Many cryptocurrency enthusiasts and investors expect the sector to continue its rapid and strong rise during 2025, after achieving many huge gains during the past year. The password for his success was "Trump", whose victory in the US elections was the most prominent supportive station in the sector's path.
During his presidential campaign, Trump pledged to do a lot to boost this sector in the US, and make the country a global center for cryptocurrencies. In response to the US president’s efforts in this area, the European Central Bank announced a plan to launch a digital Euro, and several other countries launched their own digital currencies, according to Reuters.
The future of cryptocurrencies is now comparable to the “Great Gold Fever” that swept across the continents of the New World in the 19th century. Everyone is rushing to seek wealth, regardless of the hidden environmental aspect of this wealth or the currency market.
Cryptocurrency mining process
First, let's clarify what cryptocurrency mining means, which has environmental impacts. It is the process by which transactions are verified and then added to the public ledger called the "blockchain".
The process of mining digital currencies requires solving complex mathematical equations with the use of specialized computers, but the mining process remains of great importance in order to secure the currency network and resist any manipulation. Mining ensures the validity of transactions that take place on the digital network, and confirms them before issuing new currencies.
Environmental impact
A recent UN study has revealed that cryptocurrency mining could have significant environmental impacts on climate, water and land, as it relies heavily on fossil fuels, resulting in a high carbon footprint, in addition to resource consumption, and large water and land footprints, for which global Bitcoin mining activities are responsible.
UN scientists explain that Bitcoin is the most popular and well-known cryptocurrency, which prompted them to assess its environmental impacts around the world, by evaluating its mining activities in 76 countries over the course of a full year
Carbon Footprint
According to the study results, the global Bitcoin mining network consumed about 173.42 terawatt-hours of electricity during the year. This means that if we assume that Bitcoin represents a country, its energy consumption would rank 27th in the world, ahead of a country like Pakistan, which has a population of more than 230 million people.
The resulting carbon footprint is equivalent to burning 39 billion kilograms of coal or operating 190 natural gas-fired power plants. To offset this footprint, 3.9 billion trees would have to be planted, covering an area equivalent to roughly 7% of the Amazon rainforest.
Water Footprint
Bitcoin's water footprint during this period was equivalent to the amount of water required to fill more than 660,000 Olympic-sized swimming pools, enough to meet the household water needs of more than 300 million people living in rural areas.
Energy Consumption
Bitcoin mining relies heavily on conventional energy sources to generate electricity, with coal the primary energy source, providing about 45% of the energy supply mix for Bitcoin mining in 2021, UN scientists reported.
Hydropower which is a renewable energy source, but has significant impacts on water and the environment. It provides 16% of the energy supply mix, making it the most important renewable energy source in the Bitcoin mining network.
Nuclear power has a significant share of 9%, while clean energy sources such as solar and wind provide only 2% and 5% of the total energy supply mix used for Bitcoin mining, according to the UN study.
The study indicated that the price of Bitcoin is linked to energy consumption in the mining process, and the 400% increase in the price of Bitcoin during 2022 led to a 140% increase in energy consumption in the global Bitcoin mining network.
Top 10 countries
The top 10 Bitcoin mining countries are responsible for 92% to 94% of Bitcoin's total global carbon and water footprint.
These include China, the US, Russia, Malaysia, Kazakhstan, Canada, Germany, Iran, Ireland, and Singapore. In addition to these countries, Sweden, Norway, and the UK represent the largest contributors to Bitcoin's carbon and water footprint worldwide.
The study found that countries with low electricity prices, such as Kazakhstan, where electricity is three times cheaper than in the US, are called “Bitcoin mining heavens,” providing significant financial incentives for mining, which relies heavily on non-renewable energy sources.
Finally, the cryptocurrency sector may offer valuable opportunities and benefits, but it has major environmental impacts that are being ignored. Therefore, UN scientists provide a set of recommendations on potential interventions by governments to monitor and mitigate the environmental impacts of cryptocurrencies. They cite as an example the decline in China’s share of Bitcoin mining from 73% in 2020 to 21% in 2022 due to Chinese government interventions, which reduces the climate and environmental impacts of this upcoming sector strongly.
