Why mining has a great environmental impact

Bitcoin and Ethereum are two of the best known cryptocurrencies, and since their inception they are generating extremely high financial valuations, which has increased interest in their ‘mining’. The bad part of this is that cryptocurrency mining uses large amounts of electricity, to the point that it has already caused blackouts in some large cities due to consumption; Electricity production is generally an environmentally damaging endeavor, and mining is increasingly contributing to this, but to what extent is it harmful to the environment?

Despite the fact that in cryptocurrency mining the maximum efficiency is always sought (this is the best possible performance with the minimum consumption), it is undeniable that the electricity consumption of mining farms has triggered the production of electricity, especially in areas of Asia where these farms are already very common. However, even with the home PCs of users who simply want to try mining cryptocurrencies, it is helping to increase consumption and therefore increase the need to produce more and more energy.

Why mining has a great environmental impact

Although mining is a standard operating process for most cryptocurrencies, the exact method varies. For Bitcoin, mining is based on a proof-of-work algorithm, and to receive payment from Bitcoin (BTC) for mining a block, you must be the first user to generate such a proof-of-work. This is a computational task to find the target hash set in the block, and while this has the desired effect of incentivizing mining, it is also detrimental to the environment.

In effect, miners are asked to spend resources guessing a code in exchange for Bitcoin (although this is applicable to all cryptocurrencies). As only the first user to generate the proof of work is rewarded with the coin, it is a competitive race dominated by those users with the highest powered equipment , which has a double environmental effect. Otherwise, the hardware used for mining could have been used in consumer equipment, forcing an increase in the production of electronic equipment.

Graphics cards have been particularly affected by this increase in demand. Since 2017, when Bitcoin first became a household name, prices have risen alarmingly, making the components unaffordable for most people. Perhaps a PC user could have upgraded the GPU in their system, but they were so expensive and rare that they couldn’t, so perhaps they replaced the entire PC instead.

The second environmental impact of Bitcoin mining is the use of electricity. Although the entire network requires electricity, mining is the most energy-consuming part of the process; calculations alone would already have a good impact, but when combined with the ‘winner takes all’ approach, teams are left working at their best for long periods of time, causing power consumption to skyrocket .

The impact of Bitcoin on the environment

To become the first to achieve the proof of work for each block, it is necessary to have a powerful team working to the maximum of its possibilities, something that generates a lot of heat. This is already a problem in itself, as overheated machines generally fail faster, but at the same time heat up the surrounding space. Unless you actively manage the ambient temperature, the components will not achieve optimal performance, further reducing the chances of successfully mining a Bitcoin.

To create an ideal environment, you would need an ambient cooling system, which would require renting or purchasing specially designed computing space or a server room. However, you will need to make sure you generate enough income to offset these rental, hardware, and electricity costs. As Bitcoin mining has become more difficult over time, this has benefited those with significant financial backing – that is, those who can make a large initial investment.

In the end, the mining of cryptocurrencies such as Bitcoin has a great impact on the environment due to many factors, including the consumption and production of electricity, the consumption of hardware necessary for mining, the greenhouse effect generated by the air. The conditioning necessary to cool the farms, and of course the heat generated by the components. Ultimately, cryptocurrency mining is bad for the environment in many ways.

In early 2021, the electric vehicle company Tesla invested considerable amounts in Bitcoin to allow customers to buy their vehicles using this cryptocurrency. Although it received a lot of initial enthusiasm, Tesla’s investment in Bitcoin damaged its environmental credentials as a “green” company, and that is that according to Digicomunist, the Bitcoin network has an annual carbon footprint of 48.52 Mt of CO2, approximately the footprint of carbon from all over Bulgaria.


by Abdullah Sam
I’m a teacher, researcher and writer. I write about study subjects to improve the learning of college and university students. I write top Quality study notes Mostly, Tech, Games, Education, And Solutions/Tips and Tricks. I am a person who helps students to acquire knowledge, competence or virtue.

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