Is Bitcoin Bad for the Environment?

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Nearly everything we do has an environmental footprint to be aware of - from driving to work to using a dishwasher to investing in bitcoin, which is why, as a cryptocurrency lover, you may have found yourself looking up ‘is bitcoin bad for the environment?’

While the issue is complicated, many companies, including those related to bitcoin and other cryptocurrencies, are working on sustainable practices and developments to shape the industry's future. History shows that everything, including cryptocurrency, can become more sustainable with the correct methods.

So, is bitcoin bad for the environment?

The mainstreaming of cryptocurrency has been a big deal for the finance world - and the rest of the world along with it. 

Bitcoin hit a record high of $62,741 on April 12, 2021, and interest has soured over the past few years with the help of promoters like Elon Musk. With that, the cost of investing in bitcoin has naturally gone up, as has the profit of "mining" it. The act of bitcoin mining is not a literal act but rather one fueled by terawatts.

What is Bitcoin Mining?

Bitcoin mining is a process where bitcoin is created and recorded not by a bank but a blockchain. This public ledger keeps data stored in “blocks” linked together in a permanent “chain”. When a new block is added to the chain, it makes the ones before it impossible to modify, making the past blocks secure. In the traditional “Proof of Work” system that bitcoin uses, miners must compete to register the latest block by solving complex algorithms, and the first to the solution receives the new bitcoin.  

While mining was once done by random individuals with regular, everyday computers, it is now primarily run by large organizations with specialized computing devices. These are sometimes referred to as mining rigs. They operate similarly to rig farms, chasing cheap energy in places like Siberia (where the temperature is perfect for large, easy-to-overheat computers), allowing maximum profits with minimal expenses. 

Bitcoin mining operations now use around the same annual energy consumption as the entire nation of Sweden, which is in part because Bitcoin's system is a competition, where the overuse of energy can determine the 'winner' of each newly minted bitcoin.

So is bitcoin bad for the environment? Mining for it can be. But there are actions that individuals can engage in to make cryptocurrency more sustainable at every point in the mining process - from creating the blockchain systems to the eventual spending of this digital currency.

How Can Bitcoin be More Environmentally Friendly?

There are several ways that bitcoin, bitcoin mining, and cryptocurrency, in general, can transition into being better for the environment. While some of these issues rely on mining companies to make the change, there are also ways individual users can better support green cryptocurrency.

Energy Efficient Blockchain Systems

Perhaps the most effective way to make bitcoin better for the environment is to create more energy-efficient blockchain systems. There are two major blockchain systems used by cryptocurrency systems: 'Proof of Work' (or PoW) and 'Proof of Stake (PoS). 

PoW systems require miners to engage in the traditional cryptographic problem-solving process to operate. While in this system, miners compete with each other on who can problem-solve first, which takes up such a huge chunk of energy, which is the system bitcoin currently uses.

PoS are systems that rely on market incentives to run - they put down a cryptocurrency stake in exchange for the right to add blocks to the blockchain. They're not even called 'miners,' instead of going by 'validators.' In this system, validators are chosen by an algorithm, which considers the amount of stake they put down, which removes the element of competition, which saves energy. Already other cryptocurrencies (including major cryptocurrency Ethereum) are transitioning away from PoW and into PoS systems.

Green Energy Blockchain Mining

A quick fix is switching to mining with exclusively solar power, windmills, and other green energy sources. Each company that uses blockchains also defines its system for miner compensation, meaning companies could offer incentives to their miners to use green energy.

Several different commercial services exist for powering crypto mining on server farms that focus on using renewable energy. A great example is Genesis Mining, an Iceland-based company that uses 100% renewable energy and is now among the largest miners in the world.

Switch Cryptocurrency

There are many cryptocurrency options other than bitcoin. Some, like SolarCoin (SLR) or BitGreen (BITG), are specifically created to incentivize solar energy and eco-friendly activity - for example, BitGreen rewards users who carpool or volunteer.


For those concerned about making a switch, other significant options are available to those used to dealing with bitcoin. Many cryptocurrency ATMs like Pelicoin not only work with Bitcoin but also Litecoin and Ethereum. As we mentioned before, Ethereum is an excellent pick for those still wondering, 'is bitcoin bad for the environment as they're already working on creating more self-regulation and sustainable practices for themselves.

Switching from ‘Is Bitcoin Bad for the Environment’ to ‘Making Bitcoin Better’

In some places, drastic measures are being taken to reduce cryptocurrency emissions. For example, in Inner Mongolia (an autonomous region near China), one Bitcoin hotspot was responsible for almost eight percent of Bitcoin's overall hash rate before banning all mining. The region was a favorite for mining companies due to its low energy costs. China continues to be the most prominent cryptocurrency mining spot (with the United States taking a distant second place); however, this is in the process of changing with China’s crypto crackdown. This is causing a decentralization of mining.

Individual businesses are also taking a stand against mining practices. Even Tesla - which former 

bitcoin influencer Elon Musk himself runs - recently announced in a tweet that they would no longer accept the cryptocurrency due to the environmental issues around mining.

It seems like cryptocurrency is no longer considered a fad by major markets; it's more or less here to stay. It's been shown that individual accountability, like supporting already green companies and PoS systems, can be the first step to forcing large-scale companies to take environmental concerns seriously. This way, bitcoin can become better for everyone. 

If you're still wondering, 'is bitcoin bad for the environment?' and want to learn more about cryptocurrency, check out our network of information for more!