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Bitcoin, due to the energy-intensive nature of its mining process, has been under scrutiny for its environmental impacts for a long time. Introduced to our lives in 2008, Bitcoin has never been hacked. The rigorous security measures provided by the Proof of Work (PoW) contract mechanism continue to add value to the cryptocurrency. However, the PoW mechanism is energy-intensive and relies on complex cryptographic algorithms that require significant computational power.
Significant Research on Bitcoin Mining
According to research by the University of Cambridge, Bitcoin’s global popularity has led to its network energy consumption being close to the annual average energy consumption of countries like Poland, Ukraine, and Malaysia, with 147.61 terawatt-hours as of December 7th.
Bitcoin’s PoW contract mechanism has become an immutable security guarantee, but some continue to see it as an environmental nightmare. The Bitcoin mining industry is increasingly turning to renewable energy sources to address these concerns, and new studies are now pointing to another ecological problem; the high water consumption of crypto mining.
A new study titled “The growing water footprint of Bitcoin” by Alex de Vries, a data analyst and researcher at Vrije Universiteit Amsterdam and De Nederlandsche Bank, reveals Bitcoin’s potential to harm the environment due to its water consumption.
The Bitcoin mining industry continues to grow every year and reaches all-time high hash rates. As the price of Bitcoin increases, this trend seems set to continue.
Bitcoin Mining and the Power of Water
Like any computer, mining devices must have a cooling mechanism to operate optimally. Bitcoin mining equipment consists of hundreds of machines that reach very high temperatures while trying to solve the complex mathematical challenges presented by PoW.
Water is commonly used for cooling systems and air humidification systems. It can also be used indirectly to generate electricity. As the study indicates, Bitcoin’s water footprint in 2021 increased by 166% compared to 2020, a significant rise.
De Vries acknowledges the difficulty of directly measuring the water footprint due to limited public information. Moreover, combining direct and indirect water consumption from the data obtained, he estimates that the total annual water footprint for Bitcoin miners in the United States could range from 93 to 120 gigaliters (GL), roughly equivalent to the average annual water consumption of about 300,000 U.S. households.
