Professor Andrew Urquhart is Professor of Finance and Monetary Expertise and Head of the Division of Finance at Birmingham Enterprise College (BBS).
That is the ninth installment of the Professor Coin column, during which I deliver essential insights from printed tutorial literature on cryptocurrencies to the Decrypt readership. On this article, I focus on Bitcoin power utilization, and the longer term for sustainable cryptos.
Whenever you hear the phrases “Bitcoin mining,” you may image large warehouses filled with whirring computer systems, gobbling up electrical energy like there’s no tomorrow. That picture isn’t removed from actuality.
Since Bitcoin launched in 2009, its proof-of-work (PoW) system has been each its best power and its largest controversy. It retains the community safe and decentralized, nevertheless it additionally ties digital finance to very actual power and environmental prices.
How massive is Bitcoin’s power footprint?
The go-to benchmark is the Cambridge Bitcoin Electrical energy Consumption Index (CBECI), which estimates that Bitcoin mining consumes electrical energy on the dimensions of mid-sized international locations. However right here’s the catch: Bitcoin’s power use doesn’t rise easily. As a substitute, it follows market cycles. When Bitcoin’s value surges, miners swap on extra rigs, pushing up hashrate, issue, and electrical energy demand. When costs dip, older or much less environment friendly machines go darkish.
Stoll, Klaaßen and Gallersdörfer (2019) pegged annual consumption round 46 TWh again then, with ~22 megatons of CO₂ emissions Extra lately, new knowledge means that consumption has grown considerably.
In line with the 2025 Cambridge Digital Mining Trade Report, Bitcoin’s annual electrical energy utilization is now estimated at 138 TWh, with network-wide emissions of roughly 39.8 Mt CO₂e. The identical report additionally notes that 52.4 % of the power utilized by miners comes from sustainable sources (renewables + nuclear) as of 2025.
These up to date figures assist us see that whereas Bitcoin’s environmental footprint stays important, the composition of its power combine can also be shifting—providing a extra nuanced narrative for 2025.
Past carbon: the complete footprint
New analysis asks a broader query: what’s the full environmental price? A 2023 paper by Chamanara et al. (2023) estimates Bitcoin mining at ~173 TWh, including in CO₂, water, and land impacts.
In the meantime, the UN College warned that mining attracts closely on freshwater in areas with scarce provide. And it’s not simply the operating of machines: de Vries (2021) estimated tens of kilotons of e-waste yearly from discarded ASIC rigs, since miners churn by way of {hardware} each couple of years. This holistic image means Bitcoin’s footprint is now seen as multi-dimensional: electrical energy, emissions, water, land, and waste.
Proof-of-work vs Proof-of-stake
Right here’s the place the story will get attention-grabbing. Not each blockchain guzzles power like Bitcoin. In September 2022, Ethereum’s Merge changed PoW with proof-of-stake (PoS). In a single day, its power use dropped by ~99.9%. Identical consumer expertise, radically totally different environmental profile. This one transfer confirmed the world that crypto doesn’t must be a local weather villain.
Ethereum’s success has raised uncomfortable questions for Bitcoin. If one other main chain can ship safety and performance with out the identical power burn, ought to Bitcoin observe?
Purists say no: PoW is what provides Bitcoin its incorruptible, apolitical safety. Critics counter that clinging to PoW dangers political backlash, carbon taxes, and even outright bans in sure jurisdictions.
Can mining go inexperienced?
Not all miners are environmental dangerous actors. Some argue they’re a part of the answer, not the issue. In Texas, mining farms strike offers with grid operators, curbing energy when demand spikes. In Iceland and Canada, miners plug into low cost hydropower. Current engineering analysis even explores utilizing mining to monetize extra methane from landfills or stranded renewables that might in any other case be wasted.
The optimistic narrative goes like this: Bitcoin mining might act as a “purchaser of final resort” for surplus inexperienced power, smoothing out variability in photo voltaic and wind manufacturing. Research like Hossain & Steigner (2024) and others counsel that, beneath the proper circumstances, mining might turn out to be an financial driver for renewable initiatives.
However the jury continues to be out—whether or not miners really speed up the inexperienced transition or simply opportunistically chase low cost energy is dependent upon location, incentives, and regulation.
The street forward
So the place does that depart us in 2025? Listed here are the massive takeaways:
- Bitcoin’s footprint is actual and important. We’re not simply speaking electrical energy, but in addition carbon, water, land, and e-waste.
- Design issues. Ethereum’s Merge proved that PoS can slash power prices with out breaking a community. Bitcoin, against this, has doubled down on PoW.
- Nuance is required. Not all mining is equal—coal-based rigs in Kazakhstan are very totally different from hydro-powered farms in Quebec.
- Coverage stress is rising. Anticipate governments to ask not simply “how a lot energy?” however “what sort of energy, the place, and with what externalities?”
Bitcoin will at all times carry the power query with it. Whether or not it turns into a local weather villain or an unlikely inexperienced ally is dependent upon selections made by miners, policymakers, and communities within the subsequent few years.
For now, one reality is evident: in crypto, the invisible isn’t weightless. The way forward for digital cash is tied, fairly actually, to the facility grid.
References
- Cambridge Centre for Different Finance, 2025. Cambridge Digital Mining Trade Report 2025. Cambridge Choose Enterprise College.
- Chamanara, N., Pereira, A.O., Dsouza, C., Pauliuk, S. and Hertwich, E.G., 2023. The environmental footprint of bitcoin mining throughout the globe. Earth’s Future, 11(11), e2023EF003871.
- de Vries, A., 2021. Bitcoin growth: What rising costs imply for the community’s power consumption. Joule, 5(3), pp.509–513
- Stoll, C., Klaaßen, L. and Gallersdörfer, U., 2019. The carbon footprint of bitcoin. Joule, 3(7), pp.1647–1661.
- Hossain, M. & Steigner, T., 2024. Balancing Innovation and Sustainability: Addressing the Environmental Influence of Bitcoin Mining. 10.48550/arXiv.2411.08908.
- de Vries-Gao, A. & Stoll, C., 2021. Bitcoin’s rising e-waste drawback. Assets Conservation and Recycling, 175. 105901. 10.1016/j.resconrec.2021.105901.
