Water Consumption in Bitcoin Transactions
According to a study conducted by Alex de Vries at the VU Amsterdam School of Business and Economics, a single bitcoin transaction consumes approximately 16,000 litres of water. This significant water usage has raised concerns about its potential contribution to exacerbating global droughts.
Factors Contributing to Water Consumption
The majority of water consumption in bitcoin transactions is attributed to electricity production in the mining process, which involves the use of coal, gas, and hydroelectric power stations. Additionally, water is directly used in data centres to cool the hardware utilized by miners.
Comparison with Energy Demands
While the water consumption is a cause for concern, it is overshadowed by the enormous energy demands associated with bitcoin transactions. De Vries emphasizes that the mining process essentially involves generating random numbers without producing anything useful, which significantly contributes to energy consumption.
Challenges in Implementing Changes
Although competing cryptocurrency Ethereum has made changes to drastically reduce its energy use, bitcoin has been resistant to similar modifications due to the decentralized nature of decision-making within the community. De Vries underscores that implementing software changes could substantially mitigate the environmental impact of bitcoin transactions.
Implications for Global Electricity Consumption
De Vries notes that bitcoin accounts for approximately half a per cent of global electricity consumption, highlighting the potential for immediate reduction in carbon emissions, water footprint, and electronic waste if software changes were to be implemented.
