The recent surge in Bitcoin's value past $38,000 has brought not only profit to investors but also heightened concerns over the cryptocurrency's environmental impact. A study published in Cell Reports Sustainability draws attention to the substantial water usage of Bitcoin transactions, which averages 16,000 liters per transaction. This amount is equivalent to filling a garden swimming pool and contributed to a staggering global total of over 1,600 gigalitres in 2021. The environmental ramifications are particularly troubling in water-scarce areas such as Central Asia and the U.S.
Alex de Vries, a researcher examining the cryptocurrency's footprint, projects a more than 40% increase in water consumption if the trend continues, driven by the energy-intensive Proof of Work (PoW) mechanism that underpins Bitcoin mining. This process requires significant computational power, leading to the need for extensive cooling systems for data centers and power plants.
The reliance on renewable energy sources, often touted as a solution, is criticized by de Vries for being insufficient to offset the environmental impact due to their limited availability. Instead, he points to the Proof of Stake (PoS) model, which Ethereum transitioned to in 2022, as a more sustainable alternative. PoS reduces the need for energy-intensive hardware by allowing cryptocurrency holdings to increase the likelihood of validating transactions, a move that has not diminished Ethereum's popularity or functionality.
As the crypto community looks toward the future, particularly around 2040 when Bitcoin mining is expected to end with the mining of the final coin, de Vries warns that miners must pivot away from unsustainable practices. Without adapting their technology, they risk being caught in a losing game against environmental sustainability, a scenario that could have severe implications for the industry's long-term viability.
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