The allure of Bitcoin, the world’s premier cryptocurrency, faces a significant challenge as its environmental impact comes under scrutiny. A recent study reveals alarming statistics about the cryptocurrency’s water consumption, sparking concerns about its sustainability.
In 2021, Bitcoin mining, a crucial process in generating new Bitcoins, devoured over 1,600 gigalitres of water globally. Astonishingly, each Bitcoin transaction guzzled an average of 16,000 liters of water, equivalent to filling a garden swimming pool.
The sheer magnitude of Bitcoin mining’s water usage raises alarms about its potential impact on drinking water, especially in regions grappling with water scarcity. The study, published in Cell Reports Sustainability, warns of the consequences if Bitcoin continues unchecked, particularly in water-stressed countries like the United States.
Mining Bitcoin involves solving complex mathematical equations using substantial computing power. Water is a critical component, cooling large data center computers and reducing the temperature of power plants fueling Bitcoin mining. Alex de Vries, the study’s author, likens the water used in a Bitcoin transaction to “one backyard swimming pool going up in the air.”
While the environmental toll of Bitcoin’s energy consumption has been extensively documented, water usage has received less attention. As Bitcoin’s value surges, currently surpassing $38,000, de Vries anticipates a corresponding increase in water consumption, projecting a 40% rise to 2,300 gigalitres in 2023.
The report highlights potential challenges for countries like Kazakhstan, a Bitcoin mining hub in Central Asia, where dry climates strain freshwater supplies. In the United States, Bitcoin mining is estimated to consume as much water as 300,000 households or an entire city like Washington, DC.
De Vries dismisses the notion that transitioning to renewable energy alone would solve the problem, asserting that renewable resources are limited. He suggests a transformative solution lies in revising Bitcoin’s technology to be more environmentally friendly, emphasizing a shift from the energy-intensive Proof of Work model to Proof of Stake.
Ethereum adopted the Proof of Stake system in 2022, eliminating the need for energy-consuming hardware. Instead, participants secure coins as collateral, with winners selected randomly through software, regardless of machine power. De Vries contends that Bitcoin’s reluctance to embrace such innovations stems from miners’ traditional mindset and reluctance to disrupt the status quo, jeopardizing their investments.
The study underscores the urgency of reevaluating Bitcoin’s environmental impact and advocates for a paradigm shift towards sustainable alternatives, such as the Proof of Stake model.
Addressing these concerns as the cryptocurrency landscape evolves becomes imperative for Bitcoin’s long-term viability.