Ever since open source bitcoin software was introduced by an anonymous computer programmer in 2009, this new technology rapidly gained the attention of the financial sector as a quick and easy way to make money not subject to governmental regulation like print money.
At the outset, the hidden environmental costs of bitcoin were unrecognized. Recent research and investigations by governments, international organizations, nonprofits, and scholars are revealing the major environmental impacts of bitcoin mining.
Here we’ll unpack how bitcoin mining spells nothing but bad news for both the climate and the environment.
What is bitcoin?
Bitcoin is the most popular and world’s largest cryptocurrency, an exclusively digital money that exchanges independently of a central bank, so it’s not prone to inflation like print money is. Since its beginnings, bitcoin has been the most highly valued and widely tracked of all kinds of cryptocurrency through a blockchain ledger system. The ledger is decentralized and public, making all transactions—which remain anonymous—verifiable by users.
To date, few merchants accept bitcoin—or any cryptocurrency for that matter—as payment for goods or services. Bitcoin is mainly used by speculators to turn a profit through buying and selling, much like stocks in a company. The cryptocurrency market is highly volatile and there are fees and taxes associated with cash conversions.
What is bitcoin mining?
Bitcoin comes into existence through mining accomplished by computers (called miners) performing sophisticated calculations. They may run through trillions of calculations per second, trying to match the chosen number selected by the bitcoin network’s algorithm.
The first miner to guess that number correctly wins bitcoins—which may be worth hundreds of thousands of dollars—as a reward. After the win, which occurs in minutes, the game begins again with a newly chosen number to match.
With bitcoin mining, there is no physical extraction involved like there is for minerals such as lithium or cobalt which are actually dug out and removed from the Earth.
What are the environmental impacts of bitcoin mining?
Although carbon emissions fueling the climate crisis are the most frequently cited environmental impact of bitcoin mining, land and water use are also significant for what critics refer to as a profit-centered hobby responsible for a frivolous waste of resources. A recent United Nations report detailed the global environmental impacts of bitcoin mining.
It’s also worth noting that fossil fuel burning contributes to air pollution, responsible for roughly 8.1 million premature deaths annually.
Carbon impacts of bitcoin mining
To operate, bitcoin mining consumes massive quantities of electricity. In a 2023 investigative report by the New York Times, up to 96% of that electricity is produced by burning fossil fuels. In terms of carbon pollution, that’s equivalent to 3.5 million gas-powered cars, according to the tech nonprofit WattTime.
Based on their analysis of 34 large bitcoin mines in the US, the Times calculated that each one uses at least 30,000 times as much power as the average home in America. Viewed together, that’s equal to approximately 3,900 megawatts of electricity, the same as that used by three million homes or all residences in New York City.
To make matters worse, the Times report found that bitcoin mines manipulate the US power market and make millions of dollars in profits while doing so. They have figured out how to avoid peak-demand utility fees, resell their electricity at a high cost (upwards of 100 times what they paid) when prices spike in a black- or brownout, and be paid for contracting to turn off usage even though they rarely do.
Although many neighbors—up to a half mile away—complain of the constant noise pollution caused by huge fans needed to cool the computers, some states welcome bitcoin mines. They help the economy, especially if fossil fuels are already present. In North Dakota, for example, Josh Teigen, the commerce commissioner, commented: “They are propping up our fossil fuel industry, and that’s exactly what we want.”
Bitcoin mining may also result in the reopening of fossil fuel plants, much to the chagrin of local residents. In upstate New York, for instance, a gas-powered plant reopened primarily to power a bitcoin mine.
A few bitcoin mines are operated by owners of local fossil fuel plants, including two burning waste coal in Pennsylvania.
According to the Cambridge Bitcoin Electricity Index (CBEI) which tracks electricity use and greenhouse gas (GHG) emissions from bitcoin mining, if bitcoin were a country, it would rank as the 25th highest user of electricity and 65th for greenhouse gas emissions.
The CBEI estimates that bitcoin mining produces 81.2 MtCO2eq (megatons of carbon dioxide equivalents) annually. This amount is only slightly less than that for gold mining (100.4 MtCO2eq).
Water impacts by bitcoin mining
According to a 2023 article assessing the environmental footprints of bitcoin mining, in 2020–2021, the global water footprint of bitcoin mining was roughly 1.65 km3, or 426,000 gallons. That’s enough to fill more than 660,000 Olympic-sized swimming pools. In total, that’s more than the domestic water use of 300 million people in rural Sub-Saharan Africa.
China, US, and Canada had the largest water footprints from bitcoin mining. Kazakhstan and Iran, although experiencing chronic water shortages, were also heavy users. In fact, in 2021, Iran faced blackouts that the government blamed on bitcoin mining draining hydropower capacity during a drought. As a result, the government periodically banned it.
Land use impacts by bitcoin mining
Bitcoin mining impacts land use by requiring large areas to produce the energy needed for the practice. In 2020-2021, the global land use footprint of bitcoin mining was 1,870 square kilometers (722 square miles), equivalent to 1.4 times the area of Los Angeles. For the US, it’s 303 square kilometers (117 square miles) and growing.
Is bitcoin mining bad for the climate?
Considering the massive amounts of carbon dioxide emissions generated from the high levels of electricity used, bitcoin mining is disastrous for the climate.
In fact, the 2024 State of the Climate Report minces no words about the dire state of our planet home. Its opening sentence announces: “We are on the brink of an irreversible climate disaster.”
In this scenario, any energy-intensive activity that accelerates movement toward that cliff’s edge without contributing to survival is “undesirable”—to use the Chinese government’s word for why it banned bitcoin mining in 2021.
What will be the effect of increased carbon emissions from bitcoin mining on the climate?
The Intergovernmental Panel on Climate Change (IPCC), in their 2023 AR6 Synthesis Report, the closing chapter of the Panel’s sixth—and latest—assessment, clearly states “with high confidence”: “Continued greenhouse gas emissions will lead to increasing global warming, with the best estimate of reaching 1.5°C in the near term…Every increment of global warming will intensify multiple and concurrent hazards.”
So far, the global average of surface air temperature increase above pre-industrial levels is typically given as 1.2°C (2.0°F). In June 2024, the average reached 1.5°C (2.7°F) for the past 12 consecutive months. The World Meteorological Organization predicts that the global average temperature will fluctuate between 1.1 and 1.8°C above pre-industrial levels for the next several years at least.
The press release signaling the Synthesis Report’s publication is even clearer on the task before humanity: “Keeping warming to 1.5°C above pre-industrial levels requires deep, rapid, and sustained greenhouse gas emissions reductions in all sectors. Emissions should be decreasing by now and will need to be cut by almost half by 2030, if warming is to be limited to 1.5°C.”
Despite such clear warnings of intensified climatic events with even small increases in carbon emissions, current greenhouse gas releases and planned fossil fuel projects continue to accelerate, putting all of humanity on a fatal trajectory.
“Climate justice is crucial because those who have contributed least to climate change are being disproportionately affected. Almost half of the world’s population lives in regions that are highly vulnerable to climate change. In the last decade, deaths from floods, droughts and storms were 15 times higher in highly vulnerable regions,“ said Aditi Mukherji, one of the 93 authors of the Synthesis Report.
“The greatest gains in well-being could come from prioritizing climate risk reduction for low-income and marginalized communities, including people living in informal settlements. Accelerated climate action will only come about if there is a many-fold increase in [climate] finance. Insufficient and misaligned finance is holding back progress,” said Christopher Trisos, another of the Report’s authors.
