crypto bitcoin mining

The Environmental Impact of Crypto Mining And Solutions


Intensive research carried out by environment and earth advocates says crypto mining has an environmental impact. This is due to the rate of energy that is required to mint new crypto coins. Mining is a method that is needed to validate cryptocurrency transactions.

We’ll explain the process that is involved in crypto mining, how this activity impacts the environment, and how to minimize its effect on humans and the environment.

Renewable Energy for Crypto Mining To Reduce The Environmental Impact of Bitcoin Mining
This photo shows CleanSpark Inc’s Bitcoin Mining Facility at Norcross, Georgia, United States. The facility is 100% carbon neutral, using nuclear and solar energy. Source: @CleanSpark_Inc

What Crypto Mining Is About

Crypto mining involves verifying and adding transactions to the blockchain digital ledger. The mining process is complex to a non-technical person because it involves complex computations and requires considerable computer processing power. It needs a substantial amount of energy.


Let’s take Bitcoin mining, for instance, involves an energy-intensive process, raising critical questions about its sustainability and the pressure it puts on earth’s scarce resources.

But when one considers the benefits of cryptocurrencies, they have an edge over traditional fiat currencies, including:

  • anonymity,
  • independence from central authorities,
  • potential for financial inclusion
  • reducing transaction costs by eliminating middlemen.
  • increasing access to financial services, particularly in regions with limited traditional banking.
  • enabling quick and secure cross-border transactions.

However, one major concern about crypto such as Ethereum and Bitcoin lies in the process of crypto mining.

The power consumed in this process has ignited a debate in the United States and many crypto-friendly countries around the world.

The Energy Consumption of Crypto Mining

A report by Earthjustice, estimated that Bitcoin mining consumed 36 billion kilowatt-hours (kwh) of electricity in 2021.

According to the report, the electricity consumption of BTC mining is as much as the energy consumption of four states – Rhode Island, Maine, New Hampshire, and Vermont – combined.

If Bitcoin were a country, its energy consumption would be among the top 30 energy users worldwide.

Also Read:  Overview of Bitcoin Price in July 2022

Now, let’s put Bitcoin energy consumption into perspective to have a glimpse of crypto mining’s energy usage viz-a-viz three other sectors:

Data Centers:

A fact sheet by the White House says the electricity consumption of crypto mining is between 0.4% to 0.9% of annual global electricity usage, which “is comparable to the annual electricity usage of all conventional data centers in the world”.

Electric Vehicle Charging:

The annual energy consumed in mining Bitcoin surpasses the energy used in charging all electric vehicles globally.

According to the International Energy Agency (IEA), energy consumed in charging all the electric vehicles globally per year in 2022 was about 110 TWh of electricity compared to Bitcoin’s 127 terawatt-hours (TWh) a year in mining BTC, says RMI.

Household Consumption:

The power consumed by Bitcoin mining exceeds the total electricity usage of some countries such as:

  • Norway, whose electricity consumption was 123TWh in 2022
  • Egypt with just 16,031 kWh in July 2023
  • And many African countries combined.

These comparisons underscore the enormous energy consumption of crypto mining and highlight the need for energy-efficient alternatives.

The Environmental Toll of Crypto Mining

While cryptocurrencies hold promise for reshaping the global financial landscape, their environmental impact is a subject of growing concern.

How exactly does the high energy consumption of crypto mining translate into environmental repercussions?

Carbon Footprint of Crypto Mining

The energy needed for crypto mining often comes from power sources that rely on fossil fuels, contributing to carbon emissions.

Indeed, the carbon footprint of Bitcoin mining alone is comparable to some large cities or even entire countries.

This considerable carbon footprint poses a serious challenge for global efforts to reduce greenhouse gas emissions and combat climate change.

For instance, cryptocurrency activity is estimated to emit between 25 to 50 million tons of CO2 each year.

Impact on Local Ecosystems

Crypto mining facilities often use large amounts of water for cooling purposes, potentially straining local water resources.

