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El Salvador's President Nayib Bukele has announced plans to build a 'crypto utopia' near the foot of the Conchagua volcano. The long-term goal of his 'Bitcoin City' is to use the volcano to power crypto mining.
Although the project has been temporarily put on hold due to the market dip, it left me wondering what fuels are currently used to mine cryptocurrency, and how projects like Ethereum (ETH) and FIREPIN Token (FRPN) are setting up their futures in crypto mining.
Crypto mining is the process that generates new coins. It also confirms new transactions while helping to maintain and develop the blockchain ledger.
'Mining' itself uses computer software to solve extremely complicated maths problems to unlock the next block of coins. Unfortunately, this process requires vast systems of computers to continuously run and calculate the maths puzzles, which in turn requires a lot of energy.
In turn for the complicated task of mining, the crypto 'miners' receive coins in payment.
This work also verifies the legitimacy of transactions and keeps crypto more honest than traditional banking. Another word for this process is 'minting' and it is the only way to circulate new coins.
A large majority of the energy required for mining is generated by fossil fuels. If Bitcoin were a country, it would rank 26th in energy consumption- for context, this would place it above Sweden, Malaysia, and Argentina. When you contextualize this with its fossil fuel consumption, these statistics are concerning.
Famously, Tesla announced that it had purchased $1.5 billion in Bitcoin in February 2021, promising to support Bitcoin as an accepted currency in the future. However, only three months later Elon Musk backtracked on this decision citing the 'rapidly increasing use of fossil fuels' as his reason to reject the coin.
The resulting impact this had on the market was incredible, overnight the value of Bitcoin dropped and many sceptics haven't forgotten their concern to this day.
There are renewable energy sources generating fuel for some coins, while others promise to offset their carbon footprint.
It's also worth noting that not all cryptocurrencies require the same amount of energy as Bitcoin. TRG Datacentres ran an energy analysis in 2021 and found that Ethereum (ETH) consumes 644.44 KW/h less energy per transaction than Bitcoin.
Furthermore, as renewable energy becomes gradually more affordable, cryptocurrencies will be more inclined to adopt these energy sources over fossil fuels.
Already, Ethereum (ETH) has announced that it will change its mining process to become more energy-efficient, proving an awareness of this issue. Rather than using a proof-of-work model, Ethereum (ETH) will use proof-of-stake, meaning that its security will use far less energy.
For those looking to invest in presale coins like FIREPIN Token (FRPN), there may be concerns about its environmental impact, especially as they don't address their consumption of fossil fuels for energy on their website.
Although cryptocurrency is currently mostly using fossil fuels to power mining, the future is looking bright. New coins like FIREPIN Token (FRPN) are being launched into a more energy-conscious crypto market, with energy efficiency paying off.
It is therefore much more likely that the future of FIREPIN Token (FRPN) will look to renewable energy for its power, especially considering the coin's community-led, democratic outlook.
Learn More About FIREPIN at:
Join Presale: https://presale.firepin.io/register
Website: https://firepin.io/
Telegram: https://t.me/FIREPINOFFICIAL
Twitter: https://twitter.com/FIREPIN_io
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Disclaimer: Analytics Insight does not provide financial advice or guidance on cryptocurrencies and stocks. Also note that the cryptocurrencies mentioned/listed on the website could potentially be risky, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. This article is provided for informational purposes and does not constitute investment advice. You are responsible for conducting your own research (DYOR) before making any investments. Read more about the financial risks involved here.
