The Real Costs of the Digital Race for Bitcoin
Some in the industry have pushed back against suggestions that it is directly responsible for any environmental damage.
A May 2022 letter to the Environmental Protection Agency, signed by many of the largest companies, said their operations “released” no pollutants. “Bitcoin miners have no emissions whatsoever,” it said. “Associated emissions are a function of electricity production.”
Nic Carter, a partner in a crypto-focused venture capital firm and a prominent Bitcoin advocate who told The Times he was the letter’s lead author said he was playing a “language game” when he wrote that Bitcoin mining has no emissions. At the time, he said, he felt the industry was unfairly singled out.
“Perhaps the more honest point is that we are already fully aware of the emissions associated with utilities that generate grid power,” he said.
Many academics who study the energy industry said that Bitcoin mining undoubtedly had significant environmental effects.
“They’re adding hundreds of megawatts of new demand when we’re already facing the need to rapidly cut fossil power,” said Jesse Jenkins, a Princeton professor who studies emissions from electric grids.
“If you care about climate change,” he added, “then it’s a problem.”
Flood into America
Conceived in 2008, Bitcoin introduced most of the world to the concept of cryptocurrencies. Instead of relying on banks to track the value of accounts, the system publishes transactions on a public ledger called a blockchain. Advocates said cutting out the middleman would free people from financial institutions, government oversight and fees.
So-called mining is a fundamental part of the system: when a computer guesses correctly, it updates the ledger and collects six and a quarter new Bitcoins. Then the guessing game begins again.
Initially, hobbyists could win with personal computers, but as the value of each Bitcoin rose – from under $1,000 in 2017 to over $60,000 in 2021 – mining increasingly became an industrial endeavor. (The price has since dropped and at publication was about $28,000.)
The only way for miners to improve their odds is to add computing power, which requires more electricity. But as the number of guesses increases, the algorithm makes the game more difficult. This has created an energy arms race.
The mine’s scale can draw gasps from people in the power industry. A one-megawatt mine uses more energy each day than a typical American home does in two years. The electricity flowing through a 100-megawatt operation at any given time can power about half the homes in Cleveland, according to federal data.
