The Environmental Impact of Cryptocurrency Mining

The Environmental Impact of Cryptocurrency Mining

Cryptocurrency mining consumes enormous amounts of energy and requires expensive machinery, which can place significant burdens on electricity grids, utilities, communities, and ratepayers.

Climate damage from mining also comes in the form of greenhouse gas emissions and water pollution, while its equipment creates e-waste that strains local waste disposal systems. Furthermore, mining operations may drive increased fossil fuel use – something at odds with Paris Agreement’s goal to limit global warming.

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Cryptocurrency mining involves running a computer continuously for extended periods, using up significant CPU power. Miners solve complex math equations which provide them with bitcoin rewards.

Bitcoin mining is vital to the cryptocurrency system because it validates transactions on a blockchain, which serves as a distributed ledger. This process prevents double spending among peers on peer-to-peer networks. Miners also contribute new blocks that form part of an unbroken chain.

Each block requires a proof of work (PoW) solution which must be verified by the bitcoin community. Mining operations require vast amounts of energy for this process and must ensure their hardware stays cool to avoid overheating and burning out CPUs.

Electricity costs can have a profound impact on profitability for home miners. High costs make it hard for them to remain profitable while the high degree of price volatility makes it hard to know whether their rewards outweigh equipment and electricity expenses.


Bitcoin mining consumes vast quantities of water, most notably for cooling purposes. Additionally, the water footprint associated with cryptomining includes consumption from hydroelectric power plants and coal-powered energy stations that generate electricity for cryptomining; furthermore onsite cooling water may evaporate or enter local ecosystems where it could pose environmental or human health concerns.

At present, US bitcoin miners consume between 8.6-35.1 gigalitres (GW) of water annually – more than 300,000 households! Miners from the United States, China and Kazakhstan consume the most water when mining cryptocurrency; which comes as no surprise given that each of these countries experience high rates of water scarcity.

Given mounting concerns over energy-water nexus issues, governments should require crypto miners to disclose their water usage. Such transparency would allow policymakers to assess fully impact of bitcoin mining operations as well as opportunities to increase sustainability – for instance Meta is already doing this and acts as a model that other bitcoin miners could follow.


Cryptocurrency mining is an intricate process involving verifying and adding transactions to a blockchain ledger. Miners use powerful computers to solve intricate mathematical algorithms in exchange for new coins – yet this industry’s increasing energy needs is having serious environmental effects.

As the cryptocurrency sector expands, so too does its environmental footprint. If cryptocurrency doesn’t make the switch to renewable energy sources soon enough, this could thwart decades of progress toward climate goals as well as put energy systems, communities and ratepayers at risk.

The federal government should take steps to regulate digital asset mining and invest in eco-friendly alternatives, including powering new cryptocurrency mining facilities with clean and affordable energy sources and mitigating local noise, water and waste impacts as well as environmental injustice for overburdened communities.


Cryptocurrency mining utilizes powerful computers to solve complex equations to verify transactions on the blockchain, creating massive amounts of electricity usage as well as carbon emissions that surpass even some conventional digital transactions.

Energy intensity varies significantly by country for cryptocurrency mining. Miners seek out inexpensive energy sources, often including fossil fuels that contribute to climate change. Digiconomist estimates that Bitcoin network mining contributes approximately equal emissions as Oman.

Policymakers must not only consider efficiency improvements when looking at cryptocurrency mining regulations; they must also look at developing more energy-efficient alternative cryptocurrencies and using eco-friendly validation protocols for blockchain validation protocols to mitigate any negative environmental impacts of cryptocurrency mining and support efforts to meet climate objectives in the United States. This policy brief takes an in-depth approach that examines this need using statute, comparisons and case approaches.