The Real Costs of the Digital Race for Bitcoin

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Some in the industry have pushed back against suggestions that he is directly responsible for any environmental damage.

A May 2022 letter to the Environmental Protection Agency, signed by many large companies, said their operations were free of pollutants. Bitcoin miners have zero emissions, he said. The associated emissions are a function of electricity production.

Nic Carter, a partner at a crypto-focused venture capital firm and prominent bitcoin advocate who told The Times he was the lead author of the letters, said he was playing a language game when he wrote that bitcoin mining has zero emissions. At the time, he said, he felt the industry was being singled out unfairly.

Perhaps the most sincere point is that we were already fully aware of the emissions associated with utilities generating electricity on the grid, he said.

Many academics who study the energy industry have said that Bitcoin mining undoubtedly has significant environmental effects.

They add hundreds of megawatts of new demand when we already face the need to rapidly reduce fossil power, said Jesse Jenkins, a Princeton professor who studies power grid emissions.

If you care about climate change, he added, then that’s a problem.

Flood in America

Bitcoin, conceived in 2008, introduced most of the world to the concept of cryptocurrencies. Instead of trusting banks to track the value of accounts, the system posts transactions to a public ledger called blockchain. Proponents said cutting out middlemen 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 earn with personal computers, but as the value of each bitcoin rose from less than $1,000 in 2017 to over $60,000 in 2021, mining has become more and more an industrial company. (The price has since dropped and, at press time, was around $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 harder. This has created an energy arms race.

The scale of mines can draw gasps from people in the electricity industry. A one-megawatt mine consumes more energy each day than a typical American house in two years. Electricity flowing through a 100-megawatt operation at any given time could power about half of Cleveland’s homes, according to federal data.

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