How Cryptocurrency Can Make a Difference in Tackling Climate Change

Cryptocurrency has undergone a seismic evolution in recent years, becoming a more commonplace means of payment for both businesses and individuals. Businesses of all sizes are recognizing the vast potential of digital currency and harnessing it to drive progress and encourage growth. However, ethical concerns have been raised regarding the amount of energy consumption involved in creating cryptocurrencies. With far more awareness of the environmental impact of our actions, it's crucial to attempt to limit our carbon footprints.

It is of course essential to remain conscious of sustainability. It is, however, important to recognize the great strides made by the cryptocurrency industry towards a greener future.

How Is Cryptocurrency Utilized in Business?

While most businesses, regardless of size or sector, have acknowledged the potential of cryptocurrencies, there are some industries that have truly embraced the benefits. Travel and tourism are particularly suited to the use of cryptocurrency, enabling travelers to make the most of a marked reduction in fees while paying for goods and services abroad. Charities are also able to make the most of cryptocurrency; while some people are unable to access traditional banking services or baulk at the fees involved in international transactions, cryptocurrency transactions merely require access to a digital wallet.

With multiple uses of cryptocurrency in entertainment, this industry is continuing to explore the possibilities. Companies are able to reach global audiences by allowing customers to stream or buy online content using cryptocurrency, while performers are increasingly allowing their fans to buy tickets with digital currency. Additionally, high-profile figures have helped to bring the benefits of cryptocurrency to their followers' attention, citing the reduced fees and efficiency of payments involved.

The gaming sector has also successfully demonstrated how cryptocurrencies can drive progress. The rapid development of the smartphone has facilitated the rise of mobile gaming, with companies offering a wide range of immersive, sophisticated games that can be accessed at any hour of the day or night in any location. Online casinos have adopted the use of cryptocurrency to speed up the payment of winnings and keep players engaged for longer while serving to protect personal and financial data and guard against the impact of data breaches.

Gaming platforms are also able to use cryptocurrencies to facilitate the purchase of digital assets and in-game transactions. The use of blockchain technology to create Non-Fungible Tokens (NFTs) to validate ownership of unique digital collectibles and artwork, has led to a thriving digital asset market. 

How Can Cryptocurrencies Contribute to a Greener Future?

With the widespread adoption of cryptocurrency as a mainstream tool for facilitating payments and transfers, it's important to consider sustainability and how cryptocurrency can contribute to safeguarding the environment.

• The use of renewable energy

It is undisputed that the mining of crypto coins requires the consumption of energy by groups of computers linked throughout the world, which run complicated math equations. This cannot be done without the use of energy, and while this was traditionally conducted with the use of fossil fuels, more and more crypto miners are turning to using renewable energy sources such as solar and wind power. With energy technology evolving all the time, the industry is becoming increasingly innovative and forward-thinking. 

There has also been a shift in the processes used by crypto miners. Historically, miners operated on a proof-of-work basis; this means that miners had to solve complicated mathematical equations to submit new transactions to the network. Over time, these equations have become more and more intricate, demanding even more power to complete.

By contrast, some cryptocurrencies employ a proof-of-stake model. Blockchains employ validators who contribute their own cryptocurrency in order to validate new transactions and add them to the blockchain. One of the most high-profile cryptocurrencies using this model is Ethereum, but there is an increasing number of companies following this example, eliminating the need for high energy consumption.

• Using energy in more flexible ways

Making the switch to using energy which would otherwise go to waste is a key way to reduce energy consumption. Harnessing this excess energy rather than using more on top keeps consumption at acceptable levels. It is also possible for companies to locate their headquarters close to energy sources in order to capture this previously wasted energy.

For sustainability, cryptocurrency companies can also adapt their energy usage to support electricity grids. Employing some flexibility when cryptocurrencies are mined or staked can be enormously beneficial for the grid, helping to ease the burden at peak times and also encouraging a switch to the increased use of renewable energy sources. This can help to create a far more resilient electricity grid. 

• Partnering with governments on sustainable projects

Governments are recognizing both the potential of blockchain technology to transform the financial sector and open up a previously inaccessible financial world for the unbanked, as well as the repercussions of high energy usage. It is vital to balance one against the other, exploring the potential of digital currencies while bringing advantages to people all over the world.

There are plenty of cryptocurrency companies which prioritize sustainable practices, creating energy efficient processes and minimizing their environmental impact. Governments around the world are beginning to explore how working in tandem with these companies can be enormously beneficial for climate change. Seeking to replace cash with digital currencies, for example, can have a significant impact, helping to reduce deforestation and water loss. 

Limiting the Impact of Climate Change

It cannot be denied that the production of cryptocurrencies can lead to high energy consumption. Equally, however, there are many companies that are adapting their practices to offset their carbon emissions and create a more sustainable future for cryptocurrency. Placing these ethical concerns at the heart of business can make a significant difference in limiting the effects of climate change.