Proof-of-work mining has environmental impacts (often phrased as "Bitcoin wastes lots of energy and harms the environment").

Is Bitcoin Mining, or More Generally “Proof-of-Work” Mining in Cryptocurrency, Hurting the Environment

Proof-of-work mining (the type of mining used for Bitcoin and other cryptocurrencies) has some negative environmental impacts… as do the systems behind most other mediums of exchange.[1][2]

In other words, proof-of-work mining takes a lot of computing power (“the why” is explained below), thus uses a lot of electricity, and therefore there is an environmental cost related to the amount of electricity used (and less so, the environmental cost of building and disposing of the hardware). However, the same can be said for maintaining bank credit, printing paper dollars, mining gold, etc.

Essentially all value stores and mediums of exchange have an environmental impact, and Bitcoin and other cryptocurrencies that use proof-of-work are no different (which is hardly a selling point).

Luckily, like with the software and hardware needed to support bank credit (and to some extent other systems required to support other currency and value store types), the way cryptocurrency mining works is not set in stone.

Bank credit and cryptocurrency are both largely software and hardware based. Software can be updated and hardware can be made more efficient. We can reduce the impact of mining gold, we can reduce the impact of the world’s digital banking system, we can upgrade PayPal, and we can reduce the impact of mining cryptocurrency.

The problems and solutions for each type have parallels, just like the benefits of having each type have parallels as well.

That all said, to understand the impact of proof-of-work specifically, we have to know what it is.

TIP: “Mining” secures Bitcoin transaction data on the Bitcoin Blockchain using computing power provided by users from around the globe. It takes a lot of computing power to be competitive in the mining space. Check out the video below to get an idea of why Bitcoin mining has a computing power problem.

A look inside America’s largest Bitcoin mining operation.

TIP: The fact that proof-of-work mining systems are wasteful has been long known, however the idea was brought to popular attention via a study done by Cambridge Centre for Alternative Finance. See: Global Cryptcorurency Benchmarking Study.

What is Proof-of-Work Mining?

In simple terms, proof-of-work mining is software that solves cryptographic puzzles. These puzzles secure transactions to a digital ledger called a blockchain. Essentially anyone who owns a cryptocurrency that uses proof-of-work can run the software and try to solve these puzzles. However, the more transactions that are done, and the more computing power used, the more computing power that is needed. As, these systems change their difficulty based on how quickly puzzles can be solved.

This creates a sort of loop in which more and more power is needed. The need for more and more power and better hardware is what is causing the negative impact.

Bitcoin – Proof of work. Learn more about Proof-of-Work from KhanAcademy.org.

TIP: The fact that computers around the world are running a full copy of the digital ledger (the blockchain) adds to the electricity consumed by Bitcoin and other cryptocurrencies.

FACT: The work it takes to crack the puzzle is the work referred to in proof-of-work. This work helps give value to the currency, secures the ledger, organizes the ledger, and results in newly coins being created. Its the backbone of Bitcoin’s blockchain (and other like systems).

What Are There Solutions For the Proof-of-Work Problem?

Essentially the rather wasteful proof-of-work system has been a necessary evil since day 1.

The fact that it is wasteful has not been lost on anyone. There has always been this idea that a better system exists.

Sure, proof-of-work solves a ton of problems and can be justified away by pointing to other value stores and electronic systems or by pointing to all the value it creates (by securing the ledger and sustaining cryptocurrency systems)… but those justifications magically mean everyone can rest on their laurels.

Of course, people haven’t been resting.

Solar energy has been one theoretical solution on the table.

Meanwhile, other systems that have been played with include proof-of-stake (where the work done by computers is replaced by proving ownership of a certain amount of a given coin) and systems like Ripple, IOTA, and Stellar (which don’t use traditional blockchains).

However, despite the above attempts, not perfect solution has been found yet.

That said, Bitcoin like other cryptocurrencies is software, so a solution is theoretically possible (and really only requires a software update). We just aren’t there yet.

Will you be the genius who figures out the solution? That would be great. I suggest tokenizing that solution and making it open source 😉

Proof of Work vs. Proof of Stake and why I feel Proof of Stake is superior.

FACT: In cryptocurrency trading (and other trading), talking-point like headlines that are half true or not true, and sow Fear, Uncertainty, and Doubt are referred to as FUD. One could argue that the idea that “Bitcoin is wasteful and will destroy the environment within 10 years” (stuff like that) are FUD. Remember, software can be updated. So while facts like “By July 2019, the Bitcoin network will require more electricity than the entire United States currently uses. By February 2020, it will use as much electricity as the entire world does today” are true. However, the spreading of those facts in a negative manner without providing counterpoints is unnecessarily “FUD-y.” See: Wired’s Bitcoin Mining has a Masive Carbon Footprint. [3]


Proof-of-work mining has a negative environmental impact due to its use of electricity and computer hardware required to solve the cryptographic puzzles that secure the digital ledgers associated with cryptocurrencies. Other less wasteful mining system are being explored, this being one of many potential solutions to the problem.


  1. Cambridge Centre for Alternative Finance’s Global Cryptcorurency Benchmarking Study. jbs.cam.ac.uk
  2. Bitcoin Mining ‘Wastes Vast Amounts of Energy, Harms Environment’. CoinTelegraph.com
  3. Bitcoin Mining has a Masive Carbon Footprint. Wired.com.

"Cryptocurrency Mining is Destroying the Environment" is tagged with: Climate, Climate Change, Cryptocurrency, Cryptography, Environment

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