New digital currencies inspiring worry among experts because of their sizable ecological footprint. A united nations study reveals the hidden environmental impact of bitcoin, noting that the global cryptocurrency mining network is heavily powered by fossil fuels. The assessment, published in Earth’s Future, warns about a significant carbon footprint and notable effects on water and soil resources.
The remarkable rise in cryptocurrency prices over the last decade has drawn substantial investments into the sector. Through blockchain and related technologies, digital currencies have become a pivotal part of the world’s modern financial system, sparking a boom likened to a gold rush. Yet, research also points to a hidden dark side in this fast-moving market.
Machines used for Bitcoin mining agencies
Bitcoin stands as the best known and most widely used cryptocurrency. This prominence prompted UN scientists to evaluate Bitcoin’s environmental impacts on a global scale by examining the activities of 76 Bitcoin mining countries during 2020–2021. The findings, described as shocking, show a substantial carbon footprint along with significant water and land consumption tied to mining activities.
In addition to a significant carbon footprint, global Bitcoin mining activities also exert major pressure on water and land
Technological innovation often comes with unintended consequences, and Bitcoin is no exception, cautions Professor Kaveh Madani, director of the United Nations University Institute on Water, Environment and Health, who led the study. The results should not discourage digital currencies but should spur investment in regulatory policies and technological advances to boost efficiency in the financial system while protecting the environment.
Energy use comparable to that of 230 million people
The United Nations University study reports that, during 2020–2021, the global Bitcoin mining network consumed 173.42 terawatt-hours of electricity. If Bitcoin were a country, its energy footprint would place it around 27th in the world, surpassing nations such as Pakistan with a population over 230 million.
Digital currency is a major polluter
The resulting carbon footprint was equivalent to burning 84 billion pounds of coal or powering 190 natural gas plants. To offset this impact, it would take planting 3.9 billion trees, covering an area comparable to the Netherlands, Switzerland, or Denmark, or about 7% of the Amazon rainforest.
During the same period, Bitcoin’s water footprint matched the volume needed to fill more than 660,000 Olympic-sized pools, enough to meet current domestic water demands of roughly 300 million people in rural sub-Saharan Africa. The global mining network’s land footprint was about 1.4 times the area of Los Angeles.
Bitcoin relies on dirty fuels
UN scientists note that Bitcoin mining relies heavily on fossil energy sources, with coal accounting for about 45% of the energy mix, natural gas at 21%, and hydropower, a renewable source with notable environmental implications, providing around 16% of electricity demand.
Nuclear energy contributes a significant 9% share to Bitcoin’s energy mix, while renewables like solar and wind account for roughly 2% and 5% respectively.
China has been the largest Bitcoin mining country by far. To offset the carbon emissions from its heavy mining operations in 2021–2022, an estimated 2 billion trees would need to be planted, covering an area equivalent to the combined size of Portugal and Ireland, and vastly larger than New York’s Central Park. Besides China, the top mining countries in 2020–2021 include the United States, Kazakhstan, Russia, Malaysia, Canada, Germany, Iran, Ireland, and Singapore.
Near 2 billion trees needed to offset China’s mining emissions in 2021–2022
Lead author Sanaz Chamanara of UNU Environment and Governance and UNU-INWEH explains that the environmental impact ranking of countries changes depending on which footprint is considered. The study found that Norway, Sweden, Thailand, and the United Kingdom appear in the top ten when looking at water or land footprints. Overall, the top ten mining nations account for about 92–94% of the global carbon, water, and land footprints of Bitcoin.
Cryptocurrencies raise environmental concerns
The study offers several recommendations for government action to curb environmental impacts. It suggests investing in other digital currencies that are more energy-efficient and less harmful to the environment. It also highlights cross-border and intergenerational effects of mining activities.
Madani stresses the inequality argument: considering who benefits from Bitcoin mining now and who bears the environmental consequences in the future raises important questions about fairness and accountability in the unregulated digital currency landscape.
Reference: UNU publication detailing the study findings and methodology.