With Great Power Comes Great (Eco) Responsibility – How Blockchain is Bad for the Environment

April 6, 2019 by Kevin Hotchkiss

Blockchain has been hailed as the future of technology. Although innovative, the system revolves around "proof of work," a process that is resource intensive simply for the sake of being resource intensive. How does this technological innovation collide with the international push for sustainable development

In 2015, all member states of the United Nations adopted Sustainable Development Goals that are to be achieved by 2030.[1] Among these goals is goal #7, whose purpose is “to ensure access to affordable, reliable, sustainable and modern energy for all.”[2] While the United States should be gearing up for a shift towards more reliable, sustainable, and clean energy that is compatible with goal #7, blockchain is being hailed as the technology of the future.[3] Although it is a groundbreaking technology, blockchain is a flawed system that consumes an astounding amount of energy – and until this energy consumption issue is fixed, regulators should look into ways to restrict the practice of bitcoin and blockchain mining.

Bitcoin is a cryptocurrency. Blockchain is a distributed ledger technology, and the means used to document and record cryptocurrency transactions.[4] The ledger is maintained by every user in the network, and each member must validate and maintain identical ledgers to protect against fraudulent transactions and to avoid the need for centralized authority.[5] While avoiding a centralized system may be appealing to some, the issue is that the entire system revolves around what miners (participants in a distributed ledger who utilize advanced computer hardware, which requires a lot of power, to solve complicated algorithms) call “proof of work.”[6] Proof of work is “a piece of data which [is] difficult (costly, time-consuming) to produce so as to satisfy certain requirements.”[7] For every bitcoin transaction, hundreds or thousands of miners must participate in obtaining proof of work, which involves solving costly algorithms, using electricity, time, and expensive hardware in order to find a winning nonce. A nonce is simply a string of numbers that, when combined with the data of the transaction, hashes (hashes are a 32 character series of alphanumeric characters that are generated through an algorithm) to a value with the required difficulty.[8] Difficulty for a blockchain transaction is a hash value with a certain numbers of a certain characters at the front of the hash, say 0’s, a hash with difficulty 7 would look like this: 0000000731fc30c8cdf220028eeab863, because it has 7 zeros in front of the hash value. This hash would be a winning nonce, but finding it requires the processing of millions of numbers (nonces) to find which nonce “wins.” The miner who finds the winning nonce is typically awarded a set amount in the currency they’re mining, thus incentivizing people to mine coins.[9]

However, technology that revolves around proof of work and power consumption, which is “intentionally designed to be resource-intensive and difficult[,]”[10] is not in line with the United Nation’s sustainable development goals. Furthermore, most of the mining facilities in the Bitcoin network are located in China, a nation that relies heavily on the use of coal power.[11] In 2017, Bitcoin mining facilities in China alone consumed 111 megawatts of power. It is estimated that there is a carbon intensity of 711 gCO2eq per kWh (grams of carbon dioxide equivalent per kilowatt-hour of electricity generated) in this region, so China generated over 78 million grams of CO2 mining bitcoin in 2017 alone. When compared to other payment systems, this number is astounding. While one bitcoin transaction requires roughly 509 kilowatt hours, 100,000 VISA transactions require only 151 kilowatt hours.[12] Accordingly, Bitcoin requires several thousand times more energy than traditional payment processing services, and when faced with issues like climate change and goals such as the U.N.’s sustainable development goals, a system like blockchain that requires proof-of-work should be abandoned.

While much of the carbon footprint from blockchain relies on the source of the electricity used (e.g. coal is higher carbon than nuclear), regulators should take aim at bitcoin miners. Bitcoin, along with other cryptocurrencies do not fulfill any large societal needs, and the energy requirements are too staggering to let this trend continue. Though there is likely some use for blockchain in the future and the technology surely should exist, consuming resources for the sake of consuming resources is a trend that we, as a nation and global community, should try to avoid. Bitcoin requires work for the sake of work, resource consumption for the sake of consumption, and until this process becomes more efficient, it should be stopped.


[1] U.N., Transforming our world: the 2030 Agenda for Sustainable Development, ¶ 3, U.N. Doc. A/RES/70/1 (Sep. 25, 2015).
[2] Id.
[3] Nathan Reiff, Forget Bitcoin, Blockchain is the Future, Investopedia, (May 27, 2018), https://www.investopedia.com/tech/forget-bitcoin-blockchain-future/
[4] Id.
[5] Id.
[6] Bitcoin Mining Team, Everything you need to know about Bitcoin Mining, https://www.bitcoinmining.com/
[7] Id.
[8] Jake Frankenfield, Nonce, INVESTOPEDIA, (Oct. 23, 2017), https://www.investopedia.com/terms/n/nonce.asp
[9] Id.
[10] BITCOINMINING, https://www.bitcoinmining.com/
[11] Bitcoin Energy Consumption Index, DIGICONOMIST, (N.D.), https://digiconomist.net/bitcoin-energy-consumption
[12] Id.