How Does Bitcoin Mining Contribute to Climate Change and Pollution?

Ever since the rise of Bitcoin as a digital currency, its impact on the environment has been a bone of contention among many. As of now, cryptocurrencies are responsible for a substantial amount of carbon emissions, degrading efforts to align climate change with the goals of The Paris Agreement.

So how bad is crypto mining affecting the environment?

Melting iceberg and global warming

How does Bitcoin Mining Work?

Mining is a proof of work method used by Bitcoin and Ethereum to validate transactions and introduce new coins to the blockchain. This process is necessary to avoid the problem of double-spending, where someone sends, let’s say, a copy of 0.5 Bitcoin and remains with the same amount of Bitcoin as if the transaction never happened.

There is no double-spending in traditional currency (fiat). For example, if you went to the shop and bought a loaf of bread for $4, you would give the cashier the $4, and it’s gone, you can’t remain with the same $4 and use it elsewhere.

Mining works by giving miners the task of validating a series of transactions arranged in blocks by checking that the transactions were indeed initiated and the senders have the required amount of BTC required for the transaction.

For their validation to be accepted, miners have to compete in solving a complex mathematical problem. This process is computationally intensive and the first miner to find the solution is awarded in newly minted bitcoins and transaction fees paid by the sender.

Bitcoin Mining Farm

The catch is, about every four years or every 210,000 blocks added to the blockchain, the amount of Bitcoin paid as a reward to miners is halved. In addition, the more lucrative Bitcoin becomes, the more miners there are, making the complex mathematical problem more difficult.

Another reason for the increase in difficulty is the Bitcoin network which adjusts the difficulty of solving the mathematical problem about every 2 weeks or 2,016 blocks, to keep the amount of time it takes to mine a block around the 10-minute mark.

As of today, the number of miners is in the millions, and more keep joining as they look to cash in on the Bitcoin reward and the increase in the price of Bitcoin.

Since many cannot afford the computing power to mine a block, mining pools have become popular.

They allow miners to come together and pool their computing power and share the Bitcoin reward.

To learn more about Bitcoin, check out this post.

Environmental Impacts of Mining Bitcoin

As we mentioned before, mining involves solving computationally intensive math problems. These take a lot of computing power and in turn, lots of electricity. According to an estimate by the University of Cambridge, Bitcoin mining consumes about 120 Terawatt Hours (TWh) annually, more than countries like Argentina, Sweden, and Malaysia.

Before China banned Cryptocurrencies in June of 2021, the country was responsible for about 60% of the world’s Bitcoin mining due to the cheap power produced by coal and hydropower. Considering that a major source of China’s electricity is from highly polluting coal, miners there must have contributed to the emission of thousands of tons of CO2.

Now that mining is moving out of China, countries like the USA, Russia, Siberia, Iran, and Kazakhstan have become hotspots for new mining operations. This is a worrying trend as most of these countries rely on coal to generate electricity.

In the USA, miners looking for cheap electricity have descended on coal power plants that were on the brink of collapse and towns relying on hydroelectric dams.

Others like Greenidge Generation Holdings have turned to natural gas plants. Setup in 2017, on the shores of Seneca Lake in Dresden, New York, Greenidge announced plans in March 2021 to double its capacity on Seneca Lake to 41 MW and again more than double it to 85 MW by the end of 2022.

While the company announced it was purchasing voluntary carbon offsets to turn their mining operation carbon neutral, in 2020, the company was responsible for 220,000 metric tons of CO2, the same amount emitted by 50,000 cars.

With a goal of reaching 500MW mining capacity in 2025 by expanding their operations all over the US, you can expect Greenidge to be responsible for millions of tons of CO2 emissions in a couple of years.

Even with their carbon neutral pledges, the CO2 emissions would not have been emitted were it not for their mining operations.

Damage to the Local Ecosystem

Local ecosystem

Pollution by crypto mining plants is not limited to CO2 emissions. In some cases, even the local ecosystem suffers. In the case of the Greenidge Generation plant, the ecosystem on Lake Seneca has been affected.

Power plants generating lots of power usually require lots of water to cool their machines. In Dresden, Greenidge sucks up to 139 million gallons of water a day from Lake Seneca and, in the process taking fish eggs, larva, and fish with it.

