Bitcoin, Environment, and the Proof of Work System: Is Time Running Out?

Bitcoin and cryptocurrencies in general are notorious for their high environmental impact. As climate change continues unabated, this topic can dampen enthusiasm for the revolutionary potential of cryptocurrencies. We take a look at developments in the bitcoin/environment question and ask what crypto can do to mitigate its environmental impact.

bitcoin environment

Can Bitcoin Reduce Its Immense Power Usage?

The proof of work system is considered to be at the root of the cryptocurrency’s environmental impact. It requires an extraordinary amount of computer power to mine coins. While proof of work is extremely secure and some would argue fairer than other methods such as proof of stake, it will remain an environmental bugbear for the currency as long as it is central to its operation.

How Big is Bitcoin’s Carbon Footprint?

The University of Cambridge calculates that the network uses around 123 terawatt-hours annually. It has been reported to produce a carbon footprint on the same scale as the entire nation of Thailand, a country of almost 70m people.

The number of bitcoin wallets was reported to be around 80m by mid-2021, but it’s worth bearing in mind that many of these users are from wealthy Western countries and produce their own significant carbon footprints independently of bitcoin.

The North-South Energy/Effect Divide

Mining nodes are typically concentrated in the Northern Hemisphere, with the beneficiaries also typically living in this region. Conversely, the impact of climate change is set to hit the Southern Hemisphere hardest, especially smaller island nations with poor infrastructure to defend against rising sea levels.

north-south energy/effect divide

Bitcoin and other cryptocurrencies will have to find a way to live up to their promise of decentralizing financial power and putting it in the hands of ordinary people, or ordinary folk in vulnerable areas may end up paying a heavy price for the ultra-rapid progress of wealthier nations.

Environmentally Friendly Alternatives to Bitcoin: Are They Viable?

A persistent issue with addressing the bitcoin/environment problem is that it doesn’t operate as an entity. It can’t attend the COP26 and make promises. Nodes can’t offer to plant trees. However, other cryptocurrencies are making more centralized decisions to switch to a more environmentally friendly model.

environmentally friendly alternatives to bitcoin


Ethereum aims to make its infrastructure more efficient and transition to a proof of stake system. It claims that this transition will reduce its energy consumption by 99.95%. This is quite a claim and would represent a major advance in the currency’s environmental credibility compared to the fraught bitcoin/environment relationship.

It remains to be seen if this promise will work out as planned.


Cardano is the brainchild of one of Ethereum’s founders. It has a far more efficient computing network than bitcoin and uses a proof of stake system. It claims to be far more scalable than competitors – this will be better understood if Cardano grows in popularity.

Will Competition Force the Bitcoin/Environment Question To Be Answered?

With rival cryptocurrencies seeking to drastically improve their environmental performance, it remains to be seen whether bitcoin will be able to respond effectively and boost its environmental credentials. The crypto world moves fast, and without action, this could pose an existential threat to the world’s most popular cryptocurrency.

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