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Cryptocurrency affects the environment primarily through the high energy demands of "Proof of Work" mining, particularly Bitcoin, contributing to carbon emissions.
The industry is actively transitioning to more energy efficient protocols.
Energy Consumption
Bitcoin, a dominant cryptocurrency, relies on a "Proof of Work" system that demands substantial electricity, often sourced from fossil fuels. This results in a notable carbon footprint, a major point of concern given the 95 tracked signals around Crypto and Bitcoin.
Sustainable Transitions
Many newer cryptocurrencies and updated blockchain networks now use "Proof of Stake" or other low energy consensus mechanisms. This fundamental shift significantly reduces the energy consumption and environmental impact of these digital assets, moving towards greater sustainability.