Tech
Every Bitcoin payment “uses a pool of water”
- By Chris Vallance
- Technology reporter, BBC News
November 29, 2023
Image source, Getty Images
Each Bitcoin transaction uses, on average, enough water to fill “a backyard swimming pool,” a new study suggests.
That’s about six million times more than is used in a typical credit card, calculates Alex de Vries of Vrije Universiteit Amsterdam.
The figure is due to the water used to power and cool millions of computers around the world that Bitcoin relies on.
This comes as many regions struggle with freshwater shortages.
Up to three billion people worldwide already suffer from water scarcity, a situation that is expected to worsen in the coming decades, the study notes.
“This is happening in Central Asia, but it’s also happening in the United States, especially around California. And it’s only going to get worse as climate change gets worse,” de Vries told the BBC.
In total, bitcoin consumed nearly 1,600 billion liters – also known as gigalitres (GL) – of water in 2021, suggests the study, published in the journal Cell Reports Sustainability.
It is said that the 2023 figure could be higher than 2,200 GL.
Thirsty work
The main reason why Bitcoin uses so much water is because it relies on a huge amount of computing power, which in turn requires huge amounts of electricity.
The water is used to cool the gas and coal plants that provide much of our energy. And large quantities of water are lost to evaporation from reservoirs that feed hydroelectric plants.
Some of the water is also used to cool the millions of computers around the world that Bitcoin transactions rely on.
De Vries argues that Bitcoin doesn’t need to use that much water, pinpointing the power-hungry process at its core, known as “Bitcoin mining.”
In simple terms, miners control transactions in exchange for the opportunity to acquire digital currency.
But they compete with each other to complete the audit first, which means the same transaction is processed multiple times, by multiple powerful, power-hungry computers.
“There are millions of devices around the world, constantly competing with each other in a huge game that I like to describe as ‘guess the number,'” de Vries told the BBC.
“All these machines combined generate 500 quintillion guesses every second of the day, continuously, that’s 500 with 18 zeros behind them.”
This method is known as “proof of work”. But a change in the way Bitcoin works could dramatically reduce electricity consumption and therefore water consumption.
Leading cryptocurrency Ethereum did so in September 2022, switching to a system called “proof of stake,” reducing its energy consumption by more than 99% in the process.
However, according to Professor James Davenport, of the University of Bath, this may not be simple.
“[It was] only possible because the management of Ethereum is significantly more centralized than that of Bitcoin,” he told the BBC.
However, others argue that the findings of this research are worrying.
Dr Larisa Yarovaya, associate professor of finance at the University of Southampton, said the use of fresh water for Bitcoin mining, particularly in regions already struggling with water scarcity, “should be a reason of concern among regulators and the public.”