Bitcoin’s Impacts on Climate and the Environment
Bitcoin’s environmental impacts
Energy consumption and greenhouse gas emissions
The process of trying to come up with the right nonce that will generate the target hash is basically trial and error — in the manner of a thief trying random passwords to hack yours — and can take trillions of tries. With hundreds of thousands or more computers churning out guesses, Bitcoin is thought to consume 707 kwH per transaction. In addition, the computers consume additional energy because they generate heat and need to be kept cool. And while it’s impossible to know exactly how much electricity Bitcoin uses because different computers and cooling systems have varying levels of energy efficiency, a University of Cambridge analysis estimated that bitcoin mining consumes 121.36 terawatt hours a year. This is more than all of Argentina consumes, or more than the consumption of Google, Apple, Facebook and Microsoft combined.
And it is only getting worse because miners must continually increase their computing power to compete with other miners. Moreover, because rewards are continually cut in half, to make mining financially worthwhile, miners have to process more transactions or reduce the amount of electricity they use. As a result, miners need to seek out the cheapest electricity and upgrade to faster, more energy-intensive computers. Between 2015 and March of 2021, Bitcoin energy consumption increased almost 62-fold. According to Cambridge University, only 39 percent of this energy comes from renewable sources, and that is mostly from hydropower, which can have harmful impacts on ecosystems and biodiversity.
Globally, Bitcoin’s power consumption has dire implications for climate change and achieving the goals of the Paris Accord because it translates into an estimated 22 to 22.9 million metric tons of CO2 emissions each year — equivalent to the CO2 emissions from the energy use of 2.6 to 2.7 billion homes for one year. One study warned that Bitcoin could push global warming beyond 2°C. Another estimated that bitcoin mining in China alone could generate 130 million metric tons of CO2 by 2024. With more mining moving to the U.S. and other countries, however, this amount could grow even larger unless more renewable energy is used.
Water issues and e-waste
Power plants such as Greenidge also consume large amounts of water. Greenidge draws up to 139 million gallons of fresh water out of Seneca Lake each day to cool the plant and discharges it some 30 to 50° F hotter than the lake’s average temperature, endangering the lake’s wildlife and ecology. Its large intake pipes also suck in and kill larvae, fish and other wildlife.
And even if it one day becomes possible to run all bitcoin mining on renewable energy, its e-waste problem remains. To be competitive, miners want the most efficient hardware, capable of processing the most computations per unit of energy. This specialized hardware becomes obsolete every 1.5 years and can’t be reprogrammed to do anything else. It’s estimated that the Bitcoin network generates 11.5 kilotons of e-waste each year, adding to our already huge e-waste problem.
How can cryptocurrencies be more sustainable?
Because the entire Bitcoin network has invested millions of dollars in hardware and infrastructure, it would be difficult for it to transition to a more energy efficient system, especially since there is no central oversight body. However, there are a number of projects seeking to reduce the carbon footprint of Bitcoin and cryptocurrency in general. Tesla CEO Elon Musk met with the CEOs of top North American crypto mining companies about their energy use. The upshot was the creation of a new Bitcoin Mining Council to promote energy transparency.
