I was sitting in my kitchen last Tuesday morning, sipping coffee from my favorite chipped mug (the one with the faded “Compost Happens” slogan), when my phone pinged with a message from my brother Tom. “Sis, I’m thinking of investing in Bitcoin. Good for the planet or not? Don’t lecture me for 17 paragraphs please.”
Oh, Tom. Always cutting to the chase.
I nearly spat out my coffee. My brother—the same person who once bought a diesel SUV “because it sounds cool” and needed a two-hour sustainability intervention from yours truly—was asking me about cryptocurrency. The irony wasn’t lost on me. But his question was fair. And complex. And honestly, something I’ve been wrestling with myself for ages.
So I did what any annoying environmentalist sister would do. I ignored his “don’t lecture me” request completely and sent him seven consecutive voice messages totaling 19 minutes and 32 seconds. (Sorry not sorry, Tom).
But the question deserves a proper answer beyond my brother’s patience threshold. Because the truth about cryptocurrencies and their environmental impact is… well, it’s messy. And nuanced. And probably not what you think.
Let’s start with the elephant in the room—Bitcoin’s energy consumption. It’s staggering. Truly mind-boggling. The last time I checked, Bitcoin alone was consuming more electricity annually than the entire country of Norway. NORWAY! A whole country! And that was a conservative estimate. Some researchers put it closer to Argentina or even the Netherlands. Just one cryptocurrency using more power than nations with millions of people. When I first learned this, I was properly horrified.
The culprit behind this energy nightmare is something called proof-of-work—the consensus mechanism that Bitcoin and some other cryptocurrencies use to validate transactions and mint new coins. For the non-tech folks reading this (like my mum, who still calls Bitcoin “those internet money things”), proof-of-work essentially forces computers to solve really complex mathematical puzzles that serve absolutely no purpose except to prove they’ve done work. It’s like having thousands of cars racing their engines at full throttle 24/7, burning fuel not to go anywhere, but just to prove they can burn fuel. Maddening, right?
I had a proper crisis about this back in 2018. I’d been invited to speak at a climate conference in Helsinki, and during the networking dinner, I found myself sitting next to a blockchain developer. I launched into my standard cryptocurrency rant (I had opinions, okay?) and expected the usual defensive pushback. Instead, he nodded along and then calmly said, “You’re absolutely right about Bitcoin. It’s an environmental disaster. But blockchain doesn’t have to be.”
That conversation changed everything for me. Turns out, not all cryptocurrencies are created equal when it comes to environmental impact. That’s when I learned about proof-of-stake—a different consensus mechanism that doesn’t require all that computational muscle-flexing. Instead of computers racing to solve meaningless puzzles, proof-of-stake selects validators based on how many coins they’re willing to “stake” as collateral. It’s like the difference between holding a heavyweight lifting competition to decide who gets to be the bouncer (proof-of-work) versus simply checking who already has the muscle and asking them to put their reputation on the line (proof-of-stake).
The energy savings? Up to 99.95% less. Not a typo. We’re talking about cutting energy use to a tiny fraction. When Ethereum—the second-largest cryptocurrency—finally completed its transition from proof-of-work to proof-of-stake (called “The Merge”) in 2022, I actually stayed up until 3 AM watching the live stream like it was New Year’s Eve. My flatmate Kate thought I’d completely lost the plot, standing in our living room at 3:14 AM, cheering at my laptop while wearing pyjamas with whales on them. But honestly, it was a massive moment for sustainable blockchain technology.
Of course, Bitcoin—the biggest energy hog of them all—shows no signs of switching to proof-of-stake. The Bitcoin community has this almost religious attachment to proof-of-work, arguing it’s more secure and decentralized. And to be fair, they’re not entirely wrong on the security front (I’ve had enough debates with crypto bros at tech conferences to concede this point). But the environmental cost is just too high for any potential benefits, at least in my view.
So does that mean Bitcoin is irredeemable from an environmental perspective? Well… it’s complicated.
Some Bitcoin advocates argue that mining operations can actually accelerate renewable energy adoption. Their logic goes something like this: Bitcoin miners want the cheapest possible energy to maximize profits. Renewables are becoming the cheapest energy source in many regions. Therefore, Bitcoin mining will increasingly use renewable energy and might even help fund new renewable projects that benefit the wider grid.
