Bitcoin’s Environmental Footprint: Is Crypto Mining Bad for The Environment?

Key Takeaways:
1.Cryptocurrency’s Environmental Impact: Bitcoin’s success comes with hidden ecological costs, involving energy, carbon emissions, water, and land use.
2.Global Consequences: China and the United States bear the brunt of Bitcoin’s environmental impact, affecting countries worldwide. 
3.Balancing Digital Wealth and Earth’s Well-being: As cryptocurrencies thrive, we must weigh the ecological costs, stay informed, and strive for a sustainable balance between digital ambitions and planetary health.

Environmental Impact of Crypto Mining

In the captivating world of cryptocurrency, where fortunes are made and digital dreams come true, lies a hidden story of environmental costs. As Bitcoin and other cryptocurrencies have soared in popularity, they’ve faced fierce criticism for their carbon-heavy footprint, offering a stark reminder that innovation often comes at a price.

The first-of-its-kind study, now the cornerstone of a groundbreaking United Nations (UN) report on Bitcoin mining, takes us on an eye-opening journey. It unveils the untold story of how our thirst for digital wealth impacts the planet, dissecting the environmental consequences country by country. This revelation has emerged in the pages of Earth’s Future.

To summarize, global bitcoin mining in 2020-2021:

  • Consumed 173 terawatt-hours of electricity, exceeding the energy usage of most nations.
  • Emitted 86 megatons of carbon, equivalent to burning 8.5 billion pounds of coal.
  • Required 1.65 cubic kilometers of water, surpassing the domestic use of 300 million people in Sub-Saharan Africa.
  • Affected 1,870 square kilometers of land, which is 1.4 times the size of Los Angeles.
  • Derived 67% of its energy from fossil fuels, with coal contributing 45%.

Kaveh Madani, a visionary at the United Nations University, led the charge in this mission. “A lot of our exciting new technologies have hidden costs we don’t realize at the onset,” he cautions. We introduce innovation into our lives, it gains widespread adoption, and only then do we grasp the true extent of its repercussions.

Madani and his team cast a spotlight on the years 2020-2021, leveraging energy, carbon, water, and land use data to calculate the individual environmental impacts for 76 countries engaged in Bitcoin mining. Their primary focus is on Bitcoin, the seasoned veteran of the cryptocurrency world, renowned for its widespread usage and established presence.

Their findings reveal a disquieting truth. Demand for Bitcoin is surging at an alarming pace. Even with strides towards more energy-efficient mining techniques, the environmental footprint continues to expand alongside this voracious demand. In terms of energy consumption, Bitcoin mining could easily rank as the 27th largest energy-consuming nation on the global stage. The years spanning from January 2020 to December 2021 saw Bitcoin mining devour a staggering 173 terawatt-hours of electricity. This marked a harrowing 60% increase compared to the 2018-2019 figures. Bitcoin mining was also responsible for emitting approximately 86 megatons of carbon, largely due to the widespread use of fossil fuel-based energy sources in mining countries. The environmental impact experiences ebbs and flows with a nation’s energy supply and demand, often affecting mining profitability.

At the forefront of this environmental reckoning are China, the United States, and Kazakhstan. These countries bear the heaviest energy and carbon footprints during 2020-2021.

The world of Bitcoin mining is not devoid of its water woes. On a global scale, Bitcoin mining consumed a staggering 1.65 million liters of water in 2020-2021, a volume equivalent to filling over 660,000 Olympic-sized swimming pools. China, the United States, and Canada top the list in terms of water consumption, while countries like Kazakhstan and Iran, grappling with water shortages, also found themselves within the top 10. Even hydropower, hailed as a clean source of renewable energy, leaves a colossal environmental footprint.

The study didn’t stop at water; it ventured into the domain of land use. It gauged the territory impacted in the pursuit of mining energy. Notably, the land footprint of server farms was inconsequential. Yet, the global land use footprint of Bitcoin mining spanned a substantial 1,870 square kilometers. China alone accounted for a whopping 913 square kilometers, while the United States followed with 303 square kilometers. China’s footprint is shrinking while that of the United States is on the rise.

China and the United States, behemoths in terms of economy and population, claim the top two positions across all environmental categories. Other countries, including Kazakhstan, Malaysia, Iran, and Thailand, known for outsourcing servers and even subsidizing cryptocurrency mining, fill the remaining spots in the top 10. Notably, countries like Canada, Germany, and Russia bear colossal footprints across all environmental metrics. Large-scale Bitcoin mining operations by each country reverberate globally, particularly concerning carbon emissions.

But there’s a twist to this narrative. The fruits of Bitcoin mining may not necessarily trickle down to the countries or individuals behind the screens. Cryptocurrency mining operates in a clandestine manner, making it challenging to map environmental impacts to digital asset ownership. Already, some countries have witnessed the depletion of their resources due to cryptocurrency mining. Iran faced blackouts in 2021, attributing them to excessive hydropower consumption during a drought, prompting intermittent bans on mining. China also imposed a ban on Bitcoin mining in June 2021, leading to an increased Bitcoin presence in countries like the United States and Kazakhstan.

This study isn’t an indictment of Bitcoin or cryptocurrency mining. Instead, it serves as a wake-up call, reminding us that innovative technologies often come with concealed costs. Madani stresses the importance of raising awareness and informing people and industries about these hidden costs before it’s too late.