Also Read:  20 Biggest Hacks in Cryptocurrency History

In areas where water is scarce, this could exacerbate existing water shortages and impact local ecosystems.

Electronic Waste

The high-tech hardware used in crypto mining has a relatively short lifespan, leading to the generation of electronic waste.

When not properly disposed of, this waste can have harmful environmental effects, contaminating soil and water with hazardous materials.

Grid Stress

Crypto mining can cause spikes in electricity demand, potentially leading to power shortages and straining electrical infrastructure.

Crypto Mining vs. Traditional Banking In Electricity Consumption

Traditional banks and other financial institutions also require significant amounts of energy to operate, such as the use of ATMs, operation of systems and their data centers.

Yet, some reports suggest that the global banking system consumes more energy annually than Bitcoin mining.

One of such report was published in 2022 by an IT engineer and researcher, Michel Khazzaka, who submitted that, “Banking uses 56 times more energy than Bitcoin”, saying further, “Bitcoin uses 0.5% of world energy consumption.”

Carbon Emissions in Traditional Banking

Similar to crypto mining, the traditional banking system also contributes to global carbon emissions.

From the energy used in bank branches and ATMs to the emissions involved in producing and transporting physical currency, the environmental impact is considerable.

Electronic Waste in Traditional Banking

Like the crypto industry, traditional banking also generates electronic waste. Obsolete ATMs, outdated bank servers, and even discarded bank cards contribute to this.

Pros and Cons

While it’s clear that both systems have environmental impacts, they also each have their unique advantages.

Cryptocurrencies offer fast, transparent transactions and financial inclusion. Traditional banking, on the other hand, provides established security measures, regulatory protection, and widespread accessibility.

How To Reduce The Environmental Impact of Bitcoin Mining

Various options are already emerging to address the challenges that are associated with crypto mining:

Renewable Energy for Crypto Mining

One solution is powering crypto mining operations with renewable energy. This reduces reliance on fossil fuels and can significantly cut down carbon emissions.

Also Read:  8 Best Crypto Wallets in the U.S

To reduce the environmental effect of crypto mining, we’ve seen CleanSpark Inc. launch their 100% carbon-neutral Norcross, Georgia facility in May 2023.

The facility is powered by nuclear and solar energy in an effort to make mining of Bitcoin sustainable.

Also, some crypto miners are already locating their operations in areas with abundant renewable energy sources like wind or hydroelectric power.

Energy-Efficient Mining Hardware

Advancements in technology have led to the development of more energy-efficient mining hardware.

This equipment can perform the necessary computations for mining while using less energy, reducing the environmental impact.

According to an expert review on coinledger, some of the best energy-efficient mining hardware include:

  • Bitmain AntMiner T19 
  • Dragonmint T1
  • Whatsminer M30S++
  • Bitmain AntMiner S9, and
  • Bitmain AntMiner S19 Pro among others

Adoption of Proof of Stake vs. Proof of Work

Cryptocurrencies can also reduce their environmental impact by changing the way transactions are verified.

Instead of the energy-intensive ‘proof of work’ system used by Bitcoin, some cryptocurrencies use a ‘proof of stake’ system, which is significantly more energy-efficient.

For instance, it is estimated that a PoW network like Bitcoin consumes over 99 per cent more energy than PoS networks like Solana, Tezos, and Polkadot, says in another expert analysis.

Carbon Offset Initiatives

Some entities in the crypto space are investing in carbon offset projects to compensate for the emissions generated by mining activities. While this doesn’t eliminate the emissions from mining, it can help to balance out the environmental impact.

Government Regulations

The government also has a role to play. It can do this by introducing regulations that encourage sustainable practices in the crypto industry, such as energy efficiency standards or incentives for using renewable energy.


From renewable energy and energy-efficient technologies to sustainable blockchain practices and proactive government regulations, there are many ways to reduce the environmental impact of crypto mining.

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