Toronto, Oct 25 Mining cryptocurrencies can have major environmental impacts on climate, water, and land, according to new research by United Nations scientists.
As bitcoin and other cryptocurrencies have grown in market share, they’ve been criticised only for their heavy carbon footprint.
In the new study, the UN scientists evaluated the environmental impacts of Bitcoin -- the most renowned and popular cryptocurrency -- across the world by looking at the activities of 76 Bitcoin mining nations during the 2020-2021 period.
In addition to a substantial carbon footprint, global Bitcoin mining activities have significant water and land footprints, showed the results published in the journal Earth’s Future.
According to Kaveh Madani, a Director at United Nations University who led the new study, the findings were "very interesting and very concerning," in part because demand is rising so quickly.
But even with more energy-efficient mining approaches, if demand continues to grow, so too will mining's environmental footprints, he said.
"Technological innovations are often associated with unintended consequences and Bitcoin is no exception," said Professor Madani.
The study showed that the global Bitcoin mining network consumed 173.42 Terawatt hours of electricity during 2020-2021.
The resulting carbon footprint was equivalent to that of burning 84 billion pounds of coal or operating 190 natural gas-fired power plants.
Further, Bitcoin’s water footprint was also similar to the amount of water required to fill over 660,000 Olympic-sized swimming pools, enough to meet the current domestic water needs of more than 300 million people in rural sub-Saharan Africa.
The land footprint of worldwide Bitcoin mining activities during this period was 1.4 times the area of Los Angeles.
The UN scientists report that Bitcoin mining heavily relies on fossil energy sources, with coal accounting for 45 per cent of Bitcoin’s energy supply mix, followed by natural gas (21 per cent).
Hydropower, a renewable energy source with significant water and environmental impacts, is the most important renewable source of energy of the Bitcoin mining network, satisfying 16 per cent of its electricity demand.
Nuclear energy has a considerable share of 9 per cent in Bitcoin’s energy supply mix, whereas renewables such as solar and wind only provide 2 per cent and 5 per cent of the total electricity used by Bitcoin.
The report also showed that together, the top 10 Bitcoin mining countries -- China, US, Kazakhstan, Russia, Malaysia, Canada, Germany, Iran, Ireland, and Singapore -- in terms of environmental footprint are responsible for 92-94 per cent of Bitcoin's global carbon, water, and land footprints.
"Our findings should not discourage the use of digital currencies. Instead, they should encourage us to invest in regulatory interventions and technological advancements that improve the efficiency of the global financial system without harming the environment," said Professor Madani.
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