A new study has found that each bitcoin transaction requires a colossal volume of water, comparable to filling a backyard swimming pool.
Alex de Fries of Amsterdam's Vrije Universiteit Amsterdam calculates that this volume is about six million times the amount required for a typical credit card.
This figure includes the water used to cool and power the millions of computers around the world that support the bitcoin infrastructure. According to a study published in the journal Cell Reports Sustainability, bitcoin absorbed nearly 1,600 billion litres of water in 2021 alone. This is predicted to increase to 2,200 billion litres in 2023.
Water is required to cool gas and coal-fired power plants, which are the main source of electricity. A large amount of water is also lost through evaporation from reservoirs used to power hydroelectric plants. In addition, a significant amount of water is used to cool the millions of computers around the world that perform bitcoin transactions.
The process of mining, the essence of which is the verification of transactions to obtain digital currency, involves competition between miners to complete this verification. The same transaction can be processed by several powerful and power-hungry computers.
"Millions of devices around the world are involved in a huge 'guess the number' game," Mr de Fries noted in an interview for the BBC. "These machines together generate 500 quintillion guesses per second, working around the clock - that's 500 calculations with 18 zeros after the number."
This approach is known as "proof-of-work" (POW). However, changing the way the bitcoin system works could significantly reduce electricity and thus water consumption. Ethereum has already made such a transition in September 2022 by switching to a "proof-of-share" (POS) system, which reduced power consumption by more than 99 per cent.
Dr Larisa Yarovaya, associate professor of finance at the University of Southampton, said the use of fresh water for bitcoin mining, especially in water-stressed regions, has raised concerns among regulators and the public.
The publication on Yahoo, once again trying to convince people of the superiority of centralisation over decentralisation and the POS system over POW, has sparked a lot of discussion. However, critics argue that such logic may lead to the idea that attention should be paid to gold and silver mining.
For example, large open-pit gold mines have long required huge amounts of water - up to 100 million cubic metres daily for fifty years. In addition, gold mining techniques such as smelting and heap leaching have a serious environmental footprint.
Consequently, even with all the discussion of energy and water consumption in bitcoin mining, it is worth considering similar issues in other areas of material extraction.