Bitcoin is accused of consuming as much electricity as a country, emitting toxic gases like factories, and creating mountains of electronic waste. But supporters counter: This is just a hype and bitcoin is "greener" than ever.
Bitcoin - the digital currency that "consumes" electricity
Bitcoin is not only noteworthy for its financial value but also for the vast amount of energy it consumes. The technological heart of bitcoin - the Proof of Work (PoW) mechanism - requires miners to use powerful computers to solve cryptographic problems. Whoever solves it first validates the new transaction block and receives a reward in Bitcoin.
When bitcoin first emerged, personal computers were sufficient to participate. But as more people entered mining, the difficulty increased, forcing "mining farms" to invest thousands in specialized ASIC machines to maintain algorithm-solving speed. This caused electricity consumption to skyrocket.
As of 2018, the electricity consumption of the bitcoin network was equivalent to that of the entire country of Nigeria or Denmark. A single bitcoin transaction can consume over 1,100 kWh - the amount of electricity a typical American household uses in over a month.
Not only does it consume electricity, but bitcoin is also accused of harming the environment on four fronts:
CO2 emissions: Most of the energy used to mine Bitcoin still comes from coal or gas - which have high emissions. At times, it is estimated that up to 90% of the electricity used for mining Bitcoin comes from fossil fuels.
Cooling water consumption: Mining machines generate significant heat, requiring large cooling systems that consume tens of thousands of liters of water per transaction.
Creating electronic waste: Mining machines become obsolete quickly, often replaced after 1-2 years. The consequence is thousands of tons of toxic electronic waste produced.
Large-scale electricity consumption: The total electricity consumption of the bitcoin network at times rivals that of a medium-sized country.
A typical example is that each bitcoin transaction is said to produce 620kg of CO2, millions of times more than a VISA card transaction. Bitcoin mining is also considered to cause more severe pollution than the gold mining industry.
Even companies that once supported bitcoin must be cautious. Tesla stopped accepting bitcoin payments in 2021, citing environmental concerns. Meanwhile, ethereum, the second-largest digital currency, switched to a Proof-of-Stake (PoS) mechanism in 2022 to reduce energy consumption.
Bitcoin supporters counter, is bitcoin "going green"?
However, the bitcoin community is not sitting idle. They criticize many "shocking" studies as outdated and inaccurate. According to the Digital Asset Research Institute (DARI), a study from 2018 has been misquoted thousands of times up to 2024, while only 2% of articles reflect the actual situation.
Many also argue that comparisons between bitcoin and VISA are misleading: Visa only processes transactions, while bitcoin handles both storage and verification without intermediaries.
Instead of just opposing, the bitcoin mining industry also has notable efforts:
Switching to renewable energy: Many mining operations are using solar, wind, or hydroelectric power. Ethiopia, for example, uses clean energy from the Grand Renaissance Dam to mine bitcoin.
Utilizing excess electricity: Some mining facilities choose to use surplus electricity from the grid - which would otherwise be wasted if not used.
Optimizing equipment: Companies are improving technology to reduce electricity consumption per bitcoin mined.
Some studies in 2024 show that the share of renewable energy in bitcoin mining operations has surpassed 50% and is increasing. Some reports even claim that new bitcoin mining activities have reduced global CO2 emissions by utilizing surplus energy or "flared gas" in remote areas.
Despite signs of being "greener", bitcoin still faces skepticism. Due to its decentralized nature, no one can accurately measure the total CO₂ emissions of the entire network. The fact that some companies self-report "carbon neutrality" has yet to be transparently verified.
A controversial example is a video by Pierre Rochard (Riot Platforms), in which he measures CO2 emissions at a mining facility and claims low emissions. But scientists counter that the equipment he used does not measure emissions from the electricity production stage, which accounts for most of the emissions.
Additionally, some people question: The traditional banking sector also consumes enormous amounts of electricity (for office buildings, data centers, ATMs...), so is it fair to criticize only bitcoin?
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