Bitcoin and the Environment: A Comprehensive Case Study on the Ecological Impacts of Cryptocurrency Mining

Bitcoin, the first digital currency and the one that attracts the most attention, has changed the way we think about money by allowing people to conduct secure peer-to-peer transactions absent banks and middlemen. However, for all the decentralization and innovation Bitcoin brings to the world of digital finance, it comes with an environmental cost. Bitcoin relies on a system called Proof-of-Work that has the potential to consume massive computing power and energy to validate transactions. This paper will detail the environmental costs of Bitcoin mining, identifying three main issues: electricity consumption, carbon emissions, and e-waste. Mining machines called ASICs typically consume massive amounts of electricity, on average between 91 and 120 TWh annually, which is comparable to the annual electricity usage of countries, e.g., Argentina. Electric miners generate about 60 million metric tons of CO2 each year; a larger portion of miners utilizes fossil-fuel based energy sources. Another aspect of Bitcoin and its environmental impact is that ASICs have a short useful life, creating tons of e-waste that is hard to recycle. In the hope of understanding these impacts better, the paper will analyze case studies from China, El Salvador, Iceland and Ethereum's transition to a greener method of coin mining.