Professor Andrew Urquhart He is Professor of Finance and Financial Technology and Head of Finance at Birmingham Business School (BBS).
This is the ninth installment of the Coin Professor column, which brings important insights to society from the published academic literature on cryptocurrencies. decryption Readership. In this article: Bitcoin Energy usage and the future of sustainable cryptocurrencies.
When you hear that word “Bitcoin mining”” may conjure images of giant warehouses packed with whirring computers guzzling electricity like there’s no tomorrow, but that image isn’t far from reality.
Since Bitcoin was introduced in 2009, proof of work (PoW) system is both its greatest strength and its greatest controversy. This keeps the network secure and decentralized, but at the same time, digital finance comes with very real energy and environmental costs.
How big is Bitcoin’s energy footprint?
The go-to benchmark is the Cambridge Bitcoin Electricity Consumption Index (CBECI), which estimates the electricity consumption of medium-sized countries due to Bitcoin mining. However, there is a catch here. Bitcoin’s energy usage is not increasing steadily. Instead, it follows market cycles. when bitcoin price As it surges, miners switch on more rigs, pushing up hashrate, difficulty, and power demand. When prices fall, older or less efficient machines stop working.
Stoll, Klaaßen, and Gallersdörfer (2019) estimated annual consumption at that time to be approximately 46 TWh and CO₂ emissions to be approximately 22 megatons. More recently, there is new data showing that consumption has increased significantly.
According to the 2025 Cambridge Digital Mining Industry Report, Bitcoin’s annual electricity usage is currently estimated at 138 TWh, and its overall network emissions are approximately 39.8 million tons of CO₂e. The report also notes that in 2025, 52.4% of the energy used by miners will come from sustainable sources (renewables + nuclear power).
These updated numbers provide a more nuanced story heading into 2025, showing that while Bitcoin’s environmental footprint remains high, the composition of its energy mix is also changing.
Beyond carbon: the full footprint
A new study asks a broader question: What are the total environmental costs? 2023 Paper by Chamanara others. (2023) estimate Bitcoin mining at up to 173 TWh, including CO₂, water, and land impacts.
Meanwhile, the United Nations University warned that mining is a big drain on freshwater in areas where supplies are scarce. And it’s not just about running machines. de Vries (2021) estimates that decommissioned ASIC rigs generate tens of kilotons of e-waste annually, as miners process large quantities of hardware every few years. This big picture means that Bitcoin’s footprint is now multidimensional, including electricity, emissions, water, land, and waste.
Proof of work and proof of stake
This is where the story gets interesting. Not all blockchains consume energy like Bitcoin. In September 2022, Ethereum merge will support PoW. proof of stake (PoS). Overnight, its energy usage decreased by up to 99.9%. Same user experience, but fundamentally different environmental profiles. This move showed the world that cryptocurrencies don’t have to be climate change villains.
Ethereum’s success has raised uncomfortable questions about Bitcoin. If another large chain can provide security and functionality without consuming the same energy, should Bitcoin follow suit?
Purists say no. PoW is what makes Bitcoin incorruptible, apolitical and secure. Critics counter that clinging to PoW risks political backlash, carbon taxes, and even outright bans in certain jurisdictions.
Will mines become environmentally friendly?
Not all miners have a negative impact on the environment. Some argue that they are part of the solution, not the problem. In Texas, mining farms contract with power grid operators to cut power when demand spikes. In Iceland and Canada, miners are connecting to cheap hydropower. Recent engineering research is also looking at using mining to monetize surplus methane discarded from landfills and stranded renewable energy sources.
The optimistic story goes like this. Bitcoin mining could act as a “buyer of last resort” for surplus green energy, smoothing out fluctuations in solar and wind power generation. Research such as Hossain & Steigner (2024) suggests that under the right conditions, mining can be an economic driver for renewable projects.
However, no conclusion has been reached yet. Whether miners truly accelerate the green transition or simply pursue cheaper power opportunistically will depend on location, incentives, and regulations.
The road ahead
So where will we be in 2025? Here are the key takeaways:
- Bitcoin’s footprint is real and significant. We’re not just talking about electricity, we’re also talking about carbon, water, land and e-waste.
- Design is important. The Ethereum merge proved that PoS can reduce energy costs without disrupting the network. In contrast, Bitcoin has doubled in PoW.
- We need nuance. Not all mining is the same. Coal-based rigs in Kazakhstan are very different from hydropower plants in Quebec.
- Policy pressures are increasing. Expect governments to ask more than just “how much electricity?” However, “What kind of power, where, and what kind of externality?”
Bitcoin has always had energy issues. Whether it becomes a climate change villain or an unlikely green ally will depend on the choices miners, policymakers and communities make in the coming years.
For now, one truth is clear. In cryptocurrencies, what is invisible is not weightless. The future of digital money is literally tied to the power grid.
References
- Cambridge Alternative Finance Center, 2025. Cambridge Digital Mining Industry Report 2025. Cambridge Judge Business School.
- Chamanara, N., Pereira, A.O., Dsouza, C., Pauliuk, S., Hertwich, E.G., 2023. Environmental footprint of Bitcoin mining around the world. the future of the earth11(11), e2023EF003871.
- de Vries, A., 2021. The Bitcoin boom: The impact of price increases on network energy consumption. Joule5(3), pp.509–513
- Stoll, C., Klaaßen, L., Gallersdörfer, U., 2019. Bitcoin’s carbon footprint. Joule3(7), pp. 1647–1661.
- Hossain, M. & Steigner, T., 2024. Balancing innovation and sustainability: Addressing the environmental impact of Bitcoin mining. 10.48550/arXiv.2411.08908.
- de Vries-Gao, A. & Stoll, C., 2021. Bitcoin’s growing e-waste problem. Resource conservation and recycling175. 105901. 10.1016/j.resconrec.2021.105901.
