As demand for the digital currency continues to rise following an election that witnessed victory for pro-crypto candidates led by President elect Donald Trump, Bitcoin has reached an all-time high of $100,000 and is captivating investors worldwide. However, beneath the joyous headlines is an important question, “At what cost to our planet has this digital fortune been built?”
How Bitcoin mining works:
Bitcoin mining is based on the proof of work (PoW) mechanism which uses powerful computers to secure the blockchain network and validate transactions. The projected yearly electricity consumption for this procedure is 63 terawatt-hours (TWh) which is approximately equal to Poland‘s annual energy use.
How Bitcoin mining affects Climate:
Since many mining locations still rely heavily on fossil fuels for electricity, this energy consumption directly contributes to greenhouse gas emissions which are the main cause of climate change.
The results show that almost 15.1 million metric tons of CO₂ are produced in the US each year, accounting for about 46% of all emissions from Bitcoin mining worldwide. China continues to be a prominent player in the bitcoin mining industry despite legal limitations both as a big source of emissions and as a leading manufacturer and supplier of mining equipment.
China and Kazakhstan also make substantial contributions accounting for 13% and 20% of all mining emissions respectively.
From 2020 to 2021, the analysis found that the mining of bitcoin generated 85.89 MTCO2E, or metric tons of carbon dioxide equivalent to 9,665 gallons of gasoline used by passenger cars or 96,210 pounds of coal burned annually.
The White House points to the fact that Bitcoin requires more energy than all other cryptocurrencies combined, according to the September 2022 report.
Increasing e-waste issue with Bitcoin:
From hazardous chemicals and heavy metals seeping into soils to air and water pollution from inappropriate recycling like e-waste poses an increasing threat to our ecosystem.
Bitcoin mining alone may produce more e-waste than is currently estimated worldwide. The quantity of e-waste generated by Bitcoin “may grow beyond 64.4 metric kilotons” year while the worldwide e-waste is predicted to increase by 70% between 2016 and 2050.
Bitcoin and Water:
Not just greenhouse gas emission and E-Waste are the issues of bitcoin towards the environment but also cryptocurrency mining uses a significant amount of water amid the global water crisis and its water demand may grow further amid this $100,000.
Large data centers use a great deal of water to cool their computers. In addition to cooling computers, water is used to reduce the temperature in coal and gas fired power plants that supply electricity to power the computers. This cooling water evaporates and can’t be used again. The water footprint of Bitcoin’s power need is further increased by water evaporation from hydropower facilities. Water scarcity is already a problem in many countries and bitcoin consumes about 8.6 to 35.1 gigaliters (GL) of water per year in the U.S as per 2023 data is still a lot amid the bitcoin growth.
As Bitcoin reshapes global finance, can it also reinvent itself as an eco-friendly technology? The race to $100,000 is over but the race for sustainability has just begun.
