Unveiling Bitcoin’s Water Consumption with Alex de Vries

by Gigi Singh

December 6, 2023

A look at Alex deVries’ groundbreaking report on Bitcoin’s water consumption

© Aaron M. Sprecher / Greenpeac

Alex de Vries, the researcher behind a groundbreaking report that exposes Bitcoin’s water consumption, spoke with Greenpeace USA to discuss the findings of this hidden ecological cost of Bitcoin mining. De Vries’s research highlights substantial water usage associated with Bitcoin mining. The water consumption of U.S. Bitcoin miners alone could be on par with the average annual water consumption of approximately 300,000 U.S. households, equivalent to that of a city like Washington, DC.

With climate disasters plaguing the planet, including drought and scarcity of clean drinking water, consuming water at this scale for the “number-guessing game” that powers the Bitcoin network puts additional strain on a precious resource. De Vries’s research indicates that Bitcoin’s water consumption will soon rival that of the entire traditional financial system. Paired with its contribution to global carbon emissions, Bitcoin as it functions today threatens our progress on addressing the climate crisis and averting its worst consequences. 

This report should prompt additional discussion on how Bitcoin is impacting the climate and endangering access to water. As evidence mounts of the Bitcoin mining industry’s current and potential future role in exacerbating the climate crisis, it is imperative for users of Bitcoin, industry leaders, policymakers, financial institutions, and the global community to develop a solution to the technology’s carbon emissions and resource consumption problem.  Our campaign is urging the financial institutions driving Bitcoin’s value growth to acknowledge the impacts of their direct investments in dirty mining and accept responsibility in the development and implementation of solutions. 

 

Greenpeace USA: What led you to research Bitcoin’s water footprint?

Alex de Vries: This dimension of Bitcoin mining has been under examined for years, but as climate change is worsening and water scarcity is becoming an increasingly pressing issue around the world, it also becomes more important to be aware of how much water is used by Bitcoin. Given the work I have previously done with regard to the electricity consumption of Bitcoin mining it’s subsequently only a small step to the water footprint related to electricity consumption. 

Greenpeace USA: How did you conduct your research? 

Alex de Vries: There is a lot of data available on where miners are using electricity and how much electricity they may be using. These inputs were previously used to determine the carbon footprint of Bitcoin mining. The methodologies for doing so are well established. We combine the data on miner locations and their power demand with the carbon intensity of the electricity they are consuming. 

To get to the water footprint of Bitcoin mining, we only have to replace the carbon intensity of electricity with the respective water intensity. It’s worth noting miners also require water for onsite cooling, which has to be added on top of the water from electricity generation. For this part I looked into how regular large scale data centers are performing in areas where miners are located. The latter analysis was only done for the US, where I found that direct water consumption represents 10-20 percent of the total water footprint of Bitcoin mining.

Greenpeace USA: How and why does Bitcoin use so much water?

Alex de Vries: First of all we have to realize that there are millions of Bitcoin mining devices around the world generating 500 quintillion random numbers in what is effectively a massive game of “guess the number” every single second of the day. Only once every 10 minutes one participant guesses correctly and then gets to create the next block for the blockchain, which includes a reward of 6.25 Bitcoins. This process requires vast quantities of electricity, currently more than half a percent of our global electricity consumption is related to Bitcoin mining. 

Given that we also require water for cooling purposes in thermoelectric power generation, plus the fact that water evaporates from the hydroelectric reservoirs, a lot of water is consumed to satisfy the power demand of miners. Of course, mining devices are operating 24/7 and generating a lot of heat in the process, so cooling systems are also required to keep the devices at optimal temperatures. As mentioned before, this onsite cooling is only a limited part of the total water footprint, which is also the case for regular data centers.

Greenpeace USA: What is the scale of Bitcoin’s water consumption?

Alex de Vries: In total it can be estimated that Bitcoin consumed more than 1600 gigaliters (GL) of water in 2021 and is likely consuming more than 2200 GL of water in 2023. To put this into perspective; another recent study quantified that the traditional financial system (i.e., bank notes + bank branches + ATMs + cashless transactions) combined consumes close to 1800 GL of water per year. Bitcoin’s total water footprint therefore could exceed that of the entire traditional financial system. 

We also have to realize that while the traditional financial system handles over 2 trillion cashless transactions per year, Bitcoin is stuck at just 100 million transactions a year. The network is capped at handling a handful of transactions per second; a single block simply cannot fit more data. That means that while an average cashless transaction such as a credit card swipe will only consume about 2.6 milliliters of water, the average per Bitcoin transaction exceeds 16,000 liters. That may be enough water to fill a backyard swimming pool and it’s roughly 6.2 million times more than what we need for a typical cashless transaction.

Greenpeace USA: How much water is used by Bitcoin mining operations in the U.S.? How does this compare to other countries?

Alex de Vries: Bitcoin miners in the US currently consume up to 120 GL of fresh water per year. This is enough to supply 300,000 households. However, Bitcoin miners in the US are not responsible for the largest share of the worldwide network’s water footprint. Kazakhstan is actually the biggest contributor, with miners in the country consuming almost 1,000 GL per year. Even though there are less miners in Kazakhstan than in the US, geographical (climate) conditions significantly increase the local water consumption. This could be a serious cause for concern, as the country is already facing an expected shortfall of about 75 GL of water by the year 2030.

Greenpeace USA: What are the major takeaways you would want readers to have from your new research article about Bitcoin’s water footprint?

Alex de Vries: I’m firstly trying to make people aware of this dimension of Bitcoin mining. I am assuming readers will find that the water footprint of the network is larger than they could have ever imagined. I also hope readers will realize that simply putting more renewables in the Bitcoin network is not a way to make this problem go away. In fact, as renewables include hydroelectric power (the power source with the largest water consumption per kWh generated), this would only make the water footprint worse. 

Greenpeace USA: What could be done to reduce Bitcoin’s water footprint?

Alex de Vries: You could advocate for using wind and solar power specifically to power these operations, while also trying to lower direct water consumption through, for example, immersion cooling. At the same time, using our limited wind and solar supply for Bitcoin mining just means we’ll have to use other power sources to power something else somewhere else. There is a big opportunity cost here if we keep using limited resources for the sole purpose of making useless computations in Bitcoin mining. All of the output (nothing more than random numbers in a massive guessing game) is immediately discarded. 

The best solution would therefore be to get rid of this energy-intensive process altogether, which was already shown to be possible by the second largest cryptocurrency Ethereum. Last year September (2022) Ethereum cut their total power demand by replacing their own mining mechanism with a more sustainable alternative. There is no technical reason why this would not be possible in Bitcoin. Almost all of the electricity consumption, water consumption, carbon emissions and electronic waste generation would simply disappear overnight. There is no better solution than this.

To read the full report click here.

By Gigi Singh

Senior Strategic Communications Specialist.

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