The crypto sector is thriving these days, with much attention from investors and even institutions. On the Investor end, there is a lot of motivation to get involved given that many of the top cryptos are delivering very healthy returns. Think of Bitcoin, which crossed the hundred thousand dollar mark last year and continues to stay strong in the market. Then you have the influx of new tokens, some of which offer both promising price spikes and genuine use cases. As Shraddha writes, many investors are looking for which crypto has 1000x potential and will maximize their investment. But even amidst all of this, it is worth looking at the energy cost of the crypto sector.
After all, tokens, especially proof-of-work tokens, have a significant energy implication. As reports have shown, a token like Bitcoin alone can use up as much energy as an entire country and this has led to some criticism of the industry. However, there have been efforts to contrast this narrative and address the issue. Ethereum, for example, switched from a proof-of-work to a proof-of-stake consensus, essentially reducing its energy use by over 95%.
The Pakistani Crypto Council is one of the latest crypto institutions to address this issue during their recent meeting. In this meeting, it was suggested that runoff energy from the country could be used to power crypto activities. This is according to Bilal Bin Saqib, the CEO of Pakistan’s Crypto Council, who believes that the industry can enter in new era of acceptance and growth. It is worth noting that the industry has attracted not just criticism from environmentalists but concern from governments as well.
There have been incidents of people stealing electricity to mine cryptocurrency and overall concern that sustainability goals could be counteracted by it. However, the council believes that runoff energy could be a compromise. Besides the runoff energy suggestion, the council is also looking at holding more meetings with top government officials to discuss the development of the industry.
This most recent meeting saw attendance from the Bank of Pakistan’s governor, the chairman of Pakistan’s Securities and Exchange Commission (SECP), and the federal information technology secretary. This shows just how seriously cryptocurrency is being taken within the country, especially with the prospect of foreign investment in it.
This will be facilitated by an increase in crypto-related regulations for Pakistan that will hopefully establish it as a hub for cryptocurrency activity.
Senator Muhammad Aurangzeb, who was in attendance at the recent council meeting, said, “This is the beginning of a new digital chapter for our economy. We are committed to building a transparent, future-ready financial ecosystem that attracts investment, empowers our youth, and puts Pakistan on the global map as a leader in emerging technologies.”
Anyone who has followed the development of the crypto industry will tell you that the level of regulatory and governmental support it is seen today was virtually unprecedented. The industry was largely shunned by the government years ago but now that its financial benefits and political implications are more apparent, it has essentially become too important to ignore.
It is also interesting that Pakistan is seeing a greater focus on crypto given that the United States has amped up its own crypto support in the last few months. Following Donald Trump’s re-election, there has been the appointment of a crypto czar, the holding of a crypto summit at the White House, and more vocal support for the industry than ever before. Given that the United States is such a world power, it is almost inevitable that other countries will follow in this lead to stay competitive.
As the complex waters of cryptocurrency are being navigated, there will inevitably be the question of what to do about its energy consumption. Runoff electricity is one possible solution, though even that will not be without its criticism. Not every blockchain ecosystem will switch to a proof-of-stake the way Ethereum has and as long as tokens like Bitcoin remain popular, there will be demand for electricity to fuel these activities. If anything, the next few years will see even more demand for energy to fuel crypto activities thanks to the industry’s growth.
Just a month ago, for example, the Russian power grid was hit with 1.3 million rubles in unauthorized crypto mining, which further shed light on the issue.
This unauthorized electricity use or spread across many regions, showing just how widespread the desire for cryptocurrency is. Over the next few years, we will see several countries taking their official stance on crypto mining. Some will take Pakistan’s approach and actively encourage it and hopefully offer more planet-friendly options for mining activities. Others might choose to disincentivize or put a cap on mining while some others might take China’s route and ban crypto mining entirely.
