Bitcoin, the world’s first and most popular cryptocurrency, pioneered the virtual asset economy while revolutionizing financial technology. Despite its blazing trail, the environmental impact of Bitcoin has raised concerns and attracted much scrutiny.
Notably, these concerns heighten as the crypto’s network increases and consumes more energy. A lot of reports and studies have been done to highlight why Bitcoin can pose environmental concerns.
This piece centres on the impact of Bitcoin’s underlying technology, mining processes and carbon footprint on the environment. So let’s dive in.
Mining Process: #1 of the Bitcoin Environmental Concerns
Bitcoin operates on a Proof-of-Work (PoW) consensus algorithm where miners validate transactions in a competitive manner. Accordingly, this requires intense computational power and is energy intensive.
According to Forbes 2023, each transaction consumes approximately the same electricity as an average household’s monthly energy use. Meanwhile, energy consumption keeps increasing as Bitcoin’s network expands.
Meanwhile, mining alone consumes more electricity than entire countries in 1 year as stated in the publication. For context, this intense energy powers several high-computing GPUs used to mine.
Then as Bitcoin’s value appreciates over time, more people are attracted to mining incentives causing more energy consumption. Eventually, this causes significant strain on the environment and energy resources.
Carbon Emissions and Climate Change
Much of the energy used for mining Bitcoin comes from burning fossil fuels which pollute the environment and emit greenhouse gases. Greenhouse gases (including carbon compounds like carbon dioxide) are dangerous to the environment and have significant effects on regional climates.
As mining processes continue to increase, Bitcoin’s contribution to carbon emissions increases leaving a larger carbon footprint. This leads to the pronounced effects of climate change, floods, melting of the polar ice caps, etc.
While some mining processes are converting to renewable sources of energy like solar, wind or hydropower, they have already taken their toll on the environment. Also, this means that energy for other purposes including household use is diverted for Bitcoin mining.
Electronic Waste From Obsolete Mining Equipment
Bitcoin generates an additional environmental concern in the form of electronic waste. Notably, mining equipment does not have an infinite operating lifespan and some breakdown after prolonged use.
In addition, some initial mining equipment has become obsolete due to emerging technology. These machines may have poor use cases outside mining and are hardly repurposed, thus creating significant amounts of electronic waste.
Moreover, much of this waste is non-biodegradable and constitutes environmental hazards to agricultural lands, wildlife, marine lifeforms, etc. Except in a few instances, these equipment are usually not recycled and just become a nuisance to the environment.
In Conclusion
Without question, Bitcoin has changed the financial scene and shown how powerful decentralised digital assets can be. Its environmental impact, however, cannot be disregarded.
Bitcoin has special environmental problems that worsen as its network expands, from the energy-intensive mining process and high carbon emissions to the buildup of technological garbage.