Crypto
Cryptocurrency’s Thirst: A Single Bitcoin Transaction Consumes a Pool’s Worth of Water
Bitcoin mining’s extensive water use is worsening the global water crisis, especially in drought-prone regions, according to Alex de Vries. He suggests potential solutions, including renewable energy, but notes the challenges in their implementation.
Cryptocurrency mining uses a significant amount of water amid the global water crisis, and its water demand may grow further. In a commentary published November 29 in the journal Cell Reports Sustainability, financial economist Alex de Vries provides the first comprehensive estimate of Bitcoin’s water use. He warns that its sheer scale could impact drinking water if it continues to operate without constraints, especially in countries that are already battling water scarcity, including the U.S.
“Many parts of the world are experiencing droughts, and freshwater is becoming an increasing scarce resource,” says de Vries, a PhD student at Vrije Universiteit Amsterdam. “If we continue to use this valuable resource for making useless computations, I think that reality is really painful.”
Bitcoin Mining’s Intensive Resource Use
Previous research on crypto’s resource use has primarily focused on electricity consumption. When mining Bitcoins, the most popular cryptocurrency, miners around the world are essentially racing to solve mathematical equations on the internet, and the winners get a share of Bitcoin’s value. In the Bitcoin network, miners make about 350 quintillion—that is, 350 followed by 18 zeros—guesses every second of the day, an activity that consumes a tremendous amount of computing power.
“The right answer emerges every 10 minutes, and the rest of the data, quintillions of them, are computations that serve no further purpose and are therefore immediately discarded,” de Vries says.
During the same process, a large amount of water is used to cool the computers at large data centers. Based on data from previous research, de Vries calculates that Bitcoin mining consumes about 8.6 to 35.1 gigaliters (GL) of water per year in the U.S. In addition to cooling computers, coal- and gas-fired power plants that provide electricity to run the computers also use water to lower the temperature. This cooling water is evaporated and not available to be reused. Water evaporated from hydropower plants also adds to the water footprint of Bitcoin’s power demand.
Alarming Global Water Consumption
In total, de Vries estimates that in 2021, Bitcoin mining consumed over 1,600 GL of water worldwide. Each transaction on the Bitcoin blockchain uses 16,000 liters of water on average, about 6.2 million times more than a credit card swipe, or enough to fill a backyard swimming pool. Bitcoin’s water consumption is expected to increase to 2,300 GL in 2023, de Vries says,
In the U.S., Bitcoin mining consumes about 93 GL to 120 GL of water every year, equivalent to the average water consumption of 300,000 U.S. households or a city like Washington, D.C.
Environmental Impact and Price Correlation
“The price of Bitcoin just increased recently and reached its highest point of the year, despite the recent collapse of several cryptocurrency platforms. This will have serious consequences, because the higher the price, the higher the environmental impact,” de Vries says. “The most painful thing about cryptocurrency mining is that it uses so much computational power and so much resources, but these resources are not going into creating some kind of model, like artificial intelligence, that you can then use for something else. It’s just making useless computations.”
At a value of more than $37,000 per coin, Bitcoin continues to expand across the world. In countries in Central Asia, where the dry climate is already putting pressure on freshwater supply, increased Bitcoin mining activities will worsen the problem. In Kazakhstan, a global cryptocurrency mining hub, Bitcoin transactions consumed 997.9 GL of water in 2021. The Central Asia country is already grappling with a water crisis, and Bitcoin mining’s growing water footprint could exacerbate the shortage.
Potential Solutions and Dilemmas
De Vries suggests that approaches such as modifying Bitcoin mining’s software could cut down on the power and water needed for this process. Incorporating renewable energy sources that don’t involve water, including wind and solar, can also reduce water consumption.
“But do you really want to spend wind and solar power for crypto? In many countries including the U.S., the amount of renewable energy is limited. Sure you can move some of these renewable energy sources to crypto, but that means something else will be powered with fossil fuels. I’m not sure how much you gain,” he says.
Reference: “Bitcoin’s growing water footprint” by Alex de Vries, 29 November 2023, Cell Reports Sustainability.
