudes can make things more than a little awkward for the ladies.
“As an investor in crypto, I see an industry that’s dominated by men who tend to have a bro-guy finance attitude,” said Rachel Hawkins, 31, a small business owner who lives in New York City. “It would be nice to find a cryptocurrency community that’s both sustainable and more open to the participation of women.”
So it’s a man bonanza. And so, unsurprisingly, it’s awfully destructive.
Here are a couple of hair-raising statistics. The mining of Bitcoin consumes more energy than Switzerland, or more than 41 out of the world’s 196 countries. A single Bitcoin transaction consumes as much energy as an American home does in more than 30 days.
Some have even gone so far to predict that if Bitcoin-mining growth continues at its current rate, it will consume all the world’s electricity by 2020. Experts worry that the problem risks undermining our transition to sustainable forms of energy, and they warn of shortages that could trigger widening power blackouts and surging fuel prices.
Perhaps scarier, though, is that Bitcoin represents just one of many cryptocurrencies that are based on the proof-of-work concept. If more of them manage to take off like Bitcoin did, then, well, crap. Imagine a massive surge in fossil-fuel-emitting mining warehouses. Then imagine life on Mother Earth as something like being trapped in a club that’s packed with nothing but cologne-radiating dudes from Jersey. Death by AXE body spray!
At this point, I’ve probably depressed you enough.
But I’m also here to inspire you about the cryptocurrency world, for there are changes that promise a sustainable alternative that, I should add, isn’t so man-centric.
The solution to Bitcoin’s energy addiction is something called proof-of-stake. While used for similar purposes as proof-of-work, proof-of-stake doesn’t require warehouses of supercomputers for solving crazy-hard math problems. That’s because proof-of-stake doesn’t really involve mining. The process for creating a new coin is generally referred to as “minting,” and it consumes a fraction of the energy of a proof-of-work transaction. It can all be done on a personal computer.
There’s more good news! More and more up-and-coming cryptocurrencies are using proof-of-stake instead of proof-of-work. One insurgent cryptocurrency has gone a step further, building into its system a sustainable alternative to Bitcoin that involves fair sharing of benefits among those who hold its coin. It’s called Bitcoin Green, and its proof-of-stake system incorporates novel sustainability and group-voting features.
It’s complex, but essentially minters hold their coin as collateral in a so-called staking wallet. You stake in order to earn money from verifying transactions and minting blocks for the blockchain, which is the innovative technology that underpins cryptocurrencies. It’s the threat of losing the collateral you put up in order to stake that proves to the network that you’re not going to try to make fraudulent transactions, and this gets everyone to play by Bitcoin Green’s community-centric rules.
More than this, built into Bitcoin Green is a decentralization governance protocol, which sets in stone that certain percentages of rewards made from the blockchain transactions should go to specific things. This includes funding updates to the technological architecture that underpins the currency along with donations to charitable causes and other endeavors that are in line with the currency’s principles of sustainability and fairness.
What makes the distribution of these rewards exciting is the democratic nature of the Bitcoin Green system. The diffuse networks of servers that manage the system, known as masternodes, can propose ideas and then hold votes over them. This creates a balance where masternodes don’t totally dominate the financial rewards but, rather, work to bring harmony to all those who participate in the system.
This is partly intended to increase the participation of women and other demographic groups into the mostly male crypto community, said Bitcoin Green’s co-founder, Alec Beckman. The hope, he said, is of course making people feel comfortable about the environmental footprint of Bitcoin Green, but also to democratize the process of joining the network to help process transactions — without the need for powerful, energy-sucking computers.
“We want to make this system sustainable, fair and inclusive, because that’s how these currencies should work. They’re not supposed to enrich a few at the expense of the environment. They’re supposed to make storing and transferring value easier and safer,” said Beckman.
So if you’re certain that buying cryptocurrencies is the way to go, do something good for the environment. Do something that promotes community and inclusiveness instead of cowboy Bitcoin miners. Check out proof-of-stake currencies, and maybe check out Bitcoin Green — because you could still get rich AF while doing your part to keep Mother Nature pristine!