Is Crypto Bad For The Environment?

Is Crypto Bad For The Environment

Cryptocurrency has been praised for potentially revolutionizing how we interact with the digital world. Still, it has also been criticized for potentially harming the environment. So, is crypto bad for the environment?

It’s not an easy question to answer. Cryptocurrency mining– verifying and adding transactions to the blockchain- requires a lot of energy. This energy typically comes from fossil fuels, which release greenhouse gasses into the atmosphere and contribute to climate change. However, it is possible for cryptocurrency mining to be done in a way that is sustainable and does not harm the environment. For example, crypto miners could use renewable energy sources like solar or wind power.

In this blog post, we will explore the environmental impact of cryptocurrencies and whether they are a force for good or bad.

Cryptocurrency Mining – 3 Types Of Power

Cryptocurrency mining is an energy-intensive process that often relies on fossil fuels, which can harm the environment. However, three types of power are commonly used for crypto mining: renewable energy, sustainable energy, and green energy.

Renewable energy sources, such as solar, wind, or hydropower, are derived from natural resources that can be replenished.

Sustainable energy comes from sources that can be continuously replenished, such as geothermal power.

Green energy is made up primarily of renewables with a small number of other sources. It includes hydropower, nuclear power, and biomass conversion to gas.

All of these sources produce far less CO2 emissions than coal power plants. Green energy is the best way to go when it comes to making sure your cryptocurrency mining doesn’t negatively impact the environment.

How Does Cryptocurrency Mining Impact The Environment?

In cryptocurrency mining, transactions are verified and added to the public ledger, known as the blockchain. To do this, miners must solve complex math problems requiring a lot of computer power. The more popular a cryptocurrency becomes, the more people are mining it, leading to increased electricity consumption and environmental damage.

Some crypto-mining facilities use green energy sources, like solar or wind, to decrease their carbon footprint. We would see a 13 million metric ton increase in greenhouse gas emissions per year if every Bitcoin transaction were validated using fossil fuels instead of green energy sources.

Why Is Cryptocurrency Bad For The Environment?

Environmentalists are concerned about the amount of computer processing power needed to mine cryptocurrency. To mine cryptocurrency, a computer must perform the following tasks:

Computing power used for verification of transactions in exchange for coins: 

ASIC computers, which use a lot of electricity, are now used by miners to create Bitcoins. As Bitcoin competition increased, puzzles became increasingly difficult for normal computers (CPUs) to solve. The proof of work software code is used to validate and secure Bitcoin transactions.

Complex algorithms require large amounts of electricity.

This amount depends on how much computing power you want your device to have and how many devices you want to share it with. The more devices you want to share it with, the more power it will consume.

The average amount of electricity a US household uses in two months is roughly 2,100 kilowatt-hours. As a result of Bitcoin mining, 91 terawatts of power are consumed annually, nearly seven times as much as Google searches. Every year, Finland, Sweden, the Netherlands, and Greece use about the same energy. Several Iranian, Kazakhstan, and Kosovo cities have experienced long blackouts due to power-intensive crypto mining.

Each Bitcoin transaction emits half a ton of carbon dioxide. A study published in Nature Climate Change in 2018 found that using Bitcoin alone could push the planet over the 2-degree Celsius warming threshold in 16 to 22 years. Planting 300 million trees would offset that huge amount of carbon dioxide emissions.

Sources of non-renewable energy like coal: 

Coal is used to generate electricity for bitcoin miners because it produces more heat than other fossil fuels such as natural gas or oil. The heat generated by these machines makes them run faster, thus generating more heat which then requires additional energy too.

The bitcoin industry is often located in nations with heavy fossil fuel dependence, such as Kazakhstan, Iran, and Kosovo, which raises environmental concerns. Using renewable energy or nuclear power to generate electricity has a greater environmental impact than one that is already energy-intensive. Bitcoin miners are reviving polluting coal plants nearing bankruptcy in the US, threatening coal’s partial revival. Fracking gas is another energy source that warms the planet.

Is Crypto Bad For The Environment

What Can We Do to Make Crypto More Environmentally Friendly?

Clean Electricity

Most miners set up their mining farms in Iceland to reduce cryptocurrency mining’s environmental impact. Geothermal energy powers the machines, and Arctic air cools them. Mining has historically been successful in Iceland, Sweden, and Norway due to their abundant geothermal, hydro, and wind energy. 

The Nordic power surplus is decreasing with aluminum smelters, oil rigs, and steelmakers craving renewable power. According to Reuters, many miners are moving to Kazakhstan’s oil-rich region, which doesn’t have renewable resources.

Volcano energy harvesting

According to recent news reports, El Salvador is using volcano power to mine Bitcoin in a new pilot project. The country has about 30 volcanoes, 20 potentially active despite their small size. As a result, the country uses it to mine Bitcoin due to its geothermal energy, a rich power source.

There is a geothermal plant in El Salvador that was built in 1999. It has 16 shafts that are 2,000 to 3,000 feet deep. But the country only uses five turbines to mine Bitcoin and other things.

Green Cryptocurrencies: Investing in them

Investing in environmentally friendly cryptocurrencies would make them more sustainable. Some new crypto coins are incorporating renewable energy into their operations.

Cryptocurrencies that are eco-friendly include:


Cardano is a peer-reviewed cryptocurrency developed by an Ethereum co-founder. Members purchase units of the coin to become members, making it less energy-consuming than other cryptocurrencies such as Bitcoin. By doing so, Cardano can scale without increasing power consumption as demand increases.