DOI: 10.1016/j.crsus.2023.100004
Crypto
[Analysis] “Cryptocurrency Holders Surge Over the Past Two Years”
Image=Santiment
It has been observed that the number of cryptocurrency holders has surged over the past two years.
On the 23rd (local time), the on-chain analysis platform Santiment reported on X (formerly Twitter) that “the number of cryptocurrency holders has significantly increased over the past two years. The number of non-empty wallets for the top 4 cryptocurrencies by market capitalization has generally increased.”
Specifically, Bitcoin (BTC) has 54.7 million wallets (a 27% increase), Ethereum (ETH) 134.9 million wallets (a 47% increase), Tether (USDT) 657 million wallets (a 66% increase), and Ripple 575 million wallets (a 28% increase).
Crypto
Blockchain Revolution: How Cryptocurrency is Transforming Global Logistics – theafricalogistics.com
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The global logistics industry is undergoing a seismic shift, driven by the integration of blockchain technology and cryptocurrency.
These innovations promise to enhance transparency, efficiency, and security across the supply chain. From tracking shipments to streamlining cross-border payments, the synergy between blockchain and cryptocurrency is setting new benchmarks for the logistics sector.
1. Blockchain’s Role in Logistics
Blockchain technology, essentially a decentralized ledger system, enables secure and transparent recording of transactions. For logistics, this translates into the ability to track goods in real-time, authenticate the origin of products, and mitigate fraud. Key benefits include:
- Enhanced Traceability: Every transaction, from the manufacturing stage to delivery, is recorded on an immutable ledger. This ensures that stakeholders have a comprehensive view of the supply chain.
- Reduced Paperwork: By digitizing documents such as bills of lading and certificates of origin, blockchain eliminates the inefficiencies of manual processes.
- Improved Trust: Smart contracts, self-executing agreements coded on the blockchain, reduce disputes and enhance trust between parties.
2. Cryptocurrency in Cross-Border Transactions
Traditional cross-border payments in logistics are often marred by high fees, long processing times, and currency exchange risks. Cryptocurrencies, like Bitcoin and stablecoins, are addressing these challenges by:
- Lowering Transaction Costs: Cryptocurrency transactions bypass intermediaries, significantly reducing fees.
- Speeding Up Payments: Transactions settle in minutes, eliminating delays common with traditional banking systems.
- Enhancing Financial Inclusion: For businesses in emerging markets, cryptocurrencies provide access to global trade without reliance on conventional banking infrastructure.
3. Use Cases Transforming the Sector
Several real-world applications highlight the impact of blockchain and cryptocurrency in logistics:
- Walmart’s Blockchain Initiative: Walmart leverages blockchain to track the origin of produce, ensuring food safety and traceability within its supply chain.
- Maersk’s TradeLens Platform: Developed in collaboration with IBM, TradeLens uses blockchain to digitize and streamline global shipping documentation, reducing inefficiencies.
- Cryptocurrency-Powered Freight Payments: Startups like Slync.io enable shippers to pay carriers using digital currencies, enhancing payment speed and reliability.
4. Challenges to Adoption
Despite its potential, the adoption of blockchain and cryptocurrency in logistics is not without hurdles:
- Regulatory Ambiguities: The legal status of cryptocurrencies varies across countries, complicating implementation.
- Scalability Concerns: Processing thousands of transactions per second remains a challenge for blockchain networks.
- Skill Gaps: The logistics workforce often lacks the technical expertise to deploy and manage blockchain systems.
5. The Road Ahead
The integration of blockchain and cryptocurrency in logistics is still in its nascent stages but holds immense promise.
Industry players are investing in pilot projects to explore scalability and operational viability. The convergence of these technologies with artificial intelligence and IoT will further revolutionize the sector, enabling predictive analytics, autonomous supply chains, and more.
Conclusion
Blockchain and cryptocurrency are not just buzzwords but transformative tools reshaping the logistics landscape.
By fostering transparency, reducing costs, and expediting processes, these technologies are addressing long-standing inefficiencies in the supply chain.
As adoption accelerates, businesses that embrace this revolution stand to gain a significant competitive edge in an increasingly digital and globalized economy.
