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Cryptocurrency Mining Has Surprising Environmental Revelations

Brian Austin
Brian Austin Bitcoin

Recently, I came across what at first glance seemed to provide a thought-provoking document that explores the energy use of mining cryptocurrencies in comparison with mining for sources like copper, gold, silver, and platinum.

You can check out "Quantification of energy and carbon costs for mining cryptocurrencies" at:

However, on closer examination of "Quantification of energy and carbon costs for mining cryptocurrencies", as others have also done, the researchers appear to me to have made a fundamental mistake in their approach.

Even though I think the report authors have on this occasion missed the target, I thank them for doing great work, congratulate and commend them on the sheer amount of useful and valuable information that can be found within their compelling report.

Nevertheless, as a result of what I believe is an initial oversight or key assumption as identified below, the deeper the researchers explore the issues, not surprisingly, the further off-course the overriding argument seems to me to go.

Why The Difference Between A Raw Material And A Finished Product Has Massive Implications

So why do I think the "Quantification of energy and carbon costs for mining cryptocurrencies" research study has fallen short?

The report suggests that dollar for dollar, mining cryptocurrency, especially bitcoin, uses up more energy than mining gold, copper, silver, etc.

However, there's a big problem. Consider:

  • When a bitcoin is "mined", the bitcoin is a finished product. No further processing is necessary to use a bitcoin. Spend it, save it, give it away, help your government and pay your taxes with it (why not), and of course, stay legal. Likewise, when "mining" for Ether (on the ethereum network), or Litecoin, or Monero, and all other cryptocurrency "coins", each "coin" created through cryptocurrency mining is done, complete, ready to use.
  • In contrast, when copper, gold, silver, platinum, etc., are mined, they are not finished products, only "raw materials", the start of the cycle, not the end. A "raw" product needs transportation, further processing, manufacture of something, distribution, storage, still more transportation, all of which have significant additional financial and environmental costs.
  • Furthermore, some raw materials need to be combined with other raw materials in order to make additional useful end products, compounding the processing and environmental costs higher still! For example, both gold and silver may be used in electronic products, or jewellery.

Added together, these extra environmental costs probably equate to considerable more energy use and generation of carbon dioxide (CO2), before each item can be considered to be a finished product, like Bitcoin.

The "Quantification of energy and carbon costs for mining cryptocurrencies" report (and others) seems to miss this key point.

So surely the only meaningful, fair comparison in a study like this would be to compare like-for-like. To attempt to compare a finished product with raw material will skew the results.

Comparing like-for-like surely offers one way in which we can identify if a claim or assertion is broken from the outset.

How To Find Meaningful Discoveries

To research better, surely we must:

  • Start with an open mind.
  • Remain flexible.
  • Ask better questions.
  • Stay independent. Resist outside pressure to conform, to support a particular viewpoint. If we don't, isn't our entire credibility questioned?
  • Allow ourselves to be persuaded by test research results. Be original.
  • Foster the courage to report our findings whatever they may tell us. If we don't do that, what's the point?

How much more valuable would the "Quantification of energy and carbon costs for mining cryptocurrencies" report have been if the report authors could have properly covered the energy use comparison between cryptocurrency mining and one or more end products of gold, silver, copper, etc.?

Without doubt, any applicable end-product comparisons are better than none. In a future follow-up, who knows, maybe the report authors may do just that. 

So perhaps our most important start-off truth hint presented to help anyone who truly wants to create a great research study, that can stand up to scrutiny better is to ask better questions.

What Happens When Momentous Changes Affect Entire Industries? 

So we can also ask the simple question:

Who and what does the greater use of bitcoin, blockchain, and cryptocurrencies affect?

Of course, the list of entities, organisations, industries impacted by the fast growth of blockchain and cryptos is a long one.

You could take your pick from a range of sources that emerging cryptocurrencies challenge in one or more ways. Which might help explain why we can read so much information online that almost seems to be copied from one source to another.

