A UN study has revealed bitcoin’s hidden environmental impact as the cryptocurrency’s global mining network relies heavily on fossil fuels.
This results in a worrying impact on water and land, as well as a significant carbon footprint, warns the new assessment, published in the journal ‘Earth’s Future’.
The phenomenal rise in cryptocurrency prices over the past decade has driven massive investment in the sector. Thanks to blockchain and other technological advances, digital currencies are now an advanced element of the modern world financial system, with a boom comparable to the gold rush. However, this exciting market has a hidden dark side, according to the study.
Bitcoin is the most famous and popular cryptocurrency. This prompted UN scientists to examine the environmental effects of Bitcoin around the world by looking at the activities of 76 Bitcoin mining countries in the period 2020–2021, and the results were “shocking.” In addition to a significant carbon footprint, global Bitcoin mining activities have significant water and land footprints.
“Technological innovations are often associated with unexpected consequences, and Bitcoin is no exception,” said Professor Kaveh Madani, Director of the United Nations University Institute for Water, Environment, and Health, who led this study. Our findings should not discourage the use of digital currencies. On the contrary, they should encourage us to invest in regulatory interventions and technological advances that improve the efficiency of the global financial system without harming the surrounding atmosphere.”
According to the results of the study, published by the United Nations University, during 2020–2021, the global Bitcoin mining network will consume 173.42 terawatt hours of electricity. This means that if Bitcoin were a country, its energy consumption would be 27th in the world, ahead of a country like Pakistan, which has a population of over 230 million people.
The resulting carbon footprint is equivalent to burning 84 billion pounds of coal or running 190 natural gas power plants. To compensate for this footprint, 3.9 billion trees would need to be planted, which would cover an area roughly equivalent to the Netherlands, Switzerland, Denmark, or 7% of the Amazon rainforest.
During this time period, Bitcoin’s water footprint is equivalent to the amount of water needed to fill more than 660,000 Olympic-sized swimming pools, enough to meet the current household water needs of more than 300 million people in rural sub-Saharan Africa. The land footprint of Bitcoin mining activities worldwide at this time is 1.4 times that of the Los Angeles area.
UN scientists report that Bitcoin mining relies heavily on fossil energy sources, with coal accounting for 45% of Bitcoin’s energy supply mix, followed by natural gas (21%). Hydropower, a renewable energy source that has a significant impact on water and the environment, is the most important renewable energy source in the Bitcoin mining network, meeting 16% of its electricity needs.