A recent research investigation conducted by the United Nations has spotlighted apprehensions regarding the potential environmental repercussions of Bitcoin (BTC). As outlined in the findings released by the United Nations University and Earth’s Future, despite being the most widely recognized cryptocurrency, Bitcoin is associated with ‘troubling consequences for climate, water, and land,’ primarily originating from its mining operations.
Analysis of Bitcoin’s energy consumption
The study delved into the operations of 76 Bitcoin mining nations over the period spanning 2020 to 2021. In this interval, the global Bitcoin mining network devoured a staggering 173.42 Terawatt hours of electricity, a level that would rank it 27th among nations if considered as such, outpacing densely populated countries like Pakistan.
This prodigious energy consumption translated into a carbon footprint equivalent to burning 84 billion pounds of coal or the output of 190 natural gas-fired power plants.
The research also underscored the substantial dependence of Bitcoin mining on fossil fuel sources, with coal making up 45% of Bitcoin’s energy supply mix, followed by natural gas at 21%. Renewable energy sources like hydropower, albeit impactful on water resources, contributed 16% of the electricity supply. Nuclear energy accounted for 9%, while solar and wind energy represented 2% and 5%, respectively.
Furthermore, the water footprint of Bitcoin mining was akin to the volume required to fill over 660,000 Olympic-sized swimming pools, sufficient to meet the current domestic water needs of more than 300 million people in rural sub-Saharan Africa. Additionally, the land footprint resulting from global Bitcoin mining activities over this period amounted to 1.4 times the area of Los Angeles.
The necessity of establishing a regulatory framework.
It’s important to highlight that the researchers emphasized that these findings should not deter the use of digital assets. Notably, China emerged as the leading nation in Bitcoin mining, with the United States, Kazakhstan, Russia, Malaysia, Canada, Germany, Iran, Ireland, and Singapore following closely.
In response to these insights, UN scientists put forth a series of recommendations to governments for monitoring and mitigating the environmental consequences of cryptocurrencies. They also advocated for investments in more energy-efficient digital currencies with reduced adverse environmental impacts.