The level of Bitcoin mining energy consumption is comparable to that of some countries. This statement is often mentioned as one of the main drawbacks of Bitcoin, as consumption hits the environment. But Bitcoin supporters argue that things aren’t that simple, and in a way, Bitcoin is an eco-friendly technology. Why and who is right?
Proof of work
The Bitcoin network is protected from spam attacks using a mechanism known as “proof of work.” The early installments of this algorithm were created in 1993 by Cynthia Dwork and Moni Naor, long before the advent of Bitcoin. The essence of this mechanism is the requirement for doing calculations (doing “work”) to obtain permission to cast transactions (originally send emails).
Transaction validation requires that you perform calculations to rule out bad actors. The network rewards them with uncirculated Bitcoin to encourage validators. That is Bitcoin’s “mining.” Therefore, the verification process is called “mining.”
In the early days of Bitcoin, mining did not require it. Anyone can use a regular PC to mine. However, as demand for Bitcoin increased, mining difficulties increased, and more energy was required to complete mathematical tasks.
Recently, mining operations have been on an industrial scale. Mining farms occupy a wide range of facilities for devices created for sole purposes. Crack the Bitcoin puzzle at the highest possible speed (to solve the puzzle before the remaining miners and get rewards). By 2018, the Bitcoin network’s energy consumption had reached levels comparable to Nigeria and Denmark.
Bitcoin’s environmental impact
Bitcoin mining operations affect the environment in four major directions:
- Mining has carbon print
- Mining consumes a lot of water
- Mining consumes a lot of electricity
- Mining creates e-waste
Based on all these metrics, Bitcoin has a serious impact on the environment. These metrics show that Bitcoin consumes a lot of electricity and water, leaving waste as harmful as some countries.
It may be difficult to understand what that means when you read that Bitcoin consumes as much power as Poland, but you can zoom in and see what corresponds to the impact of each Bitcoin transaction. Take much clearer photos. According to Digiconomist, one Bitcoin transaction consumes more than 1,100 kW/h (average US household in 38 days), consumes 17,500 liters of freshwater (such as a backyard swimming pool) and produces more than 280 grams of e-waste (over 1.5 iPhone 12), while carbon emissions monitor 620KGGGGGGGS emissions (1.3 million, 1.3 million, YouTube video).
Statista provides a similar estimate. More than that, gold mining is less environmentally harmful than BTC mining when expressed in USD as the same value as the amount of BTC and gold. There is no exact date related to these estimates, but the article appears to rely on data revealed before 2023.
Shortly after the launch of this option, Tesla cited the environmental impact as a reason to stop supporting Bitcoin payments in 2021. Ethereum moved from proof of work to environmentally friendly proof algorithms in 2022.
read more: Tesla stops paying Bitcoin due to “environmental concerns”
Most mining facilities for fossil fuel fuels. Various sources assess the use of fossil fuels and power Bitcoin mining in the 50-90% range.
What Bitcoin supporters say…
First, the Digital Assets Research Institute denies that the data and articles on environmental hazards in Bitcoin are correct. The survey found that the 2018 survey, which suggests that Bitcoin’s high environmental harms were cited thousands of times until 2024, was flawed. The exact articles accounted for only 2% of all parts of this topic. Dali’s paper argues that 2022 was marked by a shift to more rigorous coverage of Bitcoin’s environmental impact themes.
The environmental impact of mining is a serious problem, so various mining operations began looking for ways to more environmentally friendly Bitcoin mining, and the search was successful. In the 2020s initiative, companies used excessive power to mine Bitcoin instead of wasting this power and the resources spent on its production.
NYC Bathhouses mine Bitcoin and use excess waste energy to heat the pool.
Or, in other words, they heat the pools as usual, monetizing the excess forces that exist as a by-product of the process.
This is clearly carbon…pic.twitter.com/v0vedwbicy
– Nic Carter (@nic__carter) June 22, 2023
Another way to make Bitcoin mining more environmentally friendly is to rely on renewable resources. Ethiopia, for example, uses the Grand Ethiopian Renaissance Dam for clean Bitcoin mining.
A 2024 study shows that Bitcoin mining has recently played a positive role in reducing CO2 emissions and has played a straightforward opposite role in terms of environmental impact.
While some companies already boast about being a carbon-neutral Bitcoin mining business, most companies simply accept reductions in energy consumption. As the institutions studying the environmental impact of Bitcoin do not have all the information on mining operations, there is no data on CO2 emissions related to mining. It is not possible to say how much pollution levels have fallen over the past few years.
Pierre Rochard from Riot Platforms appeared in a video measuring CO2 levels in mining facilities using special devices. Some users have drawn some criticism as they pointed out that emissions are related to excessive electricity production rather than from mining equipment.
CO2 concerns are thought to be related to energy generation to power the CPU, not CO2 emissions from the CPU itself.
– Snake Sanders (@Snake_Sanders1) April 10, 2023
Another line of defense used by some Bitcoin advocates is comparing the environmental impact of Bitcoin to the environmental impact of the banking system, indicating that banking transactions are less environmentally friendly than Bitcoin. This argument may make sense if Bitcoin ends up replacing the banking system, but this is not happening.
Who is right?
While Bitcoin mining is far from environmentally friendly, various participants are seeking ways to reduce CO2 emissions through Bitcoin mining, ensuring mining gains negative carbon footprint. According to a recent report from the Mica Crypto Alliance, 70% of the Bitcoin network will be equipped with sustainable energy by 2030. However, there is an increasing trend towards environmentally friendlyness.
read more: The African crypto revolution continues as Ethiopia ranks among global BTC mining leaders