Cryptocurrency mining is an energy-intensive activity. Keeping it running consumes as much energy as Argentina, a country of 45 million people. However, its impacts go well beyond its climate emissions, according to a new study. A team of researchers found mining crypto also has massive water and land footprints, mainly in China and the US.
Crypto goes brrr
In the past decade, cryptocurrency has gone from a niche technology to a multi-billion dollar deal. But while it’s made some people a lot of money (and lost others a lot of money), cryptocurrency, and its poster child Bitcoin, are increasingly under scrutiny due to their environmental impact.
Bitcoin currently holds the largest share of the global crypto market with a 41% market share, leaving the other currencies far behind. Previous studies have found that Bitcoin (and mining Bitcoin in particular) can have a huge environmental cost.
Crypto mining is the process where a network of computers runs code work to ensure that transactions are legitimate and added correctly to the blockchain. Mining is also how crypto is entered into circulation. Computers compete to be the first ones to validate a series of transactions called a block and add it to the blockchain. This process is energy-intensive.
However, there are other environmental impacts linked to Bitcoin that have so far been largely overlooked.
Now, a group of UN scientists looked at the activities of over 70 Bitcoin mining countries during the 2020-2021 period and found a shocking environmental impact. As well as a very high carbon footprint from the use of computers, global Bitcoin mining has a significant water and land footprint, with them suggesting stronger government interventions.
“A lot of our exciting new technologies have hidden costs we don’t realize at the onset,” Kaveh Madani, a Director at United Nations University who led the new study published in the journal Earth’s Future, said in a news release. “We introduce something, it gets adopted, and only then do we realize that there are consequences.”
Impacts of Bitcoin
If it were a country, Bitcoin mining would be ranked 27h in energy use globally, the researchers found. It would rank higher than countries like Argentina or The Netherlands.
The energy used also keeps growing. Overall, Bitcoin consumed about 173 terawatt hours of electricity in 2020 and 2021, about 60% more than the energy used in 2018-2019. To make matters even worse, much of this mining happens in countries that have abundant, cheap, fossil fuel resources. Bitcoin mining emitted about 86 megatons of carbon due to the use of fossil fuels in Bitcoin-mining countries.
This is the equivalent of operating 190 gas-fired power plants. To offset this footprint, almost four billion trees should be planted, an area equal to 7% of the Amazon rainforest.
On water, Bitcoin also fares poorly. Bitcoin mining used 1.65 million liters in the same two-year period, which is enough to fill over 660,000 Olympic-sized swimming pools – enough to meet the domestic needs of 300 million people in rural Sub-Saharan Africa. China, the US and Canada had the largest water footprints, followed closely by Iran and Kazakhstan.
The researchers also analyzed land use impact by considering the area of land affected to produce energy for mining. They found that the footprint of Bitcoin was 1,870 square kilometers, equivalent to 1.4 the area of Los Angeles. China took up over 900 square kilometers and the US over 300 square kilometers, the top two countries.
In fact, China and the US are the top two countries across all environmental factors. A mix of other countries make up the other eight spots in the top 10. Kazakhstan, Malaysia, Iran and Thailand, countries to which servers are outsourced, appear as well. Each country engaged in mining affects others by their carbon emission, Kaveh said.
Can we fix Bitcoin?
Supporters of Bitcoin claim that Bitcoin mining and transactions have become more eco-friendly, and can become even more eco-friendly. However, the UN scientists focused more on regulation.
The researchers made a set of recommendations regarding possible interventions by governments to monitor and mitigate the environmental impacts, such as increased crypto mining electricity prices and taxes on crypto revenues and transactions. They also suggested investing in other, non-Bitcoin types of digital currencies that are energy efficient.
Some countries have already seen their resources potentially impacted by crypto mining. In 2021, Iran faced blackouts and the government blamed Bitcoin mining for draining hydropower during a drought, banning the practice. In 2021, China banned Bitcoin mining and transactions, with other countries considering similar measures.
“When you note which groups are currently benefiting from mining Bitcoin and which nations and generations will suffer the most from its environmental consequences, you can’t stop thinking about the inequity and injustice implications of the unregulated digital currency sector,” Madani said in a news release.