Every day, fortunes are won and lost trading cryptocurrency worldwide, often with experienced traders fleecing naive investors. The negatives of mining and trading cryptocurrency extend beyond the many pump-and-dump schemes with meme coins, though; crypto is also often bad for the environment when it isn't mined responsibly.
What is the environmental impact of cryptocurrency mining?
In essence, crypto mining uses high-powered computers to solve complex mathematical problems and generate currency. As more "coins" are mined, the equations become more difficult and require more power to solve. Ultimately, this creates two severe ecological consequences.
First, the sheer energy demands of crypto mining are staggering. In 2024, bitcoin mining used the equivalent of the energy consumed by Poland. Worse, the energy used in cryptocurrency mining often comes from dirty fuel sources like coal and oil. It's no surprise that the United States and China use the most computational power worldwide, but the crypto bronze medal from that data may raise some eyebrows: Kazakhstan.
The large central Asian nation had the third-highest hash rate in the world, around 13% of the global total (per World Population Review). The majority of that gigantic energy expenditure is powered by coal; only 6% of Kazakhstan's energy comes from renewable sources.
That said, the country had such a problem with bitcoin mining that it began pushing miners out, and by 2023, most of them were gone, as MIT detailed — which helped to spur more mining companies to own and operate their own renewable energy. The country is now aiming to develop its own national crypto bank to better regulate the activities so "black market" miners cannot take advantage of the nation's relatively cheap, albeit polluting, energy.
The second ecological issue is e-waste. Crypto mining generates vast quantities of electronic waste each year. Bitcoin created over 33,800 tons of e-waste in 2021. Because the materials used are toxic and not biodegradable, disposing of unwanted electronics is a serious environmental concern. A 2015 UN report found that the vast majority (60-90%) of e-waste was dumped illegally.
Some crypto mining companies, such as Mara Holdings, have responded to this trend by scaling their business to keep older-generation mining hardware in use and operate on effectively free (once built) renewable energy, which allows the profit margins to remain high without needing the most cutting-edge tech.
Why is the environmental impact of cryptocurrency mining important?
Because it is profitable and requires little effort, crypto mining is difficult to regulate and nearly impossible to discourage. Burning dirty fuels to mine crypto contributes to air and water pollution, which in turn contributes to extreme weather events.
As countries struggle to meet climate goals, energy-sapping activities with dirty fuels only make it even more difficult. Another big problem is the lack of unified action regarding cryptocurrency. While some nations try to reduce the impact, others actively encourage it, regardless of the consequences to locals.
What is being done to mitigate the environmental impact of crypto mining?
Some nations and states have attempted to crack down on the practice, albeit with limited success. Beyond Kazakhstan, China outright banned mining and trading in 2021, but traders have found ways to evade those restrictions.
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Definitely 👍 New York State imposed a partial ban on crypto mining using carbon-based energy sources in 2022. That ban has since expired, and crypto firms are once again directly undermining pollution goals in the Empire State. As difficult as effective regulation is, it's still worth the effort.
Wholesale adoption of clean, renewable sources and green innovation will help mitigate cryptocurrency's environmental damage in the long term.
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