But change happens for clear reasons. We all evolve. We know that nothing stays the same for ever.

Yet naturally, the instinct to control or to strive to keep things as they are is strong.

Why Like-For-Like Comparisons Make Sense

Surely, only by comparing one finished product to another is one reasonable yardstick. Only then can we have a true comparison, yes?

Nevertheless, I admit, attempting to compare like-for-like between cryptocurrency mining outputs with traditional mining end user products is a mighty difficult task.

The research mission is made much harder than just comparing cryptocurrency mining with, say, gold mining.

Where do you begin? What benchmarks do you choose? The number of questions you must then ask multiplies many times. And so on.

However, in reality, perhaps the differences may not be so different.

Even supplied with the results of a like-for-like research study, we may still find that mining cryptocurrencies is (sometimes / perhaps) more energy draining than, for example, producing one or more:

  • Electronic circuit boards containing gold contacts, built into an end-user product. Or ...
  • Silver jewellery necklaces, on display in a retail shop.
  • Computers, tablet devices, smartphones, delivered to point of use.
  • Gold- or Silver-backed financial transactions.
  • Gold- or silver- based dentistry solutions, manufactured, tested, regulated, distributed, and delivered to point of use. 
  • Crucial medical apparatus that uses gold, and / or silver, or other rare earth metals. Ditto as above.
  • Essential aerospace industrial applications. Ditto as above too.
  • And so on.

Clearly, true comparisons are not so simple. There are lots of additional environmental costs to modern living.

Yet until we make better, more accurate comparisons, investigate more thoroughly, how can we ever know for sure? 

Cryptocurrency Journey To The Green Side

Whatever the real facts may eventually show, certainly, mining proof-of-work cryptocurrencies is currently a high-energy demand activity compared to, for example, switching on an LED light bulb.

However, I suggest that the current comparative high energy cost of mining some cryptocurrencies can, for a while at least, actually be a good feature. Here's why:

  • Electricity generation companies sell more product. Electricity suppliers benefit from inefficient electricity generation. More taxes made and paid. Governments gain income (though still lose against failing CO2 targets).
  • Urgent problems tend to more easily get to the front of the line.
  • Troublesome difficulties that affect profits tend to focus collaborative minds better, create added urgency, so that such drawbacks get resolved sooner rather than later.
  • Sometimes, fixing the core hassle (high electricity costs) contributes to solving other stumbling blocks, both related to, and outside of the core areas. Spin-offs can emerge, causing ripples elsewhere. Benefits can spread and jump across entire industries.
  • Who knows, we may discover that solving Bitcoin mining's energy problem may also provide global energy saving initiatives from which everyone else can benefit, that otherwise might not be found for 10 more years or longer.
  • Especially when the values of cryptocurrencies fall, electrical costs become an even greater drain on Bitcoin miner profits, propelling greater desire for crypto miners to cut their manufacturing costs.
  • The result so far: to continue to mine cryptocurrencies, frantic massive green energy steps are already being taken to reduce costs, design more efficient mining rigs, or move operations to different areas in the world where cheaper green- or solar-generated energy is more easily available.
  • Some cryptocurrency mining companies use spare hydro-generated electrical capacity, that might otherwise not get used. Often, when spare electrical capacity is not used, it's simply wasted, thrown away. Better: less waste is always a good guideline to put into practice.
  • Sometimes, the large scale extra use of cryptocurrency mining through green energy or hydro power sources, can even help reduce the unit cost of consumer electricity for people living in the same region. When was the last time your electricity bill went down?
  • In addition, a growing number of high profile crypto currencies are moving away from high energy demand "proof-of-work" methodologies, to investigate and explore dramatically reduced energy-saving "proof-of-stake", "proof-of-ownership", and so forth.

Even without any initiatives that help save energy, any move away from "proof-of-work" mining done in cryptocurrency, means less energy is required to mine cryptocurrency "coins".

Some Improved Energy Generation Initiatives From Around The World

Sweden may be the most energy ambitious country with a target to completely eliminate its carbon emissions by 2045.

