How Can Cryptocurrency Become More Energy Efficient? What I Found After a Week of Research

I can tell you, I went into this research hoping to affirm what all people have discussed: crypto is ruining the planet, that is all. However, after researching information, test sites and interviewing people who are in the act of mining, I discovered something far more interesting. It is not a story about what you think.

The Real (But Not What I Expected) of the Problem.

This is where I stopped: The amount of energy consumed by Bitcoin alone is 173 terawatt-hours per year, which is similar to the national power of Poland. One Bitcoin transaction? About 1,135,000 watt-hours. That is crazy in comparison with your Visa swipe.

However, this is what horrified me: Bitcoin constitutes 81% of the overall power of crypto. The rest of the crypto world? It does not even come anywhere near that level of consumption. When they speak of crypto being bad on the environment, they are actually referring to a single coin with a single technology.

The catch? The technology, Proof of Work, is developed in such a manner that it is energy-intensive. It is not a bug it is simply the feature.

Which factors make Cryptocurrency More Energy Efficient? It Already Started

It shocked me: Ethereum reduced its energy consumption by 99.95 percent in 2022 overnight. Not 10%. Not 50%. Nearly 100%.

Prof of stake replaced Proof of Work. Validators instead of racing thousands of computers to solve puzzles merely lock their coins and confirm transactions taking place. Ether is consuming 0.0026 kilowatt-hours per transaction, rather than 84,000. That’s not a typo.

I did, at least, in part. I researched staking platforms and investigated what it is like. It turns out that you can put down Ethereum with a few hundred dollars using providers such as Lido. No mining rigs. No enormous electricity bills. Only a computer and an internet connection.

Cardano? Since its beginning, it has been operating on Proof of Stake. According to analysts it is 47000 times energy efficient than Bitcoin. Nano does not even need miners, it is users who authenticate their transactions. The cost that Stellar charges per kilowatt-hour is 0.00022.

So anyway, the technology to make crypto green? It’s here. It works. It’s just not universal yet.

The Bitcoin Problem (And Surprising Solutions).

Bitcoin does not have the choice of simply changing to Proof of Stake. It relies on that Proof of Work system that consumes much energy to perform its entire security model. Therefore, I thought; does it mean that Bitcoin remains trapped in environmental catastrophe?

Not exactly. This is the real state of affairs:

The renewable energy use in Bitcoin mining has increased by 25 percent to 54 percent in 2021-25. In Paraguay, wind farms in Texas and geothermal plants in Iceland miners are establishing themselves around hydroelectric dams. Why? Since, due to its frequent cheapest source, renewable energy can be seen as the best solution, particularly when the power is curtailed, or, in other words, wasted due to excess supply.

After that, there is immersion cooling. Sounds like science-fiction, but does consist of simply immersion of mining equipment in special liquids that cool much quicker than air. Energy reduction? 20-22%. And the waste heat also has its second life-use, cities in Canada and Sweden are literally heating buildings with the Bitcoin mining heat.

And get this: in the case of Texas Winter Storm Elliott, the Bitcoin miners voluntarily put down 91.5 percent of their activities to aid in stabilizing the power grid. You do not hear a lot about that.

The lesson I learned about Layer 2 Solutions.

This is one that I took me some time before grasping because it is massive. The Layer 2 solutions such as the Lightning Network of Bitcoin execute transactions outside the blockchain. This causes millions of transactions to occur independently, before they are settled in batches instead of overwhelming the main network.

Energy reduction? More than 99% of comparing to doing everything on-chain. And it’s already live. People are using it right now.

The same applies to Ethereum, which has solutions, namely, rollups, where transactions are bundled together. Almost the same thing: keep everything safe, reduce energy consumption by much.

The Weird One: SolarCoin

I tripped over it and could not think it was true. And with SolarCoin you are paid in cryptocurrency to produce solar energy. The production of one coin per megawatt-hour. Like a frequent flier program, except that it does not destroy the planet.

It was embraced by ACWA Power, which is a huge energy corporation to encourage the development of the solar. It is small in comparison with Bitcoin, yet the idea is genius, cryptocurrency, which is not powered by clean energy, just consumes it.

What This Actually Means

Within the span of a week in research, I learned the following: how to make cryptocurrency more energy efficient? It already is selectively.

The tech exists. Proof of Stake works. Layer 2 solutions work. Integration in renewable is a fact. However, the dominance of Bitcoin ensures that the aggregate presence of the industry remains huge. The silver lining? 60 percent of new crypto launches on Proof of Stake in 2025.

You have choices in case you are investing in crypto and you are interested in energy. Stake Ethereum or Cardano. Use Layer 2 networks. Projects of support such as Algorand or Nano. The tools are here.

Bitcoin is not leaving, yet the story about crypto being an ecological disaster is obsolete. It is closer to the idea that one particular crypto is yet to lend it a finger, whereas the rest of the pack has already passed.

That’s what shocked me most.

Read:

How to avoid bitlocker recovery blue screen in windows: Authentic solution.