The fall of cryptocurrencies is causing users to turn off their equipment dedicated to mining them, thus reducing the energy impact.
The collapse of cryptocurrencies, and more specifically Bitcoin and Ethereum, are drastically reducing the energy use caused by mining them, according to data from Digiconomist. The level is so great that the reduction of the last few days, some 110,000 metric tons of CO2 per day, would be equivalent to the entire energy use of countries like Austria.
The drop in energy use is due to the stoppage of cryptocurrency mining by many users, who have been forced to turn off their equipment due to the collapse, especially of Bitcoin, which is close to $20,000; a figure well below what it was a little less than a year ago, when it reached $60,000. The fall of Bitcoin, therefore, makes the profits from mining considerably lower. All this, moreover, when the price of electricity continues to rise, which makes keeping equipment active throughout the day not profitable at all.
The drop in energy use due to cryptocurrency mining is therefore very good news. Above all, considering the terrible environmental impact caused by these assets. Some countries, such as Iran recently, where 4.5% of cryptocurrency mining comes from according to Elliptic, have decided to turn off more than 100 mining centers to avoid high electricity consumption. China, on the other hand, banned this practice for the same reason.
As the Bitcoin/Ethereum crash continues, the combined reduction in energy consumption of these networks now equals that of a country like Austria— Digiconomist (@DigiEconomist) June 14, 2022
The reduction in global carbon emissions could be 110,000 metric tons of CO2 per day – almost as much as global CO2 reductions by EVs pic.twitter.com/8cVHlewbYP
There are also companies, such as WikiPedia, that have stopped accepting Bitcoin and other cryptocurrencies as a payment method. In this case, as a method for donations. And it is that their income from these assets barely represented 0.08% of the total, and their energy consumption is —we reiterate— very high.
The fall of the energy impact on cryptocurrency mining could have its days numbered
Cryptocurrencies, Elon Musk
Digiconomist, however, warns that energy use will rise again as soon as Bitcoin and Ethereum rise again. Therefore, it is very likely that both companies and government administrations will continue to take measures regarding its use and mining.
Meanwhile, the Bitcoin crash has hit companies like Tesla, which has since lost some $600 million on its $1.9 billion investment in 2021. Currently, the electric mobility company founded and run by Elon Musk has a capital of 915 million dollars in this cryptocurrency. Musk, however, has confirmed that they will continue with their intention to invest in this asset for the long term. He also assures that he will not sell them despite the fall in value.