UN warns Bitcoin is threatening the environment

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A recent study conducted by the United Nations has raised concerns about the impact Bitcoin (BTC) may have on the overall environment.

The sudden rise of the cryptocurrency market has been compared to a gold rush. However, this dynamic market also has a dark side. Study the United Nations Emphasize that cryptocurrency (Bitcoin) mining has significant environmental impacts: climate, water, and land.

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Analyzing Bitcoin’s Energy Consumption

The study examined activity in 76 Bitcoin mining countries between 2020 and 2021. During this time frame, the global Bitcoin mining network consumed 173.42 terawatts of electricity, ranking 27th in the world if measured as a country. This number even “exceeds” a populous country like Pakistan.

Such huge energy consumption releases an equally huge amount of carbon into the market, which is equivalent to burning 84 billion pounds of coal or operating 190 natural gas power plants.

To offset the CO2 emissions from Bitcoin mining in 2021-2022, we would need 3.9 billion trees, an area equivalent to the Netherlands, Switzerland or Denmark, and 7% of the tropical Amazon forest area.

In addition, the study also highlighted that Bitcoin mining relies heavily on fossil energy, with coal accounting for 45% and natural gas accounting for 21%. Renewable energy sources such as hydropower meet 16% of electricity demand despite their impact on water resources. Nuclear power accounts for 9%, solar power and wind power account for 2% and 5% respectively.

As for hydropower, Bitcoin mining is equivalent to the amount of water needed to fill more than 660,000 Olympic-sized swimming pools, which is enough to meet the current domestic water needs of more than 300 million people in rural sub-Saharan Africa. Furthermore, the land area covered by global Bitcoin mining operations during this period was 1.4 times that of Los Angeles.

Notably, the study also showed that Bitcoin price is highly correlated with the energy usage of Bitcoin mining. Specifically, the 400% increase in Bitcoin price from 2021 to 2022 will lead to a 140% increase in energy consumption of the global Bitcoin mining network.

Need a legal framework

Notably, the researchers noted that these findings hinder the use of digital assets.

“Technological innovations often have unintended consequences, and Bitcoin is no exception. Our findings impede the adoption of digital currencies. Instead, they should encourage us to invest in regulatory intervention and technological advancements that allow the use of digital currencies without harming the environment. Improving the efficiency of the global financial system.”

Professor Kaveh Madani, leader of the research team

Interestingly, China emerged as the largest Bitcoin mining country, followed by the United States, Kazakhstan, Russia, Malaysia, Canada, Germany, Iran, Ireland, and Singapore.

Based on these findings, UN scientists have made a series of recommendations to governments to monitor and mitigate the environmental impact of cryptocurrencies. They also advocate investing in digital currencies that are more energy-efficient and have less negative impact on the environment.

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