Can Crypto Mining Degenerate Communities?

Can crypto mining degenerate susceptible communities? Crypto mining surely does provide huge returns to the miners but it also comes at a cost and this impacts the most susceptible communities and the poorest people of the world the most.

It is due to the disproportionate effects crypto is having on those who are most vulnerable.

It is primarily because the already critical climatic condition is made worse due to crypto mining, according to the experts.

This is why the crypto world is trying hard to find an alternative and a more productive way to make this industry more sustainable.

The industry experts fear that the mass adoption of crypto, which is already showing its sign, will result in the escalation of the current climate crisis if things are left as they are.

It is for this reason they believe that it is high time that they engage in conversation regarding such an impact and try to find a proper and effective solution immediately.

Mitigating the impact of crypto on the environment is the only way which will make the crypto industry more sustainable.

This is one thing that is of utmost importance as of now.

The effect of crypto mining is not only affecting the susceptible communities and the environment but is also aggravating the social challenges especially for those people who are already experiencing multifarious proportions of deprivation, according to research.

It is all due to the digital infrastructure of crypto, especially Bitcoin, the most popular crypto coin.

It needs a lot of energy to mine Bitcoin, typically amounting to the total energy consumed by the whole of Thailand, and the major portion of this energy comes from burning fossil fuels.

Can Crypto Mining Degenerate Susceptible Communities?

Can Crypto Mining Degenerate Susceptible Communities

The huge amount of fossil fuels burnt to mine crypto coins results in an equally huge amount of carbon footprint.

As of now, research says, it has reached an all-time high, even exceeding that of the gold mining industry.

With a notable increase in crypto mining activities all over the world of late, this crisis will become even more acute and impact the environment and degenerate the society at large.

Environmental advocates ventilate their concern over this matter and are especially worried about the state of New York and Texas.

These regions have become the new homes of the individual miners and mining companies from all over the world, especially after the ban on crypto mining imposed by China due to enormous energy drain.

This is mainly due to the low cost of energy, the preexisting infrastructure, and encouraging government policies.

But this has affected the communities at large.

Ideally, the United States now has become the largest crypto mining hub of the world contributing more than 35% of the entire hash rate needed to make new and verify Bitcoin transactions.

The locals, as well as the environmentalists, are concerned about their environment and their communities regarding the harm it might cause.

And, they have all the good reasons to be worried to such an extent over crypto mining and transactions, especially Bitcoin, based on the alarming stats.

Typically, recent research has found that Bitcoin mining gives off roughly 90 Megaton of Carbon Dioxide each year, and it is growing every year.

You will get an idea of the intensification of carbon footprint when you know that this figure is up from the figure two years back which was approximately 22 Megaton!

In order to put it in a better and greater perspective it can be said that a single Bitcoin transaction normally consumes as much as the total energy consumed by a single household in the United States for two months!

As said earlier, the effect of the entire thing is disproportioned.

Research says that the climate crisis caused by crypto mining affects the poorest people and not the ones who are participating in such activities and others such as Bitcoin speculation largely in the Global North.

Now, you may ask why it is so. Well, before delineating that it is imperative that you know how exactly the entire thing works and why the design of it is so unsustainable.

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Take the Greenidge power plant in Seneca Lake, New York, for example.

This power plant of the 1950’s era has and looks just like it from the outside.

However, at the rear of the facade you will now find about 8,000 extremely high-powered computers operating 24/7 to mine Bitcoin by solving innumerable difficult math problems for the private Bitcoin mining company, Greenidge Generation LLC.

This generates a lot of heat along with the crypto coins.

In order to keep the computers cool the plant takes in hundreds of millions gallons of water and releases an equal amount into the Keuka Outlet.

However, the water empties into the Seneca Lake directly having a temperature that can reach as high as 108 degrees Fahrenheit in summer.

This makes the lake feel like a hot tub. This causes a lot of harm and stress to the bunch of trout and other cold water fishes.

It also results in blooming harmful algae.

In addition to that, it has also affected the grape farming agriculture which is the main occupation of Seneca town.

In fact, the wine industry contributes nearly $3 billion every year to the New York state’s economy.

