ENVIRONMENTAL IMPACT OF CRYPTOCURRENCY MINING: SUSTAINABILITY CHALLENGES AND SOLUTIONS

Abstract

The rapid growth of cryptocurrencies over the past 14 years has led to increased deep-level mining activities. This research aims to explore the environmental impacts resulting from the surge in crypto mining and proposed solutions to mitigate these impacts. Cryptocurrencies, gaining popularity as alternative investments and global payment tools, have significantly boosted crypto mining activities. However, the increasing number of transactions requiring computer validation has resulted in adverse consequences for the environment, particularly in terms of substantial energy consumption. Literature review and systematic analysis were conducted to comprehend the environmental impact of crypto mining, focusing on major cryptocurrencies such as Bitcoin, Ethereum, and others. The analysis highlights that crypto mining, especially Bitcoin, requires a significant amount of electricity, leading to a substantial carbon footprint and broad environmental repercussions. Proposed solutions to address the environmental impact of crypto mining include the use of renewable energy sources such as solar and wind power, enhancing the efficiency of specialized mining devices (ASICs), and exploring more energy-efficient consensus mechanisms like Proof of Stake (PoS) compared to the currently utilized Proof of Work (PoW). Reducing redundancy in blockchain technology has also been identified as a crucial step in minimizing unnecessary energy consumption. However, this research has limitations concerning data consistency, a comprehensive understanding of overall environmental impacts, and continuous technological changes in the crypto world. Therefore, future research should focus on developing more efficient consensus mechanisms, effective policy frameworks and governance, as well as real-world implementation studies to evaluate the sustainability solutions proposed.