How does Bitcoin mining impact the environment?




Most people purchase Bitcoin via cryptocurrency exchanges, but it isn’t the only method to get the world’s oldest cryptocurrency – they may also mine for it. Unlike gold mining, which used to take place on river beds and deep inside caves, Bitcoin mining takes place on the blockchain.

Bitcoin mining is how new bitcoins enter circulation, but it is also an important component of the blockchain ledger’s upkeep and evolution. Moreover, it is carried out with very powerful computers that answer exceedingly difficult computational math problems.

Use of fossil fuel in Bitcoin mining

Cryptocurrency mining often makes use of energy generated from fossil fuels. The quantity of energy used grows as the price of bitcoin rises. As the price of bitcoin increases, miners will be even more driven to mine coins, drawing more users to the bitcoin network.

Bitcoin mining uses more than 120 Terawatt Hours (TWh) of energy every year. This is more than Malaysia, Sweden, and Argentina combined. This analysis has been made in the research conducted by University of cambridge. If bitcoin had been a country, it would have been among the top 30 energy users.

Energy, hardware, and e-waste are three examples of Bitcoin’s negative environmental impact.

Bitcoin’s negative environmental effect is caused by more than just the amount of energy it uses.

It is also important to consider the energy utilized, especially when it comes to polluting, non-renewable energy, as is the case with most of the energy utilized in the Bitcoin network.

How is bitcoin mining affecting global temperatures?

Furthermore, studies indicate that Bitcoin has a high possibility of driving global warming on its own, generating enough carbon-dioxide emissions to push the world temperature “beyond 2°C within fewer than three decades.”

Bitcoin is hungry for power

Unlike conventional currencies, bitcoin is a virtual currency that is not composed of paper, plastic, or even metal. Bitcoin is virtual, yet it consumes a lot of electricity since it is generated by high-powered computers all around the world.

According to the present rates, bitcoin “mining” consumes about the same amount of energy each year. Some bitcoin advocates are of the opinion that the existing banking system along with its millions of employees and computers in air-conditioned offices, use a lot of energy as well.

Other Negative Environmental Effects of Bitcoin Mining

Aside from energy usage, bitcoin mining produces a substantial quantity of technological trash when gear becomes outdated. This is particularly true for Application-Specific Integrated Circuits (ASICs), which are specialised pieces of hardware used to mine the most popular cryptocurrencies.

Unlike other types of computer hardware, these circuits cannot be reused and soon become outdated. Every year, the bitcoin network produces between eight and twelve thousand tonnes of electronic trash.

Crisis in China

According to a recent research published in the scientific journal Nature Communications, bitcoin is expected to produce more than 130 million metric tonnes of carbon emissions in China alone by the time the technology’s energy usage peaks in 2024.

That quantity of greenhouse gases would have exceeded the Czech Republic’s and Qatar’s combined yearly emissions production in 2016. According to Sinan Kufeogl, civil engineering research associate at the University of Cambridge, the bitcoin blockchain may use as much energy per year as tiny to medium-sized nations like Denmark, Ireland, or Bangladesh.

Relationship of Bitcoin mining with coal mining

Elon Musk’s Tesla recently began taking bitcoins as a legitimate form of payment for goods. Still, Musk quickly reversed course and discontinued the new payment option, fearing that crypto mining adversely impacted the environment.

This begs the issue of how crypto mining, a code-based activity, affects the environment.

It takes approximately ten minutes for network members to unriddle the complicated algorithm and process a block using bitcoin mining software. This method requires a significant amount of power to produce each bitcoin, with the mining process using the majority of the energy.

Crypto mining often depends on energy produced from fossil fuels. With the increase in the price of bitcoin there is an increase in the need for electricity. The rising price of bitcoin encourages miners to mine more bitcoins, which draws more users to join the new network, and energy usage continues to rise at an alarming rate.

According to the University of Cambridge research, crypto mining uses more than 120 Terawatt Hours (Twh) each year. If it were a nation, it would be among the top ten energy users on the planet.

The situation has deteriorated because businesses are looking for locations with lower energy costs to make the crypto mining process a little cheaper and simpler.

A few studies have also suggested that crypto mining may emit enough carbon dioxide to cause global warming to exceed 2 degrees Celsius.

While the drawbacks of crypto mining are as obvious as the day is long, many organizations are developing solutions to make cryptocurrencies more sustainable. For example, Elon Musk, a cryptocurrency enthusiast and owner of Tesla and SpaceX, has promised to return to cryptocurrencies if they discover a bitcoin that consumes less than 1% of the current energy.

It is a misconception that Bitcoin is fundamentally less efficient than conventional banking systems.

Many of the most concerning stories stem from a fundamental misunderstanding of how Bitcoin operates. You may come across statements like, “Bitcoin would need 14x the world’s total energy simply to handle the 1 billion credit card transactions that occur every day.” These figures are often derived by combining the energy cost of bitcoin mining with the cost of transactions.

Energy is used mainly by mining blocks on the blockchain, not by transactions. (The “mining” process achieves many objectives, including the creation of new bitcoin as well as the verification of new transactions. However, as the name implies, the main purpose of mine is to generate a new bitcoin.)

The amount of energy used is calculated for every block, not per transaction. Energy costs per transaction will fall as technologies (such as batching, Segwit, and the Lightning Network) enable participants to combine more transactions per block.


Concerns over cryptocurrencies’ environmental impact have resulted in a decrease in the popularity of Bitcoin and other blockchain networks among environmentally conscious customers. In addition, some Non-fungible tokens have been accused of being harmful to the ecosystem. As a result, several digital artists have promised to donate a part of their profits to fund green energy projects.

It makes fundamental economic sense for miners to switch to green energy sources to increase revenues. Furthermore, because they are less expensive to manage the increased output, the transition from the PoW algorithm to the PoS algorithm may significantly reduce energy usage for cryptocurrency mining farms over time. As a result, blockchain technology may take a proactive approach to expand into a whole new industry. In addition, these changes may quiet critics while also helping the environment.

Bitcoin’s proof-of-work method forces network users to spend effort solving an arbitrary mathematical problem to prevent anybody from gaming the system. However, this technique may be changed by more environmentally friendly alternatives.

We examined the environmental costs of this method, which included significant energy consumption, the usage of a large amount of hardware, and the generation of e-waste.

About the author, Declan Yin

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