The Environmental Impacts of Cryptomining – Earthjustice

A new guidebook "The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now" from Earthjustice and Sierra Club, is the first to comprehensively document the explosive growth of cryptocurrency mining in the United States and examine how this industry is impacting utilities, energy systems, emissions, communities and ratepayers.

Cryptocurrency mining is an extremely energy-intensive process that threatens the ability of governments across the globe to reduce our dependence on climate-warming fossil fuels.

If we do not take action to limit this growing industry now, we will not meet the goals set forth by the Paris Agreement and the Intergovernmental Panel on Climate Change to limit warning to 2C.

This guidebook discusses several such examples where fossil-fueled cryptocurrency mining has increased local air, water, and noise pollution, increased costs on others, and increased climate pollution at a time when we should be doing everything in our power to move in the opposition direction to mitigate the worst impacts of the climate crisis.

After cryptocurrency mining was banned in China in 2020, the amount of mining operations exploded in the United States.

In the year prior to July 2022, Bitcoin consumed an estimated 36 billion kilowatt-hours (kWh) of electricity, as much as all of the electricity consumed in Maine, New Hampshire, Vermont, and Rhode Island put together in that same time period.

The past two years have demonstrated that the industry preferentially seeks readily-available energy and minimal regulation, re-starting defunct coal and gas plants, flooding the restructured electricity market in Texas, and tapping into power grids where regulators have little oversight.

This explosive growth strains energy grids, raises retail electricity rates, and increases total carbon emissions and local air pollution.

The design of proof-of-work cryptocurrency mining incentivizes miners to ramp up operations as quickly as possible, often irrespective of the source of energy.

Indeed, big mining operations have shown a willingness to invest in otherwise uneconomic power sources, like defunct coal plants or low-capacity gas plants, as long as that electricity can be made available quickly. Unlike other large electricity users, cryptocurrency mining operations have a short time horizon, and most have shown little interest in investing in new clean energy.

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The Environmental Impacts of Cryptomining - Earthjustice