Mining for bitcoin is on the most part a very energy consuming process, largely utilising fossil fuels. With a significant rise in interest surrounding cryptocurrencies over the last decade, the negative impact on water, land and the environment in general is growing. From some of the wealthiest investors in the world through to those just starting out with their disposable income, the possibilities that cryptocurrencies offer have garnered interest from many different types of investors, and as a result, an unfortunate consequence is the impact on the climate. So, we’re here to discuss what the environmental impact of bitcoin mining is, as well as what can be done to help this industry evolve.
How Bad Is Bitcoin Mining For The Environment?
Considering how modern the world of cryptocurrency is, you’d assume that the majority of the practices would be run in an environmentally friendly way, however this isn’t the case. Bitcoin mining is a very energy-intensive process where devices and software are used to add to the blockchain, as well as then consequently dealing with the transactions in the cryptocurrency world.
According to a UN Study, throughout 2020 and 2021, the global Bitcoin mining network consumed 173.42 Terawatt hours of electricity, which is more than the entire country of Pakistan with a population of over 230 million people. To put this into perspective, this is the equivalent of 84 billion pounds of coal being required, or needing to plant 3.9 billion trees in order to offset the damage. Plus, we’re not even onto the water yet. The same study revealed how the same amount of water was required to power the world of bitcoin mining as if you were to fill 660,000 Olympic sized swimming pools with water.
These statistics are pretty staggering, and whilst the cryptocurrency sector has provided valuable investment opportunities for investors at all levels, the extent to which the negative environmental impacts have been overlooked are shocking.
What Can Be Done To Make Bitcoin Mining More Eco-Friendly?
Currently, the UN study states that around 67% of the electricity consumed for Bitcoin mining was produced from fossil fuels. There are outlines of what countries should morally do in order to offset the damage caused by their contribution to bitcoin mining, however currently they have no legal obligation to do that. With the extent of the damage, we hope that eventually there is some responsibility on the large contributors to offset the damage, however there should also be more done to focus on making the bitcoin mining industry more reliant on renewable_energy sources.
The number of bitcoin miners utilising renewable energy sources is on the rise, however it’s still not really good enough. 52.4% of miners are using some form of renewable_energy, yet this includes both coal and gas, which we know aren’t the most viable or eco-friendly options. 23.12% of the renewable_energy used by miners comes from Hydro which is positive. Whilst in the long run renewably sourced energy is more cost effective, the barrier currently is likely access to the renewable sources, as well as the capacity of renewable energy. The way that the crypto world works needs constant access to consistent energy sources on an unbelievable level, and on the most part, the infrastructure to deal with this just isn’t there yet.
Whilst things are certainly moving in the right direction in terms of renewable energy in general, there is still a long way to go. So much has changed in the last few years, from people making a lot of money through to crypto scams becoming so much more advanced, yet one thing that has remained relatively stagnant is the lack of reliability on renewable energy. The main current barriers are infrastructure and the cost to implement that infrastructure, with such a significant change that would enable the world of crypto to continue to run as it does being difficult to materialise. However, something needs to be done, so there should be a push towards renewable energy markets to make this modern form of investment catch up with the times and to help prevent the massive amount of damage it’s currently contributing.
