Co-authored with Milana Farah

Did you know?

If Bitcoin were a country, its energy use would rank 27th in the world, higher than Pakistan, a nation of more than 230 million people [1].

What is Bitcoin?

Bitcoin is the first and most widely known cryptocurrency, a form of digital money secured by cryptography, which makes it extremely difficult to counterfeit or alter [2]. Unlike traditional currencies issued by governments, Bitcoin isn’t printed. It’s created through a process called mining which requires enormous amounts of electricity, raising environmental concerns.

What Is Bitcoin Mining?

Bitcoin mining is basically solving complex puzzles with a computer that add transactions to the blockchain, as a reward, miners get rewarded with newly minted bitcoins plus transaction fees [3].

Early on, Bitcoin could be mined with a home PC, but in recent years, modern mining operations have evolved into “farms”, full of thousands of ASIC computers running 24/7 in pursuit of bitcoin rewards [4]. One of the biggest players, like Riot Platforms, is building a 265-acre site in Texas with a planned 400 megawatt (MW) capacity [5]. Such a facility hosts tens of thousands of specialized mining machines running nonstop, equivalent to a small power plant’s worth of consumption.

How Much Energy Does Bitcoin Use?

Bitcoin’s energy hunger has grown fast: in 2018 its usage was about 45 TWh (terawatt-hours) [6]; by 2022, revised estimates put it near 95-115+ TWh [3]. That’s roughly a doubling in four years.

As of 2025, global Bitcoin mining has consumed more than 175.87 TWh of electricity, which accounts for roughly 0.5% of worldwide power use. [Digiconomist Bitcoin Energy Consumption Index, 2025]. In another comparison, the energy required for just one Bitcoin transaction is equivalent to the amount of electricity an average Canadian home would use over about 55 days.

Why Is Bitcoin So Energy-Intensive?

A Massive Guessing Game: The mining process is like a huge digital lottery. Miners use computers to make trillions of numerical guesses every second to maximize their chances. This requires the most powerful machines.

Automatic Difficulty Increases: Bitcoin increases the difficulty of these puzzles periodically. When additional miners join the network or when hardware becomes more efficient, the protocol raises the difficulty so that block creation still takes as long to complete.

Heating and Cooling: Mining hardware produces intense heat, which requires large cooling systems to prevent equipment failure. These cooling systems consume significant additional electricity.

Energy as a Security Feature: The network’s security relies on this enormous energy input. The high energy cost acts as a protective barrier.

Bitcoin intentionally links security to energy usage as a defense mechanism, but this approach results in exceptionally high levels of power consumption. As in today’s world, this relentless race now out-powers dozens of countries combined.

The Carbon Footprint Behind the Crypto Boom

The environmental impact of Bitcoin mining has become a major concern. Because many mining operations rely on fossil-fuel electricity, especially coal and natural gas, they generate enormous greenhouse-gas emissions. Recent research estimates that Bitcoin mining produced over 85 million tonnes of CO2 in 2020-2021 which accounts for nearly 1% of global greenhouse-gas emissions (including both crypto mining and data centers) [1,8].

Mining doesn’t just affect the climate, it also strains local electricity systems. Large mining farms consume enormous amounts of electricity, which can raise energy prices and strain infrastructure.

All of these impacts have raised an important question:

Is a Cleaner Crypto Future Possible?

One option is to move mining from coal-reliant regions to places powered by hydro, wind, or geothermal energy, though this shift remains limited [9].

A bigger change involves reconsidering how these networks operate. Bitcoin uses Proof-of-Work (PoW), which works like a giant race: thousands of computers compete to solve puzzles, and even though only one succeeds, all of them run at full power, consuming extensive amounts of electricity [10]. Because of all of that, many newer cryptocurrencies are turning to Proof-of-Stake (PoS) instead.

In PoS, people stake coins, temporarily locking them up, and the system randomly selects from these stakers to validate transactions and reward them. Since PoS doesn’t rely on thousands of machines racing, it uses only a tiny fraction of the energy required by PoW. The impact is huge: Ethereum switched to PoS in 2022 and cut its electricity use by 99.9% [11].

Finally, more than 250 companies have signed the Crypto Climate Accord, committing to net-zero emissions by 2030 [12].

References:

[1] “UN Study Reveals the Hidden Environmental Impacts of Bitcoin: Carbon is Not the Only Harmful By-product,” United Nations University, Feb. 20, 2025. https://unu.edu/press-release/un-study-reveals-hidden-environmental-impacts-bitcoin-carbon-not-only-harmful-product

[2] The Investopedia Team, “Cryptocurrency Explained with Pros and Cons for Investment,” Investopedia, Jun. 15, 2024. https://www.investopedia.com/terms/c/cryptocurrency.asp

[3] Neumueller, A. Bitcoin electricity consumption: An improved assessment. Cambridge Centre for Alternative Finance. 2023

https://www.jbs.cam.ac.uk/2023/bitcoin-electricity-consumption

[4] Columbia Climate School. Cryptocurrency energy consumption and climate impacts. 2022, May 4

https://news.climate.columbia.edu/2022/05/04/cryptocurrency-energy

[5] The Texas Observer. The crypto racket: How energy-hungry cryptocurrency mining threatens the environment.

https://www.texasobserver.org/the-crypto-racket

[6] International Energy Agency. Bitcoin energy use and the mined gap. https://www.iea.org/commentaries/bitcoin-energy-use-mined-the-gap

[7] CBS News. Bitcoin mining energy consumption explained. https://www.cbsnews.com/news/bitcoin-mining-energy-consumption

[8] “Carbon Emissions from AI and Crypto Are Surging and Tax Policy Can Help,” IMF, Aug. 15, 2024. https://www.imf.org/en/blogs/articles/2024/08/15/carbon-emissions-from-ai-and-crypto-are-surging-and-tax-policy-can-help

[9] “What are green cryptocurrencies and why are they important?,” Iberdrola. https://www.iberdrola.com/sustainability/green-cryptocurrencies

[10] N. Onat and M. Kucukvar, “The large environmental consequences of bitcoin mining,” LSE Business Review, Nov. 08, 2024. https://blogs.lse.ac.uk/businessreview/2024/11/08/the-large-environmental-consequences-of-bitcoin-mining/

[11] Ted, “The environmental impact of cryptocurrency,” Swyftx - Cheap, Easy, Secure, Jun. 05, 2022. https://swyftx.com/blog/environmental-impact-of-cryptocurrency/ (accessed Nov. 20, 2025).

[12] “Crypto Sector - RMI,” RMI, Oct. 28, 2025. https://rmi.org/our-work/climate-intelligence/supply-chain-emissions-initiative/crypto-sector/ (accessed Nov. 20, 2025).