Mining and ecology: a real danger or an exaggeration of the problem?

  • 16:57 Mar 14, 2023
Mining and ecology: a real danger or an exaggeration of the problem?

The Cambridge University calculator constantly calculates how much power is consumed for “mining” and Bitcoin transactions. To date, at the beginning of March 2023, this figure is 122.55 TW*h per year. This corresponds to the total consumption of several European countries.

Starting this article with impressive data, let's look at the causes of the negative impact of mining on the environment and try to identify ways to solve the problem.

“Hows” and “whats” of minings’ environmental impact

The fact that virtual "currency" causes significant damage to the environment is explained by three reasons.

The first problem: cryptocurrencies are created as a result of complex codes that can only be solved with the help of the giant computing power of a PC; this is called "mining". To decipher codes, an entire industry has now been created, which is engaged in the production of cyber money on its own "mining computer farms".

These farms, in turn, consume a huge amount of energy – it comes to the point that they regularly cause large-scale power outages. And since the amount of energy consumed depends on the size of the mining network, more and more energy is required to mine new coins.

Environmentalists fear that this may attract miners to where electricity is cheapest – and these may be places where coal is used to generate electricity, in particular. The example of China confirms these concerns: of course, most digital currencies are mined in China. And although the country is moving towards renewable energy sources, about two-thirds of electricity is produced by coal.

The second problem: transactions with these "coins" in the blockchain also require a lot of energy, since this again has to face monstrous difficulties: a crypto transfer is something other than a simple credit card payment. Each Bitcoin transaction currently consumes 313 kilograms of CO2. To get a similar value, you could make a payment 695,000 times using your Visa card. Or watch movies on YouTube for 52,000 hours.

The third point: mining requires its own specialized computers, which, in turn, create their own electronic waste; and at the same time, these devices need to be updated at a rapid pace: after about 18 months, such equipment needs to be replaced. Thus: the annual demand of the Bitcoin industry for equipment is about the same as in a small European country. Or it can be calculated differently as well: about 135 grams of electrical waste always change hands when making a transaction with Bitcoins.

Is it possible to make the mining process more environmentally friendly

Anticipating the subsequent more detailed explanation, we can immediately give a short answer to the question asked - yes, it is possible.

The leaders of not comforting statistics reflecting the environmental damage caused by mining are popular cryptocurrencies such as Bitcoin. They work using the so-called Proof-of-Work (PoW) system, and it is because of this that mining farms are being established, causing enormous harm to the environment.

But there are alternatives to these energy-intensive blockchains. Unlike Bitcoin, such blockchain solutions are not based on the Proof-of-Work principle, but follow the Proof-of-Stake (PoS) principle.

For comparison, Proof-of-Stake (PoS) does not require continuous mining operations, which makes the whole process less energy-intensive. Here validators are randomly selected to generate the corresponding block. In PoS, miners generate or verify blocks depending on the number of coins they own. Eliminating the competitive element saves a lot of energy, since the PoS system only works on one problem at a time, whereas several PoW systems work on solving the same problem.

Statistics for comparison

To make it clear that the transition from PoW to PoS will lead to significant energy savings, let's give an example of Ethereum, which used up to 94 TW*h per year for classic ETH before the transition. By switching to PoS and introducing ETH 2.0, electricity consumption decreased by more than 99.88%, and the carbon footprint decreased by 99.992%.

However, even when using PoW, energy consumption will not always reach frightening indicators, so Bitcoin Cash and Lightcoin consume 0.88 TW * h and 0.62 TW*h per year, respectively, while Dogecoin consumes 0.002 TW*h per year, which is even less than Cardano on PoS with 0.01 TW*h per year.

But to get a full picture, you should compare the energy consumption of cryptocurrencies with a number of other well-known services and companies. So, PayPal spends about 0.25 TW*h per year, PlayStation 8.3 TW* h per year, Amazon 30.9 TW*h per year, and YouTube 243.6 TW*h per year. In total, about 25,000 TW*h per year is consumed throughout the planet, according to the International Energy Agency.

Until August 2022, Bitcoin accounted for 60% to 77% of the total global electricity consumption by crypto assets, and Ethereum accounted for 20% to 39%, but no matter how impressive these figures may seem at first glance, in fact it is only about 0.9% of the global annual electricity consumption.

Eco-alternatives to energy sources

Many cryptocurrency mining companies quickly realized the importance of improving energy efficiency and reducing environmental impact. To mitigate this, some companies use environmentally friendly energy sources such as solar or wind power. Many companies are also using artificial intelligence (AI) and machine learning to improve their crypto mining algorithms and reduce energy consumption. 

In addition, "green" cryptocurrencies have recently attracted more and more attention as they seek to promote sustainable, environmentally friendly approaches to cryptocurrency mining. For example, Chia is a "green" cryptocurrency that uses storage devices, not electricity, for its PoS. Ultimately, these efforts show that large crypto miners are aware of the impact of their activities on the environment; from switching to renewable energy sources to developing innovative approaches.

Another approach currently being discussed to reduce power consumption in the mining process works similarly to converting excess electricity into hydrogen using electrolysis. This means that during periods of overspending of electricity and, accordingly, overloading, when electricity prices are negative, it is not supplied to the network, but is used for energy-intensive crypto mining. Thus, the coins are generated by the operator of the mining plant at a certain time, so that in fact the "excess" electricity can be used economically, and not just regulated.

The turning point for mining should also be the opening in the very near future of Talen Energy's first Cumulus data processing center in the United States, which operates at a nuclear power plant for bitcoin mining. The facility, which is directly linked to the Susquehanna Nuclear Power Plant, is the result of Talen Energy's relationship with the leading bitcoin mining company TerraWulf. 

Hydroelectric power plants are also great for producing cryptocurrencies. This is already practiced in Austria and is called Hydrominer. This is a private company that owns three of its own hydroelectric power plants, which they use to generate cryptocurrency. The advantage of hydropower is that it has no problems with cooling, and the source is constantly present.


It is definitely impossible to say that cryptocurrencies are the winner in the nomination “Climate Hero”. Their annual carbon footprint and energy consumption levels exceed those in some individual countries.

However, comparing the share of annual energy consumption by cryptocurrencies with other companies and services, as well as comparing them with data for the whole planet, we can definitely come to the conclusion that the threat of mining to the environment is overestimated.

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