Now, with Bitcoin mining, the livelihood of the poor locals and grape farmers are in jeopardy due to the increasing electrical costs.

The locals and the environmentalists fear that with more and more companies eyeing for other such coal-fired defunct power plants in New York upstate to make the best use of the financial revolution brought in by Bitcoin will have more serious effects on the flora and fauna.

It will also put the emission-reduction goals of the whole world in danger and harm the global environment.

In order to offset the impact of Bitcoin mining and save the environment it needs planting at least 300 million new trees!

So, the primary idea of cryptocurrency to ‘save’ the world’ by creating a more reliable decentralized financial mechanism has created a centralized and a serious issue – how to save the planet.

It is true that crypto can help people who do not have money to make more of it but eventually and inevitably it will result in a situation like an ‘emperor with no clothes.’

Now, with even the major banks investing in crypto and offering allied services, the environmental footprint would be even more and will surpass the set targets based on the Paris Agreement, according to the report of Nature Climate Change.

Therefore, the negative consequences of Bitcoin mining are affecting those people the most who are least contributing to the reasons of climate changes, and that is most concerning for the environmental justice communities.

Though the mining companies make tall promises on their websites about their concerns regarding carbon footprint and tell how they are trying to offset it, these offsets are characteristically not local.

These offsets can be in any place in the world but it does not help in any way to the direct impacts of crypto mining on the surroundings.

And, environmental impact being hyper local, it should have been mitigated by such offsets.

Weak Design

It is the weak design of Bitcoin mining that makes it so harmful for the environment and unsustainable.

You will need to use the Proof of Work or PoW consensus protocol to mine or create one Bitcoin.

This particular protocol is the main contributor to climate change with the greenhouse gas emissions because the process needs high computing power beyond measure and the blockchain itself needs a huge amount of energy to exist.

The mining process typically involves the following steps:

  • A person makes an investment in Bitcoin
  • The details of it are entered on the blockchain which is a virtual ledger
  • These details of the transaction is verified by a ‘miner’ to prove authenticity and legitimacy of it and
  • If found true, the transaction details are locked into the blockchain to finalize it.

There are only these four major steps but this needs a lot of computing or hash power since it uses the PoW consensus protocol.

This process is not energy efficient because the miners in this process need to race against time and compete with several other miners to be the first one to solve the complex cryptographic math problem and win the reward, often paid in the same coins or transaction fees.

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A lot of trial and error goes into it to generate random numbers rapidly and check each of them to find the right solution to the puzzle.

Therefore, solving the math problem is not a simple and a quick process, and being the first one to win the rewards is more like winning a lottery.

This means that you will need to put in more time, effort, and computing power into it.

The more you put in, the higher will be the chance of winning. And, there is only one way to make this Bitcoin mining venture profitable – use a large number of highly powerful and specialized computers made with most advanced but short-lived hardware.

These powerful systems need to be running and performing at a high level consistently 24/7/365 to look for the best solution to a mathematical puzzle.

This eventually uses a magnanimous amount of energy which has a serious social and environmental impact. It also needs a lot of water to keep the mining equipment cool.

The Effects

All these result in water waste and e-waste, both of which are more often than not disposed of in developing countries and are dangerous for the surroundings.

The solid, liquid, and gas emissions due to Bitcoin mining in the form of e-wastes, hot used water, and CO2 respectively exacerbate and degenerate susceptible communities.

These communities usually have one or all of the following:

  • An unstable economic condition
  • Weak or favorable regulations and
  • An easy access to cheap energy along with other resources.

All these results in a higher profitability which the individual miners and mining companies take advantage of and as a result impacts the susceptible and poor communities the most disproportionately.

When cryptocurrencies were invented, China was the most profitable place to mine Bitcoin for its inexpensive electricity and therefore resulted in The Great Mining Migration into that country.

Nearly three-quarters of the entire Bitcoin mining process happened in China and especially in provinces of Sichuan, Inner Mongolia, Xinjiang, and Yunnan since energy there is abundant and cheap.

The situation changed utterly with them banning mining crypto recently and a nationwide crackdown on the mining industry due to their growing concerns over environmental and financial impacts.