Also Read
How cryptocurrency works: A step by step guide
Exploring the potential use cases of Pi Coins post-launch
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Crypto
My Top Cryptocurrency to Buy Right Now (Hint: It's Not Bitcoin) | The Motley Fool
The performance of Bitcoin (BTC -0.53%) this year has been nothing short of extraordinary. It’s now up about 46% since the election on Nov. 5, and 146% year to date. Best of all, Bitcoin recently broke through the $100,000 price level to hit another all-time high just north of $108,000.
But what if I told you that there is another top cryptocurrency that is up more than 120% since the election, and 430% year to date? And that this cryptocurrency also just set a new all-time high? That cryptocurrency is Sui (SUI -3.69%), which now ranks 14th among all cryptocurrencies with a $13 billion market cap.
What is Sui and why haven’t I heard of it before?
If you’ve never heard of Sui, that’s understandable. The cryptocurrency only launched in May 2023, just as the market was emerging from the crypto winter of 2022. So, in many ways, its launch flew under the radar of investors. There were bigger issues to consider. The industry was still coping with the aftermath of the collapse and scandal of crypto exchange FTX in November 2022, and nobody was very interested in hearing about another new cryptocurrency launch.
But fast-forward to August 2024. That’s when 21Shares — the company that partnered with Cathie Wood’s Ark Invest on the launch of spot exchange-traded funds (ETFs) for Bitcoin and Ethereum (ETH -0.79%) — released a research report on Sui, detailing all of its unique characteristics. For example, it described how a new technical upgrade suddenly made Sui faster than any other top blockchain by a substantial margin. It pointed out how Sui was rapidly growing in terms of total value locked (TVL), which is a key metric showing the relative strength of a particular blockchain.
The title of the report (“Is Sui a Solana (SOL -0.00%) Killer?”) was very provocative, at least for crypto investors. It suggested that Sui had the technological chops to take on Solana, which now ranks as the fifth-largest cryptocurrency. For several years now, Solana has been positioned as the next Ethereum, so Sui being tabbed as a potential Solana killer is a big deal. In fact, 21Shares suggested that there might be a $68 billion market opportunity for Sui if it was able to take on Solana and win.
How high can Sui go in 2025?
My primary concern right now with Sui is that it may be overheating. Just like Bitcoin, it is smashing through all-time high after all-time high. Right now, Sui is trading at about $4.50 after briefly testing the $5 price level. From the perspective of crypto traders, $5 presents the same psychological price barrier for Sui that $100,000 did for Bitcoin. It took Bitcoin a while to break through the $100,000 level, so Sui may not be able to break through the $5 price level by the end of this year.
But, in 2025, watch out. Just take a look at this comparison chart of Bitcoin and Sui since the presidential election. That leads me to think that the market is very bullish on Sui’s prospects under the Trump administration.
Moreover, consider the trading volume that Sui is now seeing on Coinbase Global (COIN 1.75%). Sui has become one of the 10 most popular cryptocurrencies on the platform in terms of 24-hour trading activity. Granted, the trading volume in Sui is nowhere near that of Bitcoin or Ethereum. But there’s more activity in Sui than in popular cryptocurrencies such as Chainlink, Litecoin, Cardano, Shiba Inu, and Avalanche.
Best of all, Sui has a major new product launch coming in 2025. It’s a $599 handheld gaming device that is currently available for pre-order online. If that product launch is a success, then it could be off to the races for Sui. It could easily double in price to hit the $10 price level.
This cryptocurrency could soar even higher if it ever realizes its full potential as the next Ethereum. Imagine if you had invested in Ethereum just 18 months after its launch. Most likely, you’d be a crypto millionaire by now. In December 2016, Ethereum was trading around $5, which is roughly where Sui is trading right now. Today, Ethereum trades for about $3,400.
That said, I can’t emphasize enough how speculative Sui is. It is still a baby in crypto terms. It has only been around for 18 months, and it can be difficult to get good data and reliable information about it. So, do your due diligence before investing in Sui, and keep your expectations in check. An investment opportunity like Ethereum might only come around once in a lifetime, so it’s asking a lot for it to happen with Sui as well.
Dominic Basulto has positions in Bitcoin, Ethereum, SUI, and Solana. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, Ethereum, SUI, and Solana. The Motley Fool has a disclosure policy.
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