Each nation exhibits a unique environmental impact from Bitcoin mining, largely influenced by its energy sources. A recent study led by the United Nations indicates that China and the United States possess the largest Bitcoin mining footprints.
The increasing market share of Bitcoin and other cryptocurrencies has attracted criticism for their substantial environmental impact. The process of mining cryptocurrencies requires a significant amount of energy, contributing to a large carbon footprint. Additionally, a recent study, the first of its kind to assess the environmental effects of Bitcoin mining on a country-by-country basis, reveals that this activity also has considerable water and land footprints. This study forms the foundation of a new report by the United Nations (UN), focusing on the environmental consequences of Bitcoin mining.
The study reveals how each country’s mix of energy sources defines the environmental footprint of its bitcoin mining and highlights the top 10 countries for energy, carbon, water, and land use. The work was published in Earth’s Future, which publishes interdisciplinary research on the past, present, and future of our planet and its inhabitants.
“A lot of our exciting new technologies have hidden costs we don’t realize at the onset,” said Kaveh Madani, a Director at United Nations University who led the new study. “We introduce something, it gets adopted, and only then do we realize that there are consequences.”
Madani and his co-authors used energy, carbon, water, and land use data from 2020 to 2021 to calculate country-specific environmental impacts for 76 countries known to mine bitcoin. They focused on bitcoin because it’s older, popular, and more well-established/widely used than other cryptocurrencies.
Madani said the results 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.
Electricity and carbon
If bitcoin mining were a country, it would be ranked 27th in energy use globally. Overall, bitcoin mining consumed about 173 terawatt hours of electricity in the two years from January 2020 to December 2021, about 60% more than the energy used for bitcoin mining in 2018-2019, the study found. Bitcoin mining emitted about 86 megatons of carbon, largely because of the dominance of fossil fuel-based energy in bitcoin-mining countries.
The environmental impact of bitcoin mining fluctuates along with energy supply and demand in a country. When energy is inexpensive, the profitability of mining Bitcoin goes up. But when energy is expensive, the value of Bitcoin must be high enough to make the cost of mining worth it to the miner, whether it’s an individual, a company or a government.
China, the U.S. and Kazakhstan had the largest energy and carbon footprints in 2020-2021.
Globally, bitcoin mining used 1.65 million liters (about 426,000 gallons) of water in 2020-2021, enough to fill more than 660,000 Olympic-sized swimming pools. China, the U.S., and Canada had the largest water footprints. Kazakhstan and Iran, which along with the U.S. and China have suffered from water shortages, were also in the top-10 list for water footprint.
“These are very, very worrying numbers,” Madani said. “Even hydropower, which some countries consider a clean source of renewable energy, has a huge footprint.”
The study analyzed land use by considering the area of land affected to produce energy for mining. The land footprint of server farms is negligible, Kaveh said. The global land use footprint of bitcoin mining is 1,870 square kilometers (722 square miles), with China’s footprint alone taking up 913 square kilometers (353 square miles). The U.S.’ land footprint is 303 square kilometers (117 square miles), and likely growing while China’s is shrinking.
Most impacted countries
China and the United States, which have two of the largest economies and populations in the world, take the top two spots across all environmental factors. A mix of other countries make up the other 8 spots in the top 10. Kazakhstan, Malaysia, Iran and Thailand — countries to which servers are outsourced and, in some cases, where cryptocurrency mining is subsidized by the government — appear as well. Canada, Germany, and Russia have some of the largest footprints across all categories. Each country engaged in large-scale bitcoin mining affects countries around the world by their carbon emissions, Kaveh noted.
But the benefits of bitcoin mining may not accrue to the country, or the individuals, doing the work. Cryptocurrency mining is an extractive and, by design, difficult-to-trace process, so the geographic distribution of environmental impacts cannot be assumed to be a map of the biggest digital asset owners.
“It’s hard to know exactly who is benefiting from this,” Madani said. “The issue now is who is suffering from this.”
Already, some countries have potentially seen their resources impacted by cryptocurrency mining. In 2021, Iran faced blackouts. The government blamed bitcoin mining for excessively draining hydropower during a drought and periodically banned the practice.
China in June 2021 banned bitcoin mining and transactions in the country; other countries, such as the U.S. and Kazakhstan, have taken up the slack and had their shares in bitcoin increase by 34% and 10%, respectively.
Madani said the study is not meant to indict bitcoin or other cryptocurrency mining. “We’re getting used to these technologies, and they have hidden costs we don’t realize,” he said. “We want to inform people and industries about what these costs might be before it’s too late.”
Reference: “The Environmental Footprint of Bitcoin Mining Across the Globe: Call for Urgent Action” by Sanaz Chamanara, S. Arman Ghaffarizadeh and Kaveh Madani, 24 October 2023, Earth’s Future.