Yet Sweden is also one of the leading cryptocurrency-friendly nations

Perhaps not surprising when we consider that north Sweden's cold climate, numerous sources of renewable electric power help encourage a growing desire for Bitcoin mining.

Estonia too is using renewable sources to power bitcoin mining.

Marubeni, one of the world's largest power generators, announced that it will not build any new coal plants in Japan. A positive step in helping to reduce CO2 levels generated by Japan.

China especially seems to be making huge leaps in moving to green energy, halting 150GW of coal plants, with much more ambitious plans ahead.

Perhaps in a few years, most or all coal-fired plants in China may have been replaced by green energy generators such as hydro and solar.

Likewise, the USA, the UK, EU, the Middle East, Canada, India, Australia, New Zealand, and more, are all rapidly turning to green energy sources. The green trend is we hope, unstoppable.

Maybe, the real problem is not so much with mining cryptocurrencies, but about us, and how we live

How so?

Probably most of the word's carbon dioxide emissions and greenhouse gases are created by our excessive reliance on a few core areas, including our use of:

  • Energy generation: no surprises here.
  • Transportation of goods and people: vehicles: cars, lorries, airlines, maritime shipping. We can reduce transportation by manufacturing closer to site need. We can reduce transportation CO2 levels by travelling further less often, unless CO2-free fuels or cleaner engines are perfected quickly.
  • Industry: product generation, distribution, and management. However, there are hopeful signs.
  • "windy" agricultural animals. Yes, we know methane gas is not CO2, however, methane is an even more damaging greenhouse gas. More accurate results from recent studies suggest that methane is 23 times more damaging than CO2.

As much as any other meat eater, I too love a beef steak or bacon sandwich. However, I think the coming development in food science and technology, will provide alternatives that can allow us to make better choices. 

So if most countries can find ways to change our relationship with at least the 4 areas above, globally, we could be in a better place sooner.

Right now, the 4 main areas above help us maintain relatively comfortable civilised living for growing numbers around the world.

However, most of us know, humanity must do more to make all 4 sectors more energy efficient.

Thankfully, we have more reasons to be cheerful:

Key tip: when you follow the 3 links above that lead to an amazing, informed, in-depth, stunning 3-part series about environment impacts today, at the time of writing, Bitcoin mining isn't even mentioned as a threat.

In addition, perhaps led by the likes of Facebook, Apple, Amazon, Netflix, Google, Microsoft, and an ever growing list, lots of companies and organisations are working out better ways to be kinder to our planet, yet still provide their wonderful products, services, deliverables.

Well done: kudos and much gratitude to all organisations large and small that are aiming for zero carbon emissions!

For me personally, as a Brit, "The story of the greatest technological challenge in human historymakes an interesting, and slightly unsettling observation:

  • The world’s first public coal-fired power plant was built in London in 1882. Yet ...
  • Today however, Britain, led by Scotland, seems to be on an especially speedy green energy path.
  • So we wonder, will the first country in the world to develop coal-fired power now be one of the first to end it?

If we British were among the first at the start of the problem, perhaps it's fitting that we're also among the first to help resolve the problem, that contributes to excessive greenhouse gas emissions. Let's hope so.

Just ust as importantly, governments must surely find ways to support and help those people who are working in these dying industries, to find new fields of work.

As for cryptocurrency mining, the evidence seems to suggest that the real threats to our environment be found elsewhere?

"It's us, we humans; it's always been us."