As an effect, the miners were compelled to relocate in countries like Russia and Kazakhstan that are politically less stable, and in the United States and Canada where the regulations were favorable.

The main point of concern of the environmentalists is that places like these use less renewable energy, 1% in Kazakhstan for example, or use natural gas to power up the machines such as in Canada.

The main reason behind the miner looking to relocate in the developing countries is that the price of energy is cheapest there because fossil fuels remain the primary source for it.

With their influx, there is a rise in the greenhouse gas emissions in the developing countries which impedes them from accomplishing their Nationally Determined Contributions goals.

In addition to that, this also affects the local communities and surroundings in these areas making them more vulnerable to global warming and its harmful effects.

And, in places where access to renewable energy is comparatively cheaper, such as in the Democratic Republic of Congo where mining operations are said to be ‘cleaner,’ this comes at the cost of the local people.

They take advantage and use renewable energy for domestic purposes without knowing that it is impacting adversely on their opportunity to have a more sustainable future.

The Solution

So, what could be the effective solution to this growing damage caused by Bitcoin mining to the world and the environment, knowing that the allied cost is huge?

According to research, nearly $0.49 out of every $1 of Bitcoin value mined needs to be spent to mitigate climate and health damages, and this was the estimate for 2018!

Therefore, it needs a lot more to do to deal with the environmental issues related to Bitcoin mining.

The good news is that several smaller countries such as Egypt, Bolivia, and Morocco have already put some restrictions on Bitcoin into practice.

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Some of the most favored countries for Bitcoin mining such as Norway are thinking of following the footsteps of Sweden and execute a national crackdown on Bitcoin mining and other related activities.

Countries like these believe that even the European Union should come forward and impose a region-wide ban on Bitcoin mining operations to protect the renewable energy.

However, a simple ban may not be as effective as it should be because, as explained earlier, it may once again result in a mass exodus of the miners from one place to another favored one.

Therefore, something more specific and effective is required that would hinder mining operators from changing place and continuing their mining activities.

A much better solution would be to create a more organized, coordinated, and powerful global plan to ban the Proof of Work protocol itself which consumes a lot of energy and is the primary reason for such adverse impacts on the environment, society, and the communities.

Governments of all countries should enforce a legislation that would incite all miners, if not force them, to blockchain networks that are more sustainable, the Proof of Stake or PoS consensus model for example.

This would make some significant changes and the most vital of all is that it will save a lot of energy during the operation.

This is because, the PoS model would attribute mining power to the miners according to the proportion of coins held by them and not on the number of computations made of which most would be unsuccessful.

This means that there would be no wasted energy on unsuccessful attempts made to solve complex math puzzles by the miners.

The winner, instead, will be decided based on the highest stake or pledge to put forward the number of coins and given the reward.

However, even this model is not devoid of problems. One of the most significant ones is that it would create an income inequality among the crypto mining community.

This is because the approach and results would be very obvious – the miners who are better off and have more computing power, such as the large mining companies, will have a higher chance of winning and getting the rewards.

Nevertheless, the PoS model can offer a huge advantage since it is estimated to cut down on the energy consumption by as much as 99%.

And, shifting from PoW consensus protocol to the PoS consensus mechanism is not difficult or impossible, as it is proved by Ethereum, the second most popular crypto coin after Bitcoin.

However, experts believe that nothing would be possible unless a complete ban on the PoW consensus model is imposed by all the governments of the countries all over the globe.

Of course, there are still a couple of questions that are left unanswered related to ethics, chances of illegal activities, and the most important of all, whether or not crypto should be within the directives of the national bank of a country.

After having said all these, it can be concluded that it may be complicated to understand how Bitcoin and other crypto coins still use the PoW model and cause great harm to the community.

However, it is necessary to continue monitoring the level of impact on the energy sources.

It is also necessary to continue to look for a right, more effective and all-inclusive solution to mitigate, if not reverse, the adverse effects that it creates on the climate as well as on the susceptible communities.


It is very necessary to find a more useful and sustainable production method to reduce the bad effects of Bitcoin mining on the environment and vulnerable communities.

Only this can establish Bitcoin and other crypto coins as reliable currencies.