Cryptocurrencies, mining and the environmental impact: Is it really as bad as people say?


The debate over the energy intensity of crypto mining and the negative impact on the environment remains a hot topic all over the world. The view that cryptocurrency and the environment are incompatible is becoming increasingly common. The public is especially concerned about the mining impact of the pioneer in the world of cryptocurrencies and the largest coin by market capitalization, Bitcoin.

A brief guide to mining

Mining is the process of using powerful computer equipment to solve complex mathematical problems. The first miner to find the correct answer to a given problem is granted the opportunity to add a new block to the blockchain and earn a reward in the form of the network’s native coin. This is how the proof-of-work consensus mechanism is used to mine cryptocurrency on the blockchain.

The problem is that such complex calculations require an enormous amount of electricity, and Bitcoin mining farms are the leaders in terms of consumption. The average electricity consumption of the network is comparable to the needs of entire countries, such as Kazakhstan, Pakistan, Belarus and the Netherlands.

Experts disagree on the amount of electricity used in Bitcoin mining. It’s difficult to accurately asses the carbon footprint of the mining process, but there is consensus around the fact that cryptocurrency mining causes serious environmental damage.

Should we all switch to proof-of-stake?

Proof-of-stake (PoS) is an algorithm that doesn’t require participants to solve complex mathematical problems using powerful computer technology in order to become validators, add new blocks to the blockchain, confirm the legitimacy of transactions and receive rewards. All you need to do is own network tokens and stake a certain number of them for a certain period of time. Participants who stake more are more likely to add a new block to the blockchain chain.

The PoS consensus mechanism is much more environmentally friendly than PoW. Many people believe it could completely replace proof-of-work and solve the problem of the environmental damage caused by mining.

Notably, Ethereum migrated to PoS in September 2022.

Sounds like the perfect solution, doesn’t it? Well, let’s not throw the baby out with the bathwater just yet. PoW deserves a fair hearing.

Mining with PoW: A major disaster or a lot of hot air?

If you think about it, the process of Bitcoin mining seems absurd, as it wastes huge amounts of computing power (putting aside the profit for a moment). Miners solve meaningless mathematical problems, competing for the right to add a new block to the chain and receive a reward. To sustain this, power plants are working at full capacity, and quantities of energy that could operate entire factories or heat thousands of houses are wasted.

All over the world, the vast amounts of electricity consumed by thousands of large mining farms and hundreds of thousands of small ones ends up polluting the atmosphere. This has a negative impact on the environment.

According to various estimates, Bitcoin’s annual energy consumption is around 100–200 TWh (terawatt hours). The high spread can most likely be accounted for by the fact that some research groups want to present the crypto mining process in as negative a light as possible, while others want to whitewash it. The truth is probably somewhere in the middle – a figure that is still mind-boggling, of course.

It's true that mining and its negative impact on the environment presents a major issue, but is it something we need to be truly alarmed about?

The figure of 100–200 TWh represents less than 1% of global electricity consumption.

Additionally, NYDIG (New York Digital Investment Group) provided some interesting data in its 2021 report. Researchers estimate that, by 2030, the share of global carbon dioxide emissions accounted for by Bitcoin mining will be less than 0.1%. They are also of the view that this relatively small indicator will hold even if the cryptocurrency market’s overall capitalization reaches USD 10 trillion.

Some experts are proposing a fundamental solution to the problem of mindless computing in mining. They are hoping to redirect network virtual machines to solve useful tasks that are completely or mainly solved through similar mathematical calculations, and include complex scientific research, calculations for space exploration, and research into climate science and quantum physics.

At the same time, the crypto community itself isn’t ignoring the problem of excessive heating and is taking a responsible attitude to the consequences of crypto mining, hence the emergence of green mining.

Green mining 

Environmentally friendly mining involves the use of renewable energy sources such as hydroelectric power plants or solar and wind energy in crypto mining.

To mine in a way that doesn’t harm the ecosystem of our planet, or at least leads to reduced levels of damage, scientists are encouraging miners to use renewable energy sources that do not produce harmful waste during their operational lifecycle:

  • wind turbines;
  • geothermal energy;
  • solar panels;
  • hydroelectric power stations.

Many mining farms are already relocating to countries where green electricity sources are available, such as nations with powerful rivers and plenty of sun. Before the ban on crypto mining in China, for example, environmental friendliness was a key driving force behind the development of hydropower in Sichuan province, which at the time was home to almost half of the world’s Bitcoin production.

How countries around the world are helping to mitigate the negative environmental impacts of mining

Today, many countries are looking for ways to mitigate the harmful effects of mining on the environment. Let’s look at some examples.


This country is home to one of the world’s most famous mining facilities, Enigma, which was created by Genesis Mining and operates exclusively using geothermal energy.


Canada is a very interesting case study. The country decided to take a slightly different path and, instead of looking for alternative energy sources, turned “evil” into good by finding a use for the heat created by ASIC (application-specific integrated circuit) miners.

Average annual temperatures in the province of Quebec stand at around 5 °C, so heating homes and water here isn’t cheap. A company called Heatmine found a way to solve two problems at once: find a use for the excess heat produced from mining and at the same time reduce mining costs. As an experiment, the mining setup was connected to a greenhouse where strawberries were grown. The cost of heating the greenhouse fell by 75%. Heatmine is currently in the process of trialling the heating of homes with heat waste from crypto mining.

Myera Group also figured out a way to put its excess heat to good use. The company heats up water where fish are bred, and uses the water to look after plants in greenhouses.


The use of alternative energy sources is also increasing in the Land of the Rising Sun.

Back in 2017, manufacturer and supplier of solar energy Kumamoto-Energy created a subsidiary called OZ Mining, which mines cryptocurrencies by purchasing energy from Kumamoto. By using solar, OZ Mining reduces the harmful impacts of mining on the environment, while also solving the problem of excess generation of solar power on sunny days.

The UK

London’s EcoHashes cryptocurrency mining project was created in order to promote the efficient, economical and environmentally friendly mining of crypto at large. It mines using solar panels, wind and hydro generators in combination with energy-efficient mining equipment and next-generation cooling systems that have low energy needs.

El Salvador

In El Salvador, the President has instructed state-owned energy company LaGeo to mine Bitcoin “with very cheap, 100% clean, 100% renewable, 0 emissions energy” from the country's volcanoes.


Is mining harming our planet’s ecosystem, and to what extent? It’s certainly doing some damage. But the environment is also harmed by the automotive industry, mineral extraction, cattle breeding and much, much more.

We can say that in the grand scheme of things, mining is responsible for a comparatively small amount of environmental damage. At the same time, there are trends around the world pointing to the use of energy-efficient equipment and alternative renewable energy sources in mining.

Does the electricity used in mining vanish into thin air? As we can see, the answer is often no, as people are now finding useful applications for it.

In light of this information, it no longer appears as though proof-of-stake and other low-energy consensus mechanisms are our only source of salvation. Like everything in this world, in fact, they are far from flawless themselves.