Cryptocurrencies are not exactly bathed in the light of righteousness right now when it comes to the environment. Despite not having a physical form, they are ultimately responsible for a substantial amount of environmental impact. This has stemmed from news stories detailing how, in Iceland, more electricity is being used to mine Bitcoin than is used to power its homes, or that Bitcoin mining now uses as much energy as all of Ireland consumes. Sensationalist as these headlines might be, there is no denying that Bitcoin, Ethereum and the myriad of minable altcoins are responsible for significant power consumption today.
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These headlines are why people are more aware of the perceived negative impacts of cryptocurrency mining than they are of the process of mining itself. To grossly oversimplify the process, every 10 minutes a bundle of transactions are encrypted in a block, which is added to the blockchain. Bitcoin miners bundle said transactions into blocks by hashing the transactions together in a Merkle tree, then solving a so-called “proof-of-work” puzzle. This puzzle takes the form of a series of mathematical equations used one after another until the “winning” equation is solved. At this point, the block is verified and added to the blockchain. In return, the miner (or consortium) receive the transaction fees and a predetermined allocation of coins for their efforts. For Bitcoin, this reward currently amounts to roughly $14 million per day.
Critically, the difficulty of the mining task adjusts automatically every two weeks in order to maintain a block creation rate of roughly one every 10 minutes. This means that increasing computing power will not result in more coins being created. Instead, the computation task just consumes more computing power to maintain the status quo of production. This system makes
