The Environmental Effects of Bitcoin: Is (BTC) Harming Environment:

Many people are positive about cryptocurrencies such as Bitcoin, but critics point out a significant drawback: cryptocurrency mining consumes a lot of energy. While there are other ways to verify cryptocurrency transactions and create new coins, the two most popular cryptocurrencies, Bitcoin and Ethereum, use mining as their primary mechanism.

Continue reading to learn more about the environmental effects of Bitcoin and the amount of energy employed to mine cryptocurrencies. Find more about less energy-intensive alternatives to cryptocurrency mining.

What is Bitcoin?

A cryptocurrency, such as Bitcoin (BTC), eliminates the need for third parties to be involved in financial transactions by acting as money and a means of payment independent of any single person, group, or entity. It is available for purchase on numerous platforms and is given to blockchain miners as compensation for their efforts in verifying transactions.

By utilizing the alias Satoshi Nakamoto, an unidentified developer and group of developers presented Bitcoin to the general public in 2009.

Since then, it has grown to become one of the most well-known cryptocurrencies worldwide. Several additional cryptocurrencies have been developed as a result of its popularity. These rivals either want to displace it as a means of payment or are employed in those other blockchains and cutting-edge financial technology as utility and security tokens.

The Effects of Cryptocurrency on the Environment:

You must first grasp how new coins are created in a cryptocurrency in order to comprehend how cryptocurrencies affect the ecosystem. The blockchain depends on people to validate transactions and add fresh blocks of data because cryptocurrencies aren’t subject to centralized regulation. These blockchains must be extremely challenging and expensive to validate in order to defend against malicious actors trying to misuse this additional information. As a result, proof of work has been added to the majority of cryptocurrencies.

Proof of Work:

By resolving a challenging mathematical puzzle, users can validate cryptocurrency transactions via the proof of work consensus technique. The transaction is validated, and a predetermined amount of cryptocurrency is given to the first individual who completes the puzzle. Then the cycle resumes. The most popular consensus process is this one.

Cryptocurrency “mining” is really the process of executing computer programs that attempt to solve a problem. Your chances of being chosen to update its blockchain and receive prizes increase with the processing capacity of your machine. So, in order to outperform their rivals, miners are motivated to increase the power underlying their mining operations.

Application-Specific Integrated Circuit- ASIC Miners:

To further maximize processing resources towards solving such proof-of-work difficulties, application-specific integrated circuit – ASIC mines, extremely powerful processors designed with the express goal of mining a specific cryptocurrency algorithm, were developed. ASIC miners are able to mine the cryptocurrency, but given how fierce the competition is right now, they are now absolutely necessary for mining Bitcoin.

The founder of the hydroelectricity-powered Bitcoin mining startup Miners DeFi, Junior Theomou, claims that as more individuals mine extra Bitcoin, the level of competition increases. “Bitcoin mining becomes more challenging as there are more devices available on the market. As a result, there is currently a competition taking place between ever-more-machines that are mining.”

The Environmental Effects of Bitcoin:

Greenhouse Gas Emissions and Energy Use:

Similar to a criminal trying various passwords to hack yours, the method of attempting to come to an appropriate nonce that will yield the target hash is essentially trial and error and can take billions of tries. Bitcoin is estimated to use 707 kwH for each transaction, having hundreds of thousands and maybe more machines churning out estimates. The computers also require more energy since they must be kept cold and produce heat.

And while it’s impossible to tell precisely that how much electricity Bitcoin requires because various processors and cooling systems have variable degrees of energy conservation, a University of Cambridge investigation found that Bitcoin mining uses 121.36 terawatt hours annually. This is more than what Google, Apple, Facebook, and Microsoft together consume, or what all of Argentina consumes.

Because miners must constantly boost their computational capacity to compete with one another, the situation is only growing worse. However, because incentives are always being slashed in half, miners must process greater transactions or use less electricity in order to make mining profitable. Hence, miners must upgrade to faster, more power-hungry computers and look for the lowest electricity. The amount of energy used by Bitcoin increased about 62 times between March 2015 and 2021. Just 39% of this energy, largely from hydropower, is renewable, according to Cambridge University, and this has negative effects on biodiversity and ecosystems.

E-waste and Water Issues:

Also, huge volumes of water are consumed by power plants like Greenidge. Seneca Lake’s wildlife and environment are put in jeopardy when Greenidge withdraws up to 139 million freshwater gallons from the lake every day in order to cool the plant and releases it at temperatures that are 30 to 50 degrees Fahrenheit higher than the lake’s normal temperature. Larvae, fish, and other creatures are also sucked in and killed by its massive intake pipes.

Yet even if all bitcoin mining might one day be powered by renewable energy, the issue of e-waste would still exist. For their hardware to be competitive, miners need to be able to process the most calculations per energy unit. Every 1.5 years, this specialized hardware becomes obsolete and cannot be reprogrammed to perform any other tasks. According to estimates, the Bitcoin network contributes to our already significant e-waste problem by producing 11.5 kilotons of electronic garbage every year.


NFTs, a recent development in the art world, have increased environmental worries about cryptocurrencies since December. They are non-fungible tokens, which are digital images, audio files, video files, or other types of artworks imprinted with special code. NFTs are viewable and copyable, but each buyer owns a single, unique NFT that is kept on the blockchain and protected by the same resource-intensive proof of work procedure. Thousands of dollars are being paid for NFTs; digital artist Beeple sold one for above $69 million.

The NFTs are produced by Ethereum, the second-popular cryptocurrency after Bitcoin. The average NFT emits 440 pounds of carbon, which is 10 times more than the usual Ethereum transaction and is the same as driving 500 miles in gas powered automobile.

