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Bitcoin mining consumes huge amounts of energy, giving the asset a bad reputation as a threat to the environment and an accelerator of climate change.
A new UN report finds that cryptocurrency mining has extremely high costs in the form of astronomical amounts of water and land.
Global water footprint From January 2020 to December 2021, it amounted to 1.65 cubic kilometers, “equivalent to filling more than 660,000 Olympic-sized swimming pools, and more than the current domestic water use of 300 million people in rural areas of sub-Saharan Africa.”
The mining floor area in the same period amounted to “more than 1,870 square kilometers, 1.4 times the area of Los Angeles.”
The global carbon footprint from 2020 to 2021 was “equivalent to carbon emissions resulting from burning 84 billion pounds of coal, 190 natural gas-fired power plants, or more than 25 million tons of waste in landfills.”
China and the United States are the world’s biggest offenders, using at least 50 percent more resources in their mining operations than any other country.
A new UN report finds that cryptocurrency mining has extremely high costs in the form of astronomical amounts of water and land. Pictured are cryptocurrency mining rigs in Canada
China and the United States lead the world in electricity consumption, carbon emissions, water and land use from Bitcoin mining.
Much of this cost is due to how the electricity is produced. During this period from 2020 to 2021, hydropower supported 16 percent of the world’s Bitcoin mining.
Although hydropower is considered a renewable resource, it requires submerging large areas of land to build reservoirs for hydroelectric dams.
Apart from these land requirements, hydropower production also loses a lot of water through evaporation.
It has previously been reported that the carbon footprint of Bitcoin mining rivals beef production and precious metal mining.
The new report shows that “the environmental footprint of Bitcoin mining is not limited to greenhouse gas emissions.”
Bitcoin mining has a reputation as a carbon polluter, but it also has huge hidden costs that arise from its energy sources.
Cryptocurrency “mining” describes how computers around the world solve complex mathematical problems to complete and verify transactions.
The enterprise can be profitable because cryptocurrency mining rewards the miner for verifying transactions and bringing more bitcoins into existence.
However, making money from Bitcoin mining depends on the abundance of cheap energy.
For an enterprise to be profitable, the cost of running mining computers must be less than the mining rewards.
Bitcoin mining powered by natural gas rose from 15 percent in 2021 to 21 percent in 2022.
According to the report: “This increase is primarily due to the heavy reliance of electricity generation in some major BTC mining countries on natural gas.”
During the study period from 2020 to 2021, China and the United States topped the list of countries that use the greatest amount of resources and cause the greatest amount of environmental degradation by a large margin.
Kazakhstan ranks high on the list because its fossil fuel-based electrical system operates at a lower cost than other countries.
The study authors write that there may be benefits to the increasingly digital nature of the global economy. “But with demand for exchanging and investing in cryptocurrencies growing faster than ever, the world must pay careful attention to the hidden and neglected environmental impacts of this growing sector.”
The report warns that these hidden environmental costs are particularly worrying, given that many of the countries at the top of the list lag behind in social and economic equity. “Unregulated and untaxed mining activities exacerbate inequality in these regions and have lasting environmental impacts.”
Despite the data collected for the study, the report’s authors stressed that the anonymous nature of Bitcoin makes it difficult to accurately track where Bitcoin is being mined and who is mining it.
To help make the matter less risky, they recommend that national governments cooperate to create more transparency in cryptocurrency policies.
They also recommend economic and regulatory tools such as taxes and higher energy prices to curb the uncontrolled growth of cryptocurrency mining and force miners to bear some of the cost.
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