In the world of cryptocurrencies, Bitcoin continuously stirs emotions not only because of its value but also due to its environmental impact. Recent research points to surprising water usage in the Bitcoin transaction process, casting new light on the ecological debate surrounding this digital currency.
Bitcoin, the world’s most popular cryptocurrency, has sparked heated discussions for years not only because of its market volatility but also due to its environmental impact. Recent research conducted by Alex De Vries, an analyst from the Dutch National Bank, raises a new, unusual question: how much water does a Bitcoin transaction consume?
De Vries, a known Bitcoin critic, claims that each transaction of this cryptocurrency requires the use of over 16,000 liters of water. Such an amount of water is sufficient to fill a small swimming pool. According to his research, the high water consumption results from the combination of cooling systems used by cryptocurrency miners and the demand for water in the process of generating the energy needed for their operation.
De Vries’ argument echoes his earlier critical findings on the electricity consumption by cryptocurrency mining. His website, Digiconomist, features a compilation of the carbon footprint of each Bitcoin transaction, comparing it to 808,554 Visa transactions or 60,802 hours of watching YouTube.
However, it is worth noting that the methodology for calculating the energy cost during Bitcoin transactions is met with criticism. The Cambridge Centre for Alternative Finance points out that the transaction throughput is independent of the network’s energy consumption. Adding more equipment for mining and thus increasing energy consumption will not affect the number of processed transactions.
In 2017, Digiconomist presented a forecast that Bitcoin would reach global levels of electricity consumption by 2020. However, these predictions turned out to be inaccurate, similar to earlier forecasts about the rise in energy consumption by the internet.
De Vries’ latest research has been criticized by Daniel Batten, the founder of CH4-Capital, a startup aimed at removing methane from the atmosphere. Batten believes that Bitcoin mining could contribute to achieving this goal. In his view, De Vries often presents predictions that turn out to be erroneous. Batten accuses him of merely changing the direction of attack when his previous claims prove false.
The debate on Bitcoin’s impact on the natural environment is complex and multi-dimensional. On one hand, concerns about energy and water consumption are hard to ignore. On the other, Bitcoin and other cryptocurrencies represent an innovative part of the modern financial world. Solving this puzzle requires further research and dialogue between experts from various fields.
Photo by Taiki Ishikawa on Unsplash