Energy use by Cryptocurrency:

The hash rate of the network and the energy used by commercially available mining rigs can be used to determine the amount of energy needed for cryptocurrency and Bitcoin mining. For instance, according to the Cambridge Bitcoin Electricity Consumption Index, the point of production for Bitcoin, the most popular cryptocurrency network, required 85 Terawatt-hours (TWh) of electricity (0.38% of the world’s total electricity consumption), as well as 218 TWh of energy (0.13% of the world’s total energy production).

Based on energy use through July 9, 2022, the figure is estimated to be 130.3 Terawatt-hours by the cryptocurrency analytics website Digiconomist. This equates to about 1,455.8 kilowatt hours of electricity used for each transaction, or about the same as what the typical American household uses in 49.9 days.

Assuming the prices and user acceptance continue to fluctuate, the amount of power and energy used by Bitcoin mining will probably change over time. Mining cryptocurrencies is a competitive activity; as the worth of a block reward rises, so do the incentives to begin mining. More energy is used by cryptocurrency networks as a result of higher cryptocurrency values.

Why Mining Cryptocurrencies Needs Energy:

The energy requirements of cryptocurrency mining are a benefit, not a flaw. The automated process of confirming Bitcoin transactions without having involvement of banks or other reputable third parties is known as “mine.”

The network depends on the processing capacity of thousands of mining machines; therefore, the way that the transaction validation procedure is built uses a lot of energy. Proof-of-work consensus-based cryptocurrency blockchains are kept secure by this reliance.

The Effects of Cryptocurrency Mining on the Environment:

It is more difficult to determine the carbon impact of cryptocurrencies. Although the majority of the nations where cryptocurrencies are mined use fossil fuels as their main energy source, miners must look for the least expensive sources of energy to stay profitable.

According to Digiconomist, Turkmenistan produces the same amount of carbon dioxide yearly as the Bitcoin network or around 73 million tons.

According to data up until September 2022, Ethereum produced roughly 35.4 million tons of carbon dioxide emissions until switching to proof of work, when those emissions decreased to 0.01 million tons.

Countries with the Greatest Influence:

The three countries with the greatest impact are Kazakhstan, China, and the United States, according to studies conducted by the University of Cambridge. The Center for Strategic and International Studies estimates that coal and crude oil account for around 76% of China’s energy consumption.

  • China accounts for 21% of the worldwide hash rate.
  • In the US, mining accounts for 38% of all mining.
  • According to EIA data from 2019, the majority of the U.S.’s power is produced by burning fossil fuels.
  • 13% of the world’s Bitcoins are mined in Kazakhstan, which mostly employs fossil fuels.
  • As a result, almost 72% of the world’s Bitcoin mining is done by three nations that rely largely on fossil fuels.

Electronic Waste:

Due to the rapid obsolescence of mining equipment, cryptocurrency mining also produces a substantial amount of electronic trash. This is particularly valid for Application-Specific Integrated Circuit (ASIC) miners which are specialized devices made for mining the most widely used cryptocurrencies. The Bitcoin network, according to Digiconomist, produces over 38 thousand tons of electronic garbage per year.

Can Cryptocurrency Mining Use Low Energy?

Large-scale Bitcoin miners are frequently found in areas with inexpensive, dependable, and abundant energy. Yet, it is not necessary for the production of new coins and the processing of Bitcoin transactions to be energy-intensive.

Another alternative to cryptocurrency mining that uses less computational power is the proof-of-stake (PoS) technique of approving transactions and creating new coins. Instead, the capacity to manage the crypto network and validate transactions is predicated on the amount of Bitcoin that validation has “staked,” or committed not to sell or trade, in exchange for their authority.

Other validation techniques are also being developed, including proof of time passing proof of history, proof of burn, as well as proof of capacity. There is no such goal in the Bitcoin community; however, Ethereum’s developers have decommissioned the blockchain’s proof-of-work mechanism, including estimates calling for a 99.9% decrease in carbon dioxide emissions.

Because Bitcoin has become the most widely used cryptocurrency, mining, and its high energy costs are probably here to stay.

Frequently Asked Questions:

 Is Cryptocurrency Friendly to the Environment?

Certain cryptocurrencies require a lot of energy, specialized equipment, and garbage to operate. Yet, it’s crucial to keep in mind the environmental costs of harvesting natural resources and using energy and electricity to create and sustain fiat currency and the current banking system. In that regard, usually, these are not environmentally friendly.

Can Bitcoin Become More Environmentally Friendly?

In other words, it seems doubtful that Bitcoin will minimize its energy footprint given how energy-intensive, competitive, and reward-based the validation process is. The network will still need a great deal of power to validate transactions once the final Bitcoin is awarded.

How many Cryptocurrencies can be Renewed?

The percentage of energy derived from renewable sources that is now consumed by cryptocurrency cannot be determined because of a lack of official data.

Does Bitcoin Affect the Environment?

Bitcoin damages the ecosystem. This is because electricity used to create bitcoins was produced in part by coal- and gas-fired power stations. Burning natural gas and coal releases greenhouse gases that warm the planet and alter its climate. According to estimates, such bitcoin mining will account for 0.1% of global greenhouse gas emissions as of 2022.

What makes Bitcoin a Pollutant?

“Bitcoin mining, or production, requires enormous amounts of electricity, the majority of which is derived from fossil fuels like coal and natural gas. Massive quantities of air pollution as well as carbon emissions are being produced as a result, which is harmful to both human health and the global environment.

How can Bitcoin Pollution be Decreased?

Limit the energy efficiency of miners: Encourage the use of renewable energy by using financial regulatory mechanisms to impose stricter disclosure requirements for carbon emissions from digital assets. By mandating higher energy prices for high-density energy users, communities as well as small businesses will be safeguarded.

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