JAKARTA - UN experts believe that cryptocurrencies and the blockchain technology that powers the ecosystem can actually increase "environmental oversight".
Despite the issue of greenhouse gases generated in Bitcoin mining, the United Nations believes that currency and blockchain technology can play an important role in sustainable development.
UN experts believe that cryptocurrencies can actually increase their oversight of the environment. In a report last month, the UN said that transparency is one of the most useful aspects of cryptocurrencies and can provide reliable transaction records, especially in countries with weak institutions and high levels of corruption.
The World Food Program (WFP) has also discovered that blockchain technology can help ensure that cash reaches those who need it most.
While in recent months, many people around the world have raised concerns about Bitcoin mining. Mining is an energy-intensive process that involves using a powerful computer around the clock to solve complex mathematical problems.
Citing the environmental problems created by Bitcoin mining, Tesla CEO Elon Musk announced that his company will no longer accept Bitcoin. This led to a fall in the market value of Bitcoin, which had previously skyrocketed due to the trust shown by the same tech billionaire.
Tim Berners-Lee, who wrote the source code for the World Wide Web, describes Bitcoin mining as “one of the most basic, useless ways of using energy.”
Bitcoin is a decentralized digital currency that has no physical existence. New Bitcoins are brought into circulation as a reward for a process known as 'mining'.
Proof of transactions in cryptocurrencies is not stored in a central database, but rather stored in blocks and logged by a distributed network of miners.
Miners are rewarded with new Bitcoins for every block they manage to mine. Recording blocks involves solving math problems that become more complex with each mining.
Over the years, algorithms have become longer and more complex, requiring specialized computers with colossal processing power to be able to record blocks.
Naturally, such processes require extensive energy and often rely on electricity generated from fossil fuels, especially coal. As per estimates by the University of Cambridge, Bitcoin mining consumes more than 178 TWh every year. This is believed to have made energy demands continue to soar and could create complex environmental problems.
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