Conspiracy- The Impact of Cryptocurrency on Climate Change

Tags: bitcoin, ethereum, ripple, xinfin
Published: 2021-04-22 11:47:01

The last decade has been riveting for the financial world due to the onset of many new investment instruments — one of them being cryptocurrency. While the world tries to encash on every big investment opportunity presented by cryptocurrency, many risks and negative impacts have been downplayed to a dangerous level. One of them is the environmental impact of cryptocurrency trading. The annual carbon footprint of trading bitcoins in a single day is equivalent to that of the entire country of Argentina.

The cryptocurrency coins are produced through mining that is a complex algorithmic process done by many high tech computers which consumes thousands of units of electricity. The electricity consumption leads to a high level of carbon footprint by these currencies. Let’s see the comparison of the energy consumption levels of various cryptocurrency coins and found out that Bitcoin consumes almost 1000 kWh power whereas the second most expensive coin- Ethereum consumes 80 kWh which is higher than the level of power consumption by New York in a day.

As responsible citizens of this world, it becomes our duty to deal with this situation in a smart way. Rather than investing in coins that create a climate crisis, we should look for alternate option that save the planet to enough extent that our children at least get the opportunity to experience this world from their eyes. Coins like XDC and Ripple are actually consuming 1000 times lesser energy as compared to Bitcoin. While Ripple’s power consumption is equal to 0.000011 kWh, XDC consumers spend even less power i.e 0.000000118 kWh.

This makes XDC — a coin hosted by XinFin Fintech’s blockchain network, a much more energy efficient coin and reduces the risks and negative impacts of scaling up at any point of time.

But of course, being an investor your decision to buy or sell a coin wouldn’t be based on just energy consumption levels and your focus primarily remains on the price and market share of the coin. Therefore, it must be relieving for you to know that the alternate options like Ripple and XDC have a great structural backbone in terms of digital systems and currency ratings that make it a much more suitable choice for cryptocurrency trading. If we take the example of XDC, it’s price is currently standing at a very small fraction of 70 dollars per coin which is practically a very, very small portion of your child’s pocket money. Not just this, the overall transaction time is also 2 seconds whereas bitcoin mining of every new coin takes about 10 minutes. Imagine being able to trade a coin at the blink of an eye whereas trading over an extended period where the only next task is waiting. Similarly, Ethereum has a transaction time of 15 seconds while even Ripple dwindles between 3 to 5 seconds but none of these have managed to bring it down to the XDC’s level of 2 seconds.

Nevertheless as an investor, I am more interested in overall market capitalization since that affects the price of the commodity and features that make my transaction smooth and secure. In order to achieve this, XDC by XinFin Fintech company has introduced the concept of smart contract which is nothing but an automatic process which documents all the rules and regulations applicable to an ongoing transaction and then executes it at the time of trigger. This method keeps the payment in escrow and limits any impulsive action on any stakeholder’s part. This method saves the interest of both the buyer and the seller and ensures security of transaction from external influences as well as internal frauds. XDC has reached a market capitalization of a billion and half which makes it the most progressive coin in the market currently and adds to the testimony of it being reliable, consistent and high potential cryptocurrency. Currencies like bitcoin, ripple do not have the features of smart contracts and hence cannot be used to be applied as an escrow payment mode for various organizations. This is detrimental in the current context as the pandemic and lockdown have limited the scope of meeting people face to face and the escrow payment feature just makes it easier to replicate the whole schema to any small and large business and expand the scope to fintech and banking usage as well.

An important point of contention is that the increase in price of the currency due to constant trading and mining increases the level of energy consumption by these cryptocurrency and blockchain networks. Hence the coin which carries a market capitalization of thousands of billions like Ethereum and Bitcoin end up attracting more and more people for investment, which seemingly increase the prices further. An increase in price usually leads to more mining and hence increase in carbon footprint. But we will have to start being more cautious of such cryptocurrencies that run the risk of closing the entire nation due to changes in climate created by the carbon release of these server computers. We went a step further and studied the electricity consumption trends in particular areas of America and then mapped it to the user consumption of cryptocurrency. Needless to say the hotspot hubs of America where the servers are placed have such high power consumption that an entire country can be lit for weeks by the power consumed in an hour. Most of these come from the users of bitcoin and ethereum, both of which take every less effort to become more green and adopt corporate sustainability

Lastly, being the most primitive currency — bitcoin, it is hardly expected that they would be able to make the system’s any lighter which is something each one of us should be aware of. We must make active efforts to increase the pricing for XDC by collective investment as the features offered by the currency are much better and much more efficient as compared to its counterparts and this investment can not only increase the market capitalization further but also improve the profit percentage earned by the account holders and community members.