electricity consumption comparable to that of Poland

In 2024, the price of bit­coin soared, reach­ing its high­est lev­els since its cre­ation. Bit­coin is the most wide­ly used cryp­tocur­ren­cy. Its mar­ket cap­i­tal­i­sa­tion reached over $1.3 tril­lion on Octo­ber 21, 2024, com­pared with Ethereum’s $321 bil­lion just behind. One bit­coin is worth over $67,000 (as of Octo­ber 21, 2024). This surge has an envi­ron­men­tal cost, which is also ris­ing sharply. “Bit­coin is based on blockchain tech­nol­o­gy: by def­i­n­i­tion, com­put­ers per­form iden­ti­cal cal­cu­la­tions (around 15,000 times) to ensure the network’s secu­ri­ty,” explains Jean-Paul Dela­haye. “The pro­to­col used for bit­coin has a very high ener­gy cost; it’s an envi­ron­men­tal waste.”

Bitcoin’s high carbon and water footprint

The annu­al elec­tric­i­ty con­sump­tion ded­i­cat­ed to bit­coin min­ing [Editor’s note: the process by which bit­coins are issued and gen­er­at­ed] is com­pa­ra­ble to that of Poland. It is esti­mat­ed at 155 TWh per year to 172 TWh per year (or 162 TWh per year accord­ing to the Cam­bridge Cen­tre for Alter­na­tive Finance). The Inter­na­tion­al Ener­gy Agency (IEA), mean­while, esti­mates that cryp­tocur­ren­cies would have con­sumed 110 TWh of elec­tric­i­ty by 2022, or 0.4% of annu­al glob­al demand¹.

As a result, bitcoin’s car­bon foot­print is sig­nif­i­cant, and some sci­en­tists are warn­ing of the urgent need for action². In 2021, bitcoin’s envi­ron­men­tal foot­print sud­den­ly increased. While the major­i­ty of min­ers were based in Chi­na (73%), the coun­try decid­ed to ban bit­coin min­ing on its ter­ri­to­ry³. Most of the activ­i­ty is now relo­cat­ed to Kaza­khstan and the Unit­ed States. The car­bon foot­print of bit­coin min­ing is direct­ly linked to the green­house gas­es released dur­ing the pro­duc­tion of the elec­tric­i­ty that pow­ers the com­put­ers per­form­ing the cal­cu­la­tions. The more car­bon-inten­sive the country’s elec­tric­i­ty mix, the high­er bitcoin’s car­bon foot­print. The share of renew­able ener­gies pow­er­ing bit­coin min­ing has fall­en from 41.6% to 25.1% fol­low­ing the mas­sive relo­ca­tion in 2021. In 2022, the Cam­bridge Cen­ter for Alter­na­tive Finance esti­mates the share of renew­ables at 37.6% includ­ing nuclear pow­er and 26.3% exclud­ing nuclear pow­er ⁴. As a result, CO₂ emis­sions from bit­coin min­ing are esti­mat­ed at 77, 85 or even 96 mil­lion tonnes of CO₂ per year, depend­ing on the source. By com­par­i­son, France’s equiv­a­lent CO₂ emis­sions (all green­house gas­es com­bined) will amount to 385 mil­lion tonnes in 2023.

But the envi­ron­men­tal impact of bit­coin min­ing is not lim­it­ed to green­house gas emis­sions. In 2024, an arti­cle pub­lished in the jour­nal Cell Reports sus­tain­abil­i­ty⁵ esti­mates the water foot­print of the cryp­tocur­ren­cy. The author esti­mates that it will amount to 1.5 bil­lion litres of water in 2021. The cul­prit? The use of water for the cool­ing sys­tems of the servers used for min­ing, and indi­rect use to pro­duce elec­tric­i­ty via the cool­ing of ther­mo­elec­tric pow­er sta­tions. Oth­er authors arrive at dif­fer­ent esti­mates based on the envi­ron­men­tal foot­print of elec­tric­i­ty pro­duc­tion in the coun­tries host­ing bit­coin min­ers. Their esti­mates are much high­er, due to the inclu­sion of evap­o­ra­tion from hydro­elec­tric dams. They esti­mate bitcoin’s water foot­print at 1,650 bil­lion litres between Jan­u­ary 2020 and Decem­ber 2021 (the equiv­a­lent of 660,000 Olympic swim­ming pools), or around 800 bil­lion litres per year. “I find the deci­sion to include evap­o­ra­tion from hydro­elec­tric dams in the water foot­print of bit­coin min­ing a del­i­cate one,” says Jean-Paul Dela­haye. “It’s dif­fi­cult to dis­tin­guish between water used for bit­coin and oth­er uses.” As for the land foot­print, for the same peri­od it was esti­mat­ed at 1,870 km².

Reducing the environmental footprint of cryptocurrency by improving transparency and regulation

It is dif­fi­cult to accu­rate­ly cal­cu­late the envi­ron­men­tal impact of bit­coin min­ing. There is no reg­is­ter of the machines used for min­ing and their exact ener­gy con­sump­tion. “How­ev­er, we do have a min­i­mum esti­mate, which is enough to show that ener­gy con­sump­tion is exces­sive,” asserts Jean-Paul Dela­haye. The esti­mates are based on the “hash” com­put­ing pow­er of the net­work – known to with­in a few per­cent – and on the min­i­mum con­sump­tion by the best machines to pro­duce 1 hash, which is an opti­mistic view of the hard­ware in use. “There are two main method­olo­gies that have been devel­oped in recent years to assess the ener­gy con­sump­tion of the bit­coin net­work, one based on eco­nom­ic sim­u­la­tions and the oth­er on tech­nolo­gies,” explains Chris­t­ian Stoll. “But they pro­duce sim­i­lar results”. And with the rise in the price of bit­coin, the fore­casts are fair­ly pes­simistic: even if the rela­tion­ship is not uni­form, the high­er the price of bit­coin – remem­ber that it will reach record lev­els in 2024 – the high­er the ener­gy con­sump­tion will be⁶.

Bitcoin’s high ener­gy con­sump­tion is linked to the way it works, as Jean-Paul Dela­haye explained in a pre­vi­ous arti­cle: “The issue and cir­cu­la­tion of bit­coin is man­aged by a net­work of com­put­ers that oper­ates in a decen­tralised man­ner. Each com­put­er on the net­work holds a copy of the “blockchain”, a file sum­maris­ing all the infor­ma­tion on the con­tent of all the bit­coin accounts and all the trans­ac­tions car­ried out on the net­work. To encour­age new com­put­ers to take part in man­ag­ing the bit­coin net­work, a reward is dis­trib­uted every 10 min­utes to one of them in a com­pe­ti­tion called proof of work. We know this process as “min­ing”, and it is pre­cise­ly this process that involves a sig­nif­i­cant expen­di­ture of elec­tric­i­ty.” In 2021, around 2.9 mil­lion com­put­ing devices were ded­i­cat­ed to bit­coin min­ing. “Over the past 2 years, Ethereum has switched from a proof-of-work pro­to­col to a proof-of-stake pro­to­col: this has reduced the network’s ener­gy con­sump­tion by at least a fac­tor of 100,” points out Jean-Paul Dela­haye. By improv­ing trans­paren­cy and reg­u­la­tion, devel­op­ing alter­na­tive ener­gy-sav­ing cryp­tocur­ren­cies and adopt­ing green­er blockchain val­i­da­tion pro­to­cols, the sci­en­tists are call­ing for sev­er­al levers to be acti­vat­ed to reduce bitcoin’s envi­ron­men­tal footprint.

Anaïs Marechal