INTERNATIONAL
CRYPTOCURRENCY CONCERNS
What is cryptocurrency? How does it affect us? What does its future look like? Read up on the ongoing concerns surrounding this digital currency. WORDS BY NASH LINSLEY | ART BY AMANDA O’BRIEN
C
urrencies have been used in society since the reign of the Roman empire and have evolved into the complex system of nationally or regionally specific currencies we know today. Evolving yet again, currencies are being taken completely online with the emergence and popularization of cryptocurrencies over the last 12 years. Bitcoin, a digital currency system, gained traction in 2009, and in its wake, other forms of cryptocurrencies are becoming viable forms of payment all across the world with countries such as El Salvador and Cuba making bitcoins legal tender. This supports a promising future for the relatively young currency with its advantages in transparency and global interconnection. However, despite cryptocurrencies being accepted around the world, environmental concerns are becoming increasingly present and obvious. From the mining of specific currencies to verifying transactions in a blockchain system, the energy consumption generated
by cryptocurrencies is accelerating the worldwide climate crisis. This new age digital mining is reminiscent of the California Gold Rush of the mid-1800s. This similarity is seen not only in the parallel between the gold rush and the seemingly instantaneous boom of cryptocurrencies in the last five years but also in the environmental impacts both “rushes” have caused. No matter how archaic the gold rush may seem nowadays, the number of similarities it has to cryptocurrencies is important to draw out. Cryptocurrency mining is a system of introducing new units into circulation via a set of complex computational math equations called blocks. When a block is solved, the machine that solved the equation is awarded a set amount of that cryptocurrency. The process for solving these equations is incredibly energy intensive. However, with cryptocurrency systems like Bitcoin, the amount of money spent on the energy consumed by mining is
outweighed by the value of the coin. Aside from the fact that mining certain cryptocurrencies can be harmful to the environment, the transactions of all cryptocurrencies also require large amounts of energy. This is due to blockchain technology, the foundation of what makes cryptocurrencies what they are. A blockchain is an electronic ledger that is shared between every device working on a network. When dealing with cryptocurrencies, it shows all the transitions of bitcoins. What makes this system so unique and useful is that blockchains are nearly impossible to alter due to how many calculations are needed to verify each transaction. According to a compilation of heavily cited and peerreviewed articles released by Digiconomist, one Bitcoin transaction uses 1773.49 kilowatts of energy. That equates to the amount of energy needed to power an average home in the United States for just over 60 days. To put those numbers DRAKE POLITICAL REVIEW
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