Additionally, Steller uses lumen (XLM) to make global payments, making it a very energy-efficient blockchain network. Additionally, the consensus mechanism is faster than either proof of work or proof of stake. A trusted node is needed to complete transactions. Using this network, you can exchange fiat and cryptocurrencies in exchange for money across borders without incurring steep fees.


According to TRG Datacenters, Chia has been designed to be less energy-intensive than other cryptos, making it an ideal example of a sustainable coin. Compared to bitcoin, which uses computer processors for mining, chia uses hard drives – a concept called proof of space – to do its “farming.”

The software will plot chia coins for you as soon as it has been completely downloaded, and the computer will start farming them. Using the software, you can farm chia coins on your laptop or desktop computer once fully installed. Home users can easily farm chia since it doesn’t require as much power as crypto mining.

While chia claims to be eco-friendly, some critics dismiss it as not eco-friendly due to the growing demand for computer hardware and e-waste.


This cryptocurrency does not require mining because it uses a blockchain lattice concept. This network has been around since 2015 and is an energy-efficient cryptocurrency. Transactions in this network are verified through Open Representative Voting (ORV), which elects representatives. As a result, users can save energy and time by utilizing their blockchains instead of the main network blockchain.

Hedera Hashgraph:

A cryptocurrency like Hedera Hashgraph is next. It could go head-to-head with payment processors like Visa. With its faster transaction time and low energy consumption, it is faster than Bitcoin. Transactions are processed in parallel instead of linearly.

Hedera claims to process more than 100,000 transactions per second and build energy tracking software with its network.


Polygon has also commissioned the Crypto Carbon Ratings Institute (CCRI) to audit its carbon footprint. Polygon’s sustainability pledge comes ahead of Ethereum’s transition to a Proof-of-Stake consensus mechanism, which will reduce the network’s energy consumption by almost 99 percent in total.

With the recent Matic & Disney partnership, I do see Polygon going even more mainstream especially because of its environment-friendly setup from day 1.

Is It Bad For The Environment To Use NFTs?

In digital art and virtual property, virtual tokens, such as NFTs, are based on blockchain technology and can be used to prove ownership and ownership rights to digital assets.

NFTs, or non-fungible tokens primarily using the Ethereum blockchain, consume a large amount of power. In one hour, selling artwork on Ethereum produces the equivalent carbon footprint of flying one hour, according to research.

Do NFTs Impact the Environment?

Yes: CO2 is released by NFTs. A significant amount of computing power is required to mint unique digital assets and sell them in the crypto space, which leads to the emission of greenhouse gasses. People often consider NFTs environmentally harmful since they emit more carbon dioxide than those that use proof-of-stake consensus.

But again here we also have several solutions like immutable or solutions like Polygon.

How To Calculate NFT Impact on CO2 Emission?

There is no definite method for calculating CO2 emissions. Since many steps in the minting process do not have a known carbon footprint, it is difficult to pinpoint the amount of energy released during the minting process. In addition, there are varying views on the amount of energy released during the production of NFTs.

According to Digiconomist, Ethereum transactions have a carbon footprint of 33.4 kilograms, while Memo Akten estimates the carbon footprint of an NFT transaction at 48 kilograms. (Editor’s note: An NFT is counted as a new transaction every time it is minted or sold.)

More than 2.4% of global CO2 emissions are caused by the airline industry, which also contributes 5% to global warming. According to British broadcaster BBC, each person on a round-trip flight from London to San Francisco emits more than twice as much carbon equivalent (CO2e) as a family’s car.

What Can We Do To Make NFTs More Environmentally Friendly?

While purchasing and selling NFTs, you can help the environment by opting for cleaner technologies. Keep these criteria in mind.

Proof of Stake (PoS) Instead of Proof of Work (PoW)

The PoS algorithm allows validators to verify legitimate transactions without solving complex mathematical puzzles. Choose blockchain networks with the PoS algorithm over the PoW algorithm. Validators stake coins in this algorithm to validate blocks and protect transactions, and these coins act as collateral for validation.

Blockchain algorithms reward validators based on their stake amount with network transaction fees upon payment. Compared to PoW, PoS uses less processing power, resulting in lower carbon emissions.

Reducing the Total Number of Transactions

The number of transactions that must take place on a blockchain can also be reduced to make NFTs more sustainable. Not every transaction must take place on the same blockchain. You can then use a batch process to transfer NFT auctions from Layer 2 off-chain to the blockchain.

Lazy Minting

It is common for creators to mint artworks before they put them up for sale on marketplaces. Lazy minting ensures that an NFT uses energy only when it is needed for minting, but this may not sell, which consumes energy. It uses energy only when it is necessary to mint an asset.

Cryptocurrencies with eco-friendliness

Due to growing concerns, new initiatives are constantly being launched to reduce the amount of energy used in cryptocurrency mining. As part of these initiatives, TRG Datacenters predicts that new, more sustainable cryptocurrencies will emerge, and existing ones will undergo significant changes, including renewable energy, energy-efficient protocols, and carbon footprint offsets.

According to the company, Nano, IOTA, Stellar, Matic, and Chia are pioneers in eco-friendly cryptocurrency, as they are committed to reducing environmental impact. According to the Crypto Climate Accord, Cryptocurrency electricity consumption is expected to be net zero by 2030.


We are stepping into a more environment-friendly world of cryptocurrencies especially with recent talks, discussions and hate because of this topic.

There are also many environment-focused crypto projects or nearly carbon-neutral blockchains already.

But even the SWIFT system to transfer FIAT Bank transfers does waste more energy than cryptocurrency and is so even less environment friendly.

We will be happy to hear your thoughts

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