The Environmental Effects of Bitcoin Mining: An Objective Analysis of the Crypto Energy Debate
Cryptocurrencies like bitcoin could appear like a novel and harmless new technology to individuals who are driven by innovation or seeking a fresh approach to generate income. However, the technologies are far from benign for those evaluating the impact of cryptocurrencies on the environment.
In fact, mining cryptocurrency like bitcoin is counterproductive to efforts to combat climate change. This is because of the high energy requirements of the technologies and the pollution they cause. It’s critical for everyone interested in maintaining a habitable world to comprehend these problems and the reasons for the changes that activists and lawmakers are advocating for.
As of June 2023, 267 million individuals worldwide had bitcoins, or barely 3.4% of the total population, according to Crypto.com, a Singapore-based cryptocurrency exchange.
Sustainability groups, government authorities, and corporate executives have all criticized the crypto mining process, citing the technology’s high energy consumption, greenhouse gas emissions, and hardware requirements. Along their production supply chain and during disposal, cryptocurrencies also produce emissions and have other environmental effects that result in e-waste when they reach the end of their useful life. “Computers compete fiercely for proof of work, and it takes a lot of power to find a solution,” stated Marc Lijour, CEO of Creative Energy and an IEEE member. “It’s very inefficient.”
There are miners for bitcoin in 58 countries, with the majority of them based in the United States. Based on data from the CBECI, the United States has the highest energy-intensive bitcoin mining activity globally, at 37.84%. Yet the effects of technology on the environment extend well beyond US boundaries.
In 2020 and 2021, Bitcoin consumed more power globally than several countries combined (173.42 TWh), according to a report published in the journal Earth’s Future. For instance, that power output is more than Argentina and the Philippines’ total electricity usage. Massive amounts of greenhouse gasses result from the high energy.
The analysis found that between 2020 and 2021, bitcoin mining procedures generated 85.89 MTCO2E, or metric tons of carbon dioxide equivalent. The U.S. Environmental Protection Agency’s Greenhouse Gas Equivalencies Calculator compares this amount to 96,210 pounds of coal burnt annually or 9,665 gallons of gasoline consumed by passenger cars.
Even if there are worries about how Bitcoin may affect the environment, recent changes point to a more sustainable future for the sector. Many older, less energy-efficient mining rigs were taken offline as a result of China’s 2021 crackdown on cryptocurrency mining, and miners started to relocate to nations with more affordable, frequently renewable energy sources.
The overall amount of electricity used for Bitcoin mining has dropped as a result of this move. Nearly half of what it was in May 2021, the total energy used for Bitcoin mining has decreased to about 70 TWh annually, or 0.33% of the world’s total electrical generation.
The use of more effective mining rigs—which provide double the hash power for the same amount of electricity—has also increased as a result of the migration of miners to nations like the United States. The Bitcoin network’s security-to-energy ratio has increased as a result of this change.
