Recent Study on Bitcoin Mining’s Environmental Impact
Recent research led by experts from Harvard University indicates that the reliance of Bitcoin mining companies in the United States on power from fossil fuel power plants indirectly increases the pollutants emitted by these plants. This not only intensifies the pressure on environmental issues but also exhibits characteristics of cross-regional transmission. But should Bitcoin truly bear full responsibility?
(Background: Tokyo Electric Power Company plans to use surplus electricity for Bitcoin mining: Successful profits will introduce more green energy mining.)
(Supplementary Background: AI is an energy-consuming monster! Sam Altman is optimistic about energy breakthroughs from nuclear fusion.)
Criticism of Bitcoin Mining’s Energy Impact
One long-standing criticism from Bitcoin opponents is the pressure exerted by Bitcoin mining activities on energy resources. The recent study titled “The Environmental Burden of the Bitcoin Mining Boom in the United States” shows that the reliance of Bitcoin mining companies in the United States on fossil fuel power plants has indirectly increased the emissions of pollutants such as carbon dioxide, fine particulate matter (PM2.5), and other harmful pollutants.
The study indicates that during the period from August 2022 to July 2023, approximately 1.9 million Americans were affected by air pollution. Researchers compiled data from 34 of the largest Bitcoin mining sites in the U.S. and concluded that the operation of Bitcoin mining sites in one state indirectly increases the power generation pressure on plants in another state, leading to increased emissions from those plants, thus affecting the environment in multiple states.
For instance, the electricity consumed by a mining site in North Carolina indirectly increases the generation pressure on a coal-fired power plant in Kentucky, which in turn impacts air quality in Illinois, where local residents have no direct recourse against either the mining site or the power plant.
However, I believe that the study’s direct attribution of environmental pollution to Bitcoin is overly simplistic.
Bitcoin’s Energy Neutrality
First, the act of Bitcoin mining itself does not care whether coal or hydropower is used, as long as there is sufficient electricity. Mining sites do not need to operate in urban centers with air conditioning but can relocate to areas with surplus energy. For example, hydropower and geothermal plants in Iceland have become gathering spots for miners due to oversupply, while in Texas, the flaring of natural gas also allows Bitcoin mining sites to capture these gases that would otherwise be emitted, turning waste into treasure.
As early as last January, media outlets like Bloomberg reported that over 54% of the energy consumed by Bitcoin mining comes from renewable sources, including hydropower, wind, and solar energy.
In a 2023 report, the Bitcoin Mining Council (BMC) noted that the adoption rate of sustainable energy in the global Bitcoin mining industry has surpassed that of some traditional sectors, such as banking and gold mining.
Regionally, mining activities in the U.S., Canada, and Iceland have also seen increased use of green energy:
- North America: The U.S. and Canada have high rates of green energy use due to well-developed renewable energy infrastructure. For instance, companies like Hut 8 and Bitfarms utilize substantial hydropower in Quebec.
- Iceland: Nearly 100% of its energy comes from geothermal and hydropower, making it a hotspot for green mining.
Related Reading
International Energy Agency: Virtual currency mining, AI, and data centers could double global electricity consumption by 2026.
Arcane Report: “Bitcoin mining helps solve the energy crisis” – it can balance the renewable grid and utilize waste heat for heating.
Bitcoin’s Actual Carbon Footprint vs. Global Financial System
On the other hand, have you heard people criticize the carbon footprint of Visa, Goldman Sachs, or global banks? The energy consumption and carbon emissions from the global financial system, gold mining, currency printing, armored vehicles, and financial transaction servers far exceed those of Bitcoin, but they are not scrutinized due to difficulties in quantification.
According to a report by Galaxy Digital in 2021, the annual carbon emissions from Bitcoin mining are approximately 60-70 Mt CO2e, while the total carbon emissions from traditional finance and gold mining reach 500-900 Mt CO2e. Overall, Bitcoin is not perfect, but its energy sources are transparent, selectable, and are progressively moving towards green energy.
AI Data Centers as Power Hogs
Additionally, the currently hot AI data centers are also major energy consumers, yet people have not halted the development of AI.
Public data shows that the current electricity consumption of data centers in the U.S. accounts for about 3.5% to 4% of national electricity consumption. Although not all of this is consumed by AI-related computations (including training and inference phases), this portion remains a core part of data center energy use.
With the proliferation of generative AI, the electricity demand for AI data centers is expected to grow rapidly. According to Goldman Sachs research, by 2030, the total electricity consumption of data centers may account for 8% of U.S. electricity, with AI-related usage potentially making up 19% of data center consumption, estimated to be about 1.5% to 2% of the total U.S. electricity consumption.
Of course, we cannot abandon environmental protection for the sake of industrial development. Government agencies should consider how to ensure development while providing comprehensive supporting measures to encourage industries to use green energy and reduce pollution, ultimately achieving carbon reduction or even zero carbon emissions.
Related Reports
Green Bitcoin Mining! Marathon tests “renewable energy” from landfills to mine BTC.
KPMG Certification: Bitcoin pollution is overestimated! Mining may transform and lower carbon emissions, bringing new ESG possibilities.
Bloomberg: Iceland is a holy land for Bitcoin mining! Abundant renewable energy and non-inflationary electricity prices.