The same water is then discharged back into the lake several times hotter. The result is sludge, algae, insects, dead fish, and foul smells in some parts of the lake.

The Locals Also Suffer

In their quest to find cheap electricity for their mining operations, miners entering the United States settled on Plattsburgh, New York, which relies on hydroelectric dams on the St. Lawrence River for their cheap electricity.

However, once Plattsburgh exhausts its assigned portion of power, the city has to purchase more at a higher rate. So following the setting up of mining operations, residents experienced an increase of up to $300 in the winter of 2018. The city ended up introducing an 18-month moratorium on new crypto mining operations.

When crypto miners set up camp, it’s usually bad news for small businesses and residents. Research from Berkeley Haas estimated that the power demands of crypto mining in upstate New York push up annual electric bills by about $165 million for small businesses and $79 million for individuals, with little to no economic benefit to the locals.


During Bitcoin’s early life back in 2009, you could mine your bitcoins with even the slowest of computers. A regular home laptop would have been more than enough. However, as Bitcoin became popular and miners increased, the requirements to mine Bitcoin and at least get a return on investment increased.

The gradual increase in mining difficulty has resulted in miners purchasing lots of hardware and dumping them every other year in exchange for new and more efficient mining hardware.

Electronic Waste

This has led to lots of e-waste build-up. At the onset, miners relied on GPUs, also used in gaming desktops and PCs. The advantage of this was once the miners were done using their GPUs, they could sell some to gamers on the secondary market.

However, the problem was exacerbated when manufacturers realized machines solely designed for mining were more efficient. This resulted in custom mining GPUs and special machines, known as ASICS coming to the market.

So when such hardware became obsolete, they could no longer be repurposed due to the change in design.

As of May 2021, Bitcoin’s annual e-waste generation was estimated to be 30.7 metric kilotons. E-waste poses several environmental challenges including the leaching of toxic metals and chemicals into soil and water and air pollution from poor recycling practices.

The Solution?

Switch to Clean Energy

According to a study by Cambridge University, about 39% of total energy consumption from crypto mining is from renewable sources. However, a major proportion of this is from hydroelectric plants, which pose environmental issues through the disruption of ecosystems and biodiversity.

Investment in alternatives such as solar, wind, and nuclear will be welcome as these emit little to no greenhouse gasses.

Proof of Stake

Ethereum, a Bitcoin rival and one of the major cryptocurrencies, is looking to make mining in its ecosystem obsolete. Its developers are turning to proof of stake and aim to reduce their carbon footprint by about 99%.

Proof of stake is not computationally intensive. Instead of miners competing to be the ones to validate a block, the protocol relies on validators who are required to stake their ethereum. The protocol will operate like the lottery, giving high stakers more chances to validate transactions.

The theory is if someone has staked a lot of ether as collateral, wrongly validating transitions will mean losing all or some of their staked ether and being banned from the network, so validators stand to lose a lot if they try to be dishonest.

Ethereum is not the first to implement this system, as blockchains like Solana, Cardano, Tezos, and Algorand rely on this protocol.

However, concerns have risen as some are questioning whether proof of stake will provide the same security and decentralization features as proof of work.

The advantage of blockchains is that they are adaptable and can be modified to be more efficient. That’s why there are more ways of validating transactions such as proof of history and proof of reputation. As for Bitcoin, it remains to be seen whether the developers will update it to a more efficient and environmentally friendly validation methodology.

What Does the Future Hold for Bitcoin’s Energy Use?

In terms of the impact on the environment, the future is not that bleak. With Ethereum planning to close up shop with the proof of work mechanism, it’s likely many miners will sell their equipment and/or use their mining profits to stake.

They could also switch to Bitcoin mining, but this would increase the difficulty. Also, with Bitcoin rewards halving roughly every 4 years, it may not be that lucrative. The halving also means the number of new miners is unlikely to increase.

The downside however is miners wanting to remain profitable despite the decrease in mining rewards may double their efforts in looking for cheap electricity, and more often than not this would be setting up shop in coal and natural gas power plants, both of which pose a threat to the environment. Also, the chase for more efficient mining equipment will mean more e-waste.

Written by Edmond K.