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The total water consumption of the entire city of New York in 2022 was 1.525 trillion liters, while Bitcoin mining operations require 2.237 trillion liters.
A newly published study in the journal Cell Reports Sustainability has pointed out that Bitcoin mining could impact drinking water sources, especially in countries facing water scarcity, such as the United States.
According to the study, without regulations governing Bitcoin mining, the water consumption scale of this activity could have significant negative consequences.
The process of Bitcoin mining consumes a substantial amount of energy during the validation on the blockchain network. This activity is described as a guessing game, where the first person to guess correctly receives Bitcoin rewards and creates the next block in the blockchain. Each blockchain network takes about 10 minutes to create a new block, and a built-in mining difficulty adjustment mechanism maintains a stable issuance rate.
The only way to win this reward is through the trial-and-error calculation process, with the entire Bitcoin network generating around 350 million trillion guesses per second as of May.
Each new block created rewards 6.25 Bitcoin, distributed among mining systems globally. As only the winner of the “game” receives the reward, this process is highly competitive, forcing investing companies to have modern mining equipment in large quantities. Currently, the Bitcoin mining network mainly consists of millions of specialized devices located in the United States and Kazakhstan, where the reward rate is higher due to having more mining machines.
For Bitcoin mining in the United States, in addition to consuming electricity, water is also needed to cool the system and humidify the air for mining devices.
According to EuroNews, the energy consumption of digital currency in 2020 was higher than the total energy consumption of Pakistan. However, the water usage for a Bitcoin transaction is rarely reported and likely higher than estimates.
Furthermore, the calculation process behind Bitcoin mining systems in the United States used 2.237 trillion liters of water in 2022. Meanwhile, according to the U.S. Geological Survey, the total water consumption for residents and businesses in New York City in the same year was 1.525 trillion liters. With an average of 113 million Bitcoin transactions during this period, each transaction in the U.S. consumes more than 16,000 liters of water – enough to fill a small swimming pool.
With the price of Bitcoin surpassing $40,000, Alex de Vries predicts that the water consumption of the world’s largest digital currency will also increase to 2.3 trillion liters, more than 40% higher than in 2021. This will be a challenging issue for countries in Central Asia, such as Kazakhstan – one of the leading digital currency mining centers in the world.
De Vries argues that using renewable energy instead of electricity is not an ideal solution to reduce Bitcoin’s carbon footprint as the availability of renewable energy is still limited in many countries.
However, if Bitcoin adopts a more environmentally friendly technology, the damage will be significantly reduced. Bitcoin currently uses the Proof of Work (PoW) model, requiring miners to compete to solve transaction verification problems. The one who provides the first answer will create the next block and receive cryptocurrency rewards. The amount of electricity consumed by machines to solve these problems is considered “proof of work” to ensure consensus on the system.
Bitcoin could also switch to a new mechanism if it obtains consensus from participating miners, but De Vries believes that many Bitcoin miners do not want to change to preserve their investments.
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