For a relatively long time, the debate of how Proof of Work affects the environment has been trending among criticizers of Bitcoin and Cryptocurrency in general. For those who don’t know, Proof of Work is the system that Bitcoin mining follows by requesting computer processing in exchange for mining blocks. This was made to stop potential malicious attacks from taking place by requiring a large amount of time and resources in order to verify transactions. The most common criticism is that the electricity required to verify Bitcoin transactions is having a negative impact on the environment. This is because there are thousands of computers across the planet running on ASICs, which are computers that are very powerful and completely optimized to run the Bitcoin algorithm. Until recently, most Bitcoin mining has taken place in China which is heavily dependent on coal power, and since the usage of this electricity is not technically making any tangible good, people argue that this electricity consumption is harming the environment.

A few months ago, the Chinese government started to crack down on many crypto-industries including exchanges and miners. Many of these miners have started to look for alternative places to set up their headquarters, and places such as Quebec and Iceland have been hot spots for miners. One of the largest miners in the world Genesis Mining has had operations in Iceland for months, and the facility runs completely from geothermal energy which is extremely clean. Canadian provinces such as Quebec have been producing excess hydropower electricity and many miners have been looking to set up operations. On 3/12 according to NASDAQ, Marathon Patent Inc has launched operations in Quebec with a 26,000 sq ft facility and 1,400 Antminer S9s from Bitmain. This is great for places that produce excess clean electricity, and Proof of Work can potentially speed up the adoption of efficient clean electricity by providing economic incentives to anyone who does so. These giant mining facilities provide highly specialized jobs to people and run from excess clean electricity.

People might argue that Proof of Stake, which gives mining rewards to holders of the currency is more efficient. It is true, Proof of Stake is more efficient, but Proof of Work is a way to connect cryptocurrency to a tangible real-world asset. Since millions have been spent by people and companies on equipment, electricity, and labor, there will be a much smaller likelihood that the demand for Bitcoin will shoot down anytime soon. Proof of Work allows for Bitcoin to be connected to human labor, electricity, machines, and indirectly connected to power plants,infrastructure, raw computer parts, and any other resource that was used to build mining facilities.

The United States is not embracing crypto-mining at the moment, with a major New York city Plattsburgh, declaring an 18 month halt on Bitcoin operations. Also, the state of South Carolina has hit Genesis Mining with a cease and desist letter due to the Bitcoin Genesis generates being an “unregistered security”. This is unfortunate, but states on the West Coast have had an influx of miners and rural towns have been the center of this “digital gold rush” and have had to upgrade their infrastructure accordingly. Certain states have been friendly to crypto and others have not, so only time will tell what happens on the federal level.

Overall, Proof of Work has its electricity usage downsides. But it can provide incentives for efficient cheap electricity and an avenue for professional level careers by having Bitcoin mines. It is a way for Bitcoin to be somewhat connected to real-world assets and I believe that over time, different governments will have large incentives to create excess electricity from renewable sources.

Thanks for reading! If you liked my article, you can donate Bitcoin, Litecoin, or Ethereum to my wallet addresses. If you’re broke like me, you can click on my affiliate links to get free Bitcoin on the fountain website I use. You can also follow me on my official Twitter at “Jackson_Kwiat” where you can see my insight on anything cryptocurrency related.

Bitcoin Address; 17XMu3B2WSxDq1EdG9abbtxqL85rxfr1GF

Litecoin Address; TtwKAux2ojX1DAjqBhYHS2UFfEespWAi7

Ethereum Address; 0xfF74cAc9BBEAf219a506C948b57FB4eDBFB3FfE2

FreeBitcoin referral link;

https://freebitco.in/?r=4538456

Sources

https://www.nasdaq.com/press-release/marathon-announces-facility-in-quebec-has-commenced-bitcoin-mining-operations-20180312-00557

https://www.coindesk.com/us-city-mulls-18-month-moratorium-bitcoin-mining/

https://cointelegraph.com/news/south-carolina-wants-to-ban-genesis-mining-over-unregistered-securities

https://www.wsj.com/articles/rural-washington-is-a-hot-spot-for-bitcoin-miners-1518354001