Bitcoin mining has “very worrying” impacts on land and water

The emergence of new digital currencies on a global scale has raised concerns among experts due to their significant environmental impact. A study conducted by the United Nations has shed light on the hidden ecological consequences of Bitcoin.

The research, published in ‘Earth's Future’, highlights that the worldwide network for mining cryptocurrencies predominantly depends on fossil fuels. This reliance leads to alarming effects on water and land resources, and contributes substantially to carbon emissions.

The surge in cryptocurrency values over the past decade has attracted massive investments in this sector. With the advent of blockchain and other technological innovations, digital currencies have become a sophisticated component of today’s global financial system, experiencing a boom akin to a gold rush. However, this burgeoning market conceals a less glamorous aspect, as revealed by the study.

Bitcoin is the most well-known and popular cryptocurrency. This motivated UN scientists to assess the environmental impacts of Bitcoin around the world by looking at the activities of 76 Bitcoin mining nations over the period 2020-2021 and the results are “shocking.”

In addition to a significant carbon footprint, global Bitcoin mining activities have significant water and land footprints.

Professor Kaveh Madani, Director of the United Nations University Institute for Water, Environment and Health (UNU-INWEH), who led this study warns, "People often associate technological innovations with unintended consequences and Bitcoin is no exception. Our findings don't discourage the use of digital currencies. Instead, we should take them as encouragement to invest in regulatory interventions and technological advances that improve the efficiency of the global financial system without harming the environment."

Same energy consumption of 230 million people

"The study results, published by the United Nations University, revealed that the global Bitcoin mining network consumed 173.42 Terawatt hours of electricity during 2020-2021. This signifies that Bitcoin, had it been a country, would have ranked 27th in the world in terms of energy consumption, surpassing a country like Pakistan that has over 230 million inhabitants."

The equivalent carbon footprint resulted from burning 84 billion pounds of coal or operating 190 natural gas power plants. To compensate for this footprint, people would have to plant 3.9 billion trees, covering an area almost equal to the Netherlands, Switzerland or Denmark, or 7% of the Amazon rainforest.

During this time period, Bitcoin's water footprint equated to the amount of water required to fill more than 660,000 Olympic-sized swimming pools. This amount could satisfy the current domestic water needs of over 300 million people in rural sub-Saharan Africa. During the same period, Bitcoin mining activities occupied a land footprint globally that was 1.4 times larger than the area of Los Angeles.

Bitcoin depends on dirty fuels

UN scientists have reported that Bitcoin mining heavily relies on fossil energy sources. Coal accounts for 45% of Bitcoin's energy supply mix, followed by natural gas which contributes 21%. They further report that hydropower, despite its significant impacts on water and the environment, is the most important renewable energy source for the Bitcoin mining network, providing 16% of its electricity demand.

They note that nuclear power provides a substantial 9% share of Bitcoin's energy supply mix, while renewables like solar and wind provide only 2% and 5% of the total electricity Bitcoin uses.

China overwhelmingly leads as the nation with the most Bitcoin mining. To balance out the carbon emissions from China's carbon-intensive Bitcoin mining operations in 2021-2022, people would need to plant an estimated 2 billion trees.

This would mean covering an area as large as the combined total of Portugal and Ireland or 45,000 times the area of Central Park in New York. Besides China, the United States, Kazakhstan, Russia, Malaysia, Canada, Germany, Iran, Ireland, and Singapore also featured in the top 10 Bitcoin mining nations worldwide in 2020-2021.

2 billion trees may offset China's 2021-2022 Bitcoin emissions

"Since countries use different energy sources to generate electricity, the impact of their electricity production on climate, water and land is not the same," explains Sanaz Chamanara, lead author of the study and researcher on environment, and Governance (EGS) at UNU-INWEH--. The ranking of countries in terms of the environmental impact of their Bitcoin operations changes depending on what environmental footprint is considered."

Norway, Sweden, Thailand, and the United Kingdom make the top 10 list for their Bitcoin mining activities' water or land footprint. Collectively, the top 10 Bitcoin mining countries are responsible for 92-94% of Bitcoin's global carbon, water, and land footprints when we consider their environmental impact.

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