Some superb practical, real-world carbon-cutting solutions could include initiatives like:

  • For the millions of people who spend most of their work hours interacting with computer or device screens, for most of the working week, some could work from home. Though home working is not suitable for everyone, so we could use "local work hubs" near to where we live.
  • We can but wonder how many currently empty local and regional buildings could be repurposed with minimal cost to provide "local work hubs" for 5, 10, 20, a 100 people? Everyone wins and the environment wins too.
  • A much greater faster uptake in the use of electric vehicles. Lower prices would help. Who we wonder, will be the first to reduce prices, sacrifice some profit now, to urge faster mass take-up and therefore capture dominant market share early on? Tesla? GM? Dyson? Apple even?
  • Faster rollout of safe self-driving vehicle technology
  • Mass rollout of government subsidised electric buses.
  • More electric taxis and use of electric mini-buses available to order on demand.
  • More and better electric trains and trams.
  • Plus of course, (somehow) a massive worldwide reduction in the use of petrol and diesel vehicles.
  • Use of more and better video-conferencing technology to allow "long distance" meetings without flying, in combination with millions of fewer transatlantic flights, etc. I wonder how many transatlantic business meetings:
    • (a) Are really truly essential to the outcome, done simply through habit and resistance to change.
    • (b) Could be done equally well using the latest reliable video-conferencing technologies.
  • Fund and encourage food manufacturers to create healthy "meat-like products" that are delicious, safe to eat, affordable, though not sourced from agricultural animal production. I would love a great tasting bacon sandwich that does not require the need for any dead pigs or animals to suffer. Then pay farmers differently: to protect, develop, and preserve natural landscapes.

With initiatives like those suggested above:

  • Our roads would be less congested - free more road space for those folks who really must make essential journeys.
  • Pot-holes on our roads might get filled sooner, better, and last for much longer, especially appreciated by those folks who must still use their own vehicles.
  • Fewer vehicle-related accidents and less vehicle-sourced crime, making roads safer, and saving already hard-pressed police resources.
  • Fewer flights should mean that the skies would become clearer, our world quieter.
  • CO2 levels should go down.
  • The air in our cities would be less polluted.
  • Our landscapes would slowly transform for the better.
  • And so on. The benefits to all are many and varied.

Will Cryptocurrency Energy Use Become Irrelevant?

Clearly, lots of organisations in different countries are mining cryptocurrencies using electricity powered by green energy, that adds nothing to CO2 levels.

Referring back to the "Quantification of energy and carbon costs for mining cryptocurrencies" report, the issues and objections raised, even with its arguably skewed analysis, the report may be chasing a ghost of a problem that will diminish sooner rather than later.

Here's why.

Katrina Kelly-Pitou, Strategy Manager at the University of Pittsburgh’s Center for Energy, suggests:

Even if Bitcoin technology were to mature by more than 100 times its current market size, it would still equal only 2 percent of all energy consumption.

So in the coming years, who knows, by some fluke, Bitcoin mining could grow by x100. If yes, given all the above steps to reduce Bitcoin mining costs, perhaps Bitcoin mining-related carbon dioxide emissions would still be tiny in comparison to our use of too many petrol and diesel vehicles, humans flying too much, wasteful industries, our inefficient homes, our love of products from cows, pigs, and chickens.

In addition sometimes, predictions can make fools of us all.

At the start of a prediction, we can often underestimate the astonishing, ever-increasing rate of technology change. As we have explored, improved technology benefits can come into the wider world faster, sooner, better than most of us expect. 

In the meantime, higher electricity costs in combination with lower Bitcoin values may make Bitcoin mining unprofitable for all but the largest mining companies. 

However, what offers a stronger stimulus than reduced profits, for cryptocurrency miners to find and use low cost green energy solutions?

So perhaps sooner than we might think, Bitcoin mining and cryptocurrency mining in general may even become predominantly carbon-neutral. Surely an attractive prospect for those who mine cryptocurrencies.

For sure, time will tell.

Bitcoin mining, blockchain, cryptocurrencies, decentralisation are 4 areas that look set to provide the entire world with astonishing benefits, even a new and better Internet. We would be wise to let people choose freely. Allow the markets of consumer user supply, desire, and demand to show us the way to a better future.

Though without doubt, finding true, independent, balanced research studies that we can trust can be a challenge.

Perhaps the central message of this article and my suggestion is dear reader: if you want to be a better informed, critical thinker: dig deeper.