Bitcoin prices falling below $21,000 are good news for the global environment as many people will stop or reduce cryptocurrency mining.
Recently, the price of Bitcoin fell slightly below $21,000, half as high as in March and the lowest level in the last 1.5 years. According to The Verge, although the cryptocurrency has been declining in value over the past months, the fun signal is that it also reduces the environmental impact.
Last year, when Bitcoin prices rose and peaked at $69,000 in November, the annual power consumption of the network of “miners” was estimated at 180-200 terawatt-hours (TWh). This is the same consumption as all the data centers in the world annually.
High prices provide incentives for crypto miners for greater rewards. “As long as the price is above $25,200, the Bitcoin network can still maintain mining operations using around 180 TWh per year,” digital currency economist Alex de Vries said.
“It is too early to make a concrete prediction as to whether Bitcoin’s plummeting price will ultimately benefit the environment. If this is just a one-day decline, there won’t be much change,” Alex de Vries said. “On the other hand, if prices cannot recover quickly, the miners will face a difficult decision.”
Research shows that if Bitcoin remained at $21,000, global digital-med electricity consumption would fall to 170 TWh annually. The difference compared to when the price was at the peak of $69,000 is equivalent to the amount of electricity used annually by the whole of Ireland.
According to The Verge, crypto mining is not energy efficient. Mining computer systems verify transactions by racing for increasingly complex problems and, in return, receiving rewards as new crypto “resources.” This is also why many people are concerned about the greenhouse gas emissions generated by cryptocurrencies.
Bitcoin is currently the most considerable capitalized amount on the market. Its fluctuations have a significant impact on the global environment. “Falling prices will help less electricity consumption and, as a result, lower emissions,” Alex de Vries said.
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