Buying or selling bitcoin uses 16,000 litres of clean water for every single transaction, which could exacerbate existing droughts around the world. While the energy consumption and carbon emissions produced by bitcoin and other cryptocurrencies have been well studied, this is the first assessment of its water use and wider environmental impact.
Alex de Vries at the VU Amsterdam School of Business and Economics in the Netherlands has calculated that mining – the computational process that secures the bitcoin network – uses between 8.6 and 35.1 billion litres of water per year in the US alone. He says that bitcoin used 1.6 trillion litres of water globally in 2021, and expects this to rise to 2.3 trillion litres this year. Broken down per transaction, that means a single bitcoin trade consumes 16,000 litres of water – enough to fill a small swimming pool. This is “increasingly hard to defend”, says de Vries.
The majority of the water consumption comes from electricity production, such as in coal and gas plants, or throughput in hydroelectric power stations, says de Vries. He used data on the electricity mix at locations where bitcoin mining occurs to calculate the totals, but also factored in that water is also used directly in data centres to cool the powerful hardware used by miners.
While bitcoin’s water consumption is a huge environmental problem, it pales in comparison with its energy demands, says de Vries. “The mining devices are effectively just generating random numbers all day long, and they just throw them all away and nothing – nothing – useful comes out,” he says.
And while competing cryptocurrency Ethereum has introduced changes which slashed its energy use by 99.99 per cent, which would also reduce water consumption, bitcoin has been reluctant to follow suit – which is partly due to a lack of centralised control to push such decisions through.
“The software solution is available. It’s just that you are dealing with a community that is fundamentally against any type of changes to their software,” says de Vries. “If you make the change you cut the majority of everything: the carbon emissions, water footprint, electronic waste, it all goes out the window overnight. Literally, the moment you make the software change, it’s all gone. Bitcoin is responsible for half a per cent of global electricity consumption, [and] we could cut this by tomorrow.”