On October 24, 2023, the United Nations University (UNU) released a groundbreaking study highlighting the environmental repercussions of Bitcoin mining, demonstrating that the impacts extend far beyond carbon emissions. As cryptocurrency has surged in popularity over the past decade, attracting significant investments from a diverse range of players, including corporations and illicit actors, the environmental costs have remained largely overlooked.
The Environmental Toll of Bitcoin Mining
Bitcoin, the most recognized cryptocurrency, has become synonymous with the digital currency boom. However, recent research from UNU scientists has unveiled alarming insights into the ecological damage caused by Bitcoin mining across 76 countries during the 2020-2021 period. The findings indicate that mining activities not only contribute to a substantial carbon footprint but also have significant effects on water and land resources.
Energy Consumption and Carbon Footprint
The study reveals that the global Bitcoin mining network consumed an astonishing 173.42 Terawatt hours of electricity within that timeframe, ranking it as the 27th largest energy consumer globally—surpassing countries like Pakistan. This massive energy use has a carbon footprint comparable to burning 84 billion pounds of coal or operating 190 natural gas power plants. To counteract this environmental damage, approximately 3.9 billion trees would need to be planted, which would cover an area similar to that of the Netherlands, Switzerland, or 7% of the Amazon rainforest.
Water and Land Use
Bitcoin mining’s water footprint is equally concerning, with estimates suggesting it requires enough water to fill over 660,000 Olympic-sized swimming pools. This volume could fulfill the domestic water needs of more than 300 million people in rural sub-Saharan Africa. Furthermore, the land required for Bitcoin mining activities during this period was equivalent to 1.4 times the size of Los Angeles.
Sources of Energy
The reliance on fossil fuels for Bitcoin mining is stark; coal accounts for 45% of the energy mix, while natural gas represents 21%. Interestingly, hydropower, despite its renewable status, presents its own environmental challenges, fulfilling 16% of Bitcoin’s energy needs. Other renewable sources, such as solar and wind, contribute a mere 2% and 5% of the total electricity used for mining, respectively.
Global Mining Landscape
China has historically dominated the Bitcoin mining scene, but recent regulatory changes have caused a significant decline in its share, dropping from 73% in 2020 to around 21% in 2022. In contrast, the United States and Kazakhstan have seen their shares increase. The top ten Bitcoin mining countries—China, the USA, Kazakhstan, Russia, Malaysia, Canada, Germany, Iran, Ireland, and Singapore—are responsible for 92-94% of Bitcoin’s global carbon, water, and land footprints.
Environmental Disparities
Dr. Sanaz Chamanara, the lead author of the study, emphasized that the environmental impact of Bitcoin mining varies significantly based on the energy sources utilized in different countries. For instance, nations such as Norway and Sweden appear in the top ten rankings when assessing the water and land footprints of their mining activities.
Recommendations for Sustainable Practices
The UNU scientists propose a series of recommendations aimed at governments to mitigate the environmental impacts associated with cryptocurrency mining. They advocate for regulatory measures and investments in alternative digital currencies that are more energy-efficient and environmentally friendly. The study also calls attention to the broader implications of cryptocurrency mining, particularly regarding social equity and justice for those affected by its environmental consequences.
As the digital currency sector continues to evolve, understanding and addressing its environmental footprint is critical for promoting sustainable practices that benefit both the economy and the planet.
