Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Professor Andrew Urquhart, Head of Finance and Financial Technology at Birmingham Business School, has highlighted the significant and evolving environmental footprint of Bitcoin mining in his latest “Professor Coin” column for Decrypt. The article, updated with 2025 data, estimates Bitcoin’s annual electricity consumption at 138 TWh, alongside substantial carbon emissions, water usage, e-waste, and land impacts, which are collectively driving increased policy scrutiny.
Bitcoin’s Expanding Environmental Footprint
The Cambridge Bitcoin Electricity Consumption Index (CBECI) serves as a key benchmark, indicating that Bitcoin mining demands electricity on a scale comparable to mid-sized nations. Data from the 2025 Cambridge Digital Mining Industry Report places Bitcoin’s annual electricity usage at 138 TWh, with network-wide emissions estimated at 39.8 Mt CO₂e.
However, the report also offers a nuanced view, noting that 52.4% of the energy consumed by miners now originates from sustainable sources, including renewables and nuclear power, as of 2025. This suggests a shifting energy mix within the industry.
Beyond Electricity: The Full Environmental Cost
Recent academic research expands the scope of Bitcoin’s environmental impact beyond mere electricity consumption. A 2023 paper by Chamanara et al. estimated Bitcoin mining’s total energy draw at approximately 173 TWh, incorporating the often-overlooked costs of water, e-waste, and land use.
The UN University has warned about the substantial freshwater demands of mining operations, particularly in water-scarce regions. Furthermore, de Vries (2021) estimated tens of kilotons of e-waste annually from discarded ASIC rigs, as mining hardware typically has a lifespan of only a few years.
Proof-of-Work vs. Proof-of-Stake
The debate over Bitcoin’s energy intensity intensified following Ethereum’s “Merge” in September 2022, which transitioned its consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS). This shift resulted in an approximately 99.9% reduction in Ethereum’s energy consumption.
Ethereum’s success has prompted questions about whether Bitcoin should consider a similar transition. While purists argue that PoW is integral to Bitcoin’s security and decentralization, critics contend that clinging to PoW risks political backlash, carbon taxes, or even outright bans in certain jurisdictions.
The Potential for Green Mining
Not all Bitcoin miners are viewed as environmental detractors. Some advocate that mining can be part of the solution, citing examples of operations in Texas that curtail power during peak demand periods or those in Iceland and Canada that utilize abundant hydropower.
Emerging research also explores the potential for mining to monetize excess methane from landfills or stranded renewable energy that would otherwise go to waste. Proponents suggest that Bitcoin mining could serve as a “buyer of last resort” for surplus green energy, potentially accelerating renewable projects, though the ultimate environmental impact remains a subject of ongoing study and regulatory influence.
Notably, Elon Musk has also weighed in on Bitcoin’s energy demands, having previously criticized its consumption in 2021, but more recently praising its role in the context of an “AI arms race.”
Key Takeaways for 2025
Bitcoin’s environmental footprint is undeniably real and significant, encompassing not just electricity but also carbon, water, land, and e-waste. The fundamental design choice between Proof-of-Work and Proof-of-Stake profoundly impacts a network’s energy profile. Furthermore, the environmental impact of mining is nuanced, varying significantly based on location and energy sources. As policy pressure mounts, governments are increasingly scrutinizing the type of power used for mining, its geographical siting, and associated externalities. The future trajectory of Bitcoin’s environmental role hinges on the collective decisions made by miners, policymakers, and communities in the coming years.