There’s some truth to this. I visited a Bitcoin mining operation in Iceland last year for a piece I was writing. They were powered entirely by geothermal and hydroelectric energy—clean, renewable sources that Iceland has in abundance. The facility was impressively efficient, using the natural cold climate to reduce cooling costs and even capturing excess heat to warm nearby greenhouses. The operators proudly told me their carbon footprint was minimal.
But here’s the problem with that argument: energy is a zero-sum game. Even if that mining operation is using renewable energy, it’s still consuming massive amounts of electricity that could be used for something, you know, actually useful to society. Every kilowatt-hour going to Bitcoin is one not going to homes, hospitals, schools, or businesses. Or even to replacing fossil fuels elsewhere. In regions with limited renewable capacity, Bitcoin mining can force the grid to fall back on coal or natural gas to meet demand.
I had this realization while standing in that pristine Icelandic mining facility. It was clean, yes. But was it necessary? Was solving arbitrary math problems the best use of all that renewable energy? I couldn’t help but think of my visit to a refugee camp in Jordan the year before, where families were desperate for reliable electricity for basic needs. The contrast was… well, it was a lot to process.
But wait—there’s another wrinkle to this debate. What about the environmental impact of our traditional financial system? All those banks with their massive buildings, ATMs running 24/7, data centers processing credit card transactions, employees commuting to work… surely that has a carbon footprint too?
It absolutely does. And Bitcoin advocates love to point this out. But when researchers actually run the numbers, traditional banking still comes out ahead in terms of energy efficiency per transaction. Like, way ahead. One Bitcoin transaction can consume as much energy as hundreds of thousands of Visa transactions. The comparison isn’t even close.
So where does that leave us? Are cryptocurrencies an environmental villain or potential hero?
The truth is somewhere in the messy middle. The technology is still evolving, and the environmental impact varies enormously depending on the specific cryptocurrency and how it’s implemented.
For environmentally-conscious folks interested in crypto, here’s what I’d suggest (and what I eventually told my brother after he stopped listening to my voice messages and just texted “ELIZA JUST TELL ME WHAT TO DO”):
First, consider alternatives to Bitcoin. Ethereum post-Merge, Cardano, Polkadot, and other proof-of-stake networks have a tiny fraction of the environmental impact. They’re not perfect—no technology is—but they’re drastically better.
Second, if you’re dead set on Bitcoin, consider offsets. I know, I know—carbon offsets are complicated and sometimes problematic (I’ve written entire articles about their limitations). But if used carefully and combined with other measures, they can help mitigate some of the damage.
Third, support initiatives pushing for cleaner cryptocurrency mining. Organizations like the Crypto Climate Accord are working to decarbonize the cryptocurrency industry. Their goal is 100% renewable-powered blockchains by 2025. Ambitious? Yes. But the pressure helps.
Fourth, advocate for policy changes. Regulations that require transparency about energy consumption or incentivize cleaner mining could make a huge difference. New York has already passed a moratorium on certain types of cryptocurrency mining operations, and other regions are considering similar measures.
And maybe most importantly, pressure Bitcoin to consider alternatives to its energy-guzzling proof-of-work system. Yes, the Bitcoin community is notoriously resistant to change—I’ve been in enough heated Twitter debates to know this firsthand—but continued pressure and evolving technology might eventually lead to improvements.
The cryptocurrency world moves amazingly fast. Just a few years ago, proof-of-stake was considered experimental and unproven. Now it’s mainstream. Who knows what innovations might reduce environmental impact further in the coming years?
For what it’s worth, Tom ended up investing a small amount in Ethereum and completely ignored my carefully crafted advice about offsets and advocacy. Classic Tom. But he did send me a text last week asking if his new apartment would be suitable for a balcony compost bin, so I’ll count that as progress.
In the meantime, I’m cautiously optimistic about the potential for greener cryptocurrencies, even as I remain deeply skeptical about the environmental sustainability of Bitcoin as it currently exists. Like so many things in the sustainability space, it’s not a simple good/bad binary but a complex system with both problems and possibilities.
Just please don’t get me started on NFTs. That’s a whole other environmental rabbit hole, and I’ve kept my poor brother on the phone for three hours about that one already.
