Just one Bitcoin transaction consumes the same amount of water used to fill a swimming pool
Bitcoin could make a change to make the cryptocurrency more environmentally friendly
According to a recent study examining the environmental impact of Bitcoin, a single transaction of the popular cryptocurrency could require as much water as filling a standard garden swimming pool. The study, published in the journal Cell Reports Sustainability, reveals that Bitcoin mining globally consumed over 1,600 gigalitres of water in 2021 alone, with each transaction using an average of 16,000 litres of water.
This substantial water usage poses concerns for regions already grappling with water scarcity, particularly if Bitcoin mining continues unabated without regulation. The process of mining Bitcoin demands significant computational power to solve complex mathematical equations, with successful solutions rewarded with a portion of Bitcoin’s value. Water plays a crucial role in cooling the computers at large data centers and in lowering the temperatures of coal- and gas-fired power plants that power these mining operations.
Alex de Vries, the study’s author and a Ph.D. student at Vrije Universiteit Amsterdam, likened the water consumption of a single Bitcoin transaction to the evaporation of a backyard swimming pool. While the energy consumption of Bitcoin mining has received considerable attention, the water usage associated with each transaction has been less explored but is expected to rise.
With Bitcoin’s price soaring to over $38,000 and continuing to climb, de Vries predicts a corresponding increase in water consumption to around 2,300 gigalitres, representing a more than 40% surge compared to 2021. This escalating demand for water could particularly strain regions like Central Asia, including Kazakhstan, a significant Bitcoin mining hub, where water supplies are already under pressure due to arid climates.
The study also highlights the substantial water usage associated with Bitcoin mining in the United States, estimating that it consumes as much water as 300,000 households or a city like Washington, DC. These findings underscore the urgent need for addressing the environmental consequences of Bitcoin mining, including its significant water footprint, to ensure sustainable resource management and mitigate potential impacts on water-stressed regions.
The real solution and the losing game
De Vries contends that transitioning to renewable energy wouldn’t effectively mitigate Bitcoin’s carbon footprint. “Do you really want to allocate wind and solar power to crypto?” he questions. He highlights that in many countries, renewable energy sources are limited, and redirecting them to crypto would mean sacrificing other sectors that rely on fossil fuels.
Looking ahead to 2040, de Vries predicts the end of Bitcoin mining, when the last Bitcoin will be mined, leaving miners without income. However, he suggests that if Bitcoin were to adopt more eco-friendly technology, its environmental impact could be swiftly reversed.
Bitcoin currently operates on the Proof of Work model, a competitive computational puzzle-solving process that consumes vast amounts of energy. In contrast, the Proof of Stake system, utilized by Ethereum since 2022, requires no energy-intensive hardware. Instead, participants stake coins as collateral, with winners selected randomly by the software, irrespective of computing power. Despite Ethereum’s successful transition, de Vries notes resistance from Bitcoin miners to embrace such changes, fearing disruption to their investments.
He emphasizes the paradox: while Bitcoin’s value derives partly from its stability, resisting change poses long-term risks. As the supply of newly mined coins diminishes, miners face diminishing returns, ultimately leading to an unsustainable situation beyond 2040. Thus, in de Vries’ view, Bitcoin miners are engaged in a futile endeavor by avoiding necessary adaptations.