Bitcoin trading has become increasingly popular in the last 10 years. Today, one Bitcoin is worth about $87,000 USD, and the global cryptocurrency industry’s worth is estimated around $2.6 trillion USD. Bitcoin operates as a digitally “mined” currency. Rather than gold being pulled from the Earth and valued based on scarcity, bitcoins are “mined” by servers from blocks (long sequential number chains), which equate to a complex mathematical equation. Bitcoin “miners” are then tasked with solving these block equations, with the reward being one new bitcoin. The ins and outs of bitcoin mining are extremely complex, but mining one bitcoin consumes approximately 155,000 kWh of energy. Comparatively, the average US household consumes approximately 90 kWh of electricity in one month. 

Recent research on the effects of bitcoin mining on air quality found that 34 Bitcoin mines combined used about 33% more electricity in a day than the entire city of Los Angeles. Similar to how AI data centers work, Bitcoin servers require high energy input to run and large amounts of water to cool computers and data centers. The energy demand from these data centers is so great that it can only be met by fossil fuels. 

Mining for gold can also be a very environmentally taxing endeavor. Pulling gold and other precious metals from the Earth consumes significant amounts of energy in different ways and presents several more ethical concerns, such as fair labor and trade issues. The gold and cryptocurrency industries are estimated to each produce around 100 million tons of CO2 in a year, based on research done in 2023; however, the gold industry is worth vastly more than cryptocurrency, being valued at around 14 trillion dollars. Additionally, gold is less variable as a currency than what we have seen so far from cryptocurrency. 

When executed sustainably, bitcoin and other cryptocurrencies do present positive environmental opportunities as alternatives to precious metal mining. But sustainable mining practices are developing faster than sustainable data and server technologies. Until we can switch to reliable and consistent renewable energy sources for our quickly evolving tech needs, we are faced with a world that is becoming more and more reliant on fossil fuels and uses more energy each passing year. Bitcoin and AI data centers are at the forefront of discussions on regulations for companies producing large amounts of pollution or consuming large amounts of resources. Ensuring that these companies are held accountable and that resource use is regulated is the most promising path forward for the future of cryptocurrency. 

By Mia Moore