Every Bitcoin transaction uses, on average, enough water to fill “a backyard swimming pool,” a new study suggests.
Alex de Vries of Vrije Universiteit Amsterdam calculates that’s around six million times more than is used in a typical credit card swipe.
The figure is due to the water used to power and cool the millions of computers worldwide Bitcoin relies on.
It comes as many regions struggle with fresh water shortages.
The study notes that up to three billion people worldwide already experience water shortages, a situation expected to worsen in the coming decades.
“This is happening in Central Asia and the US, especially around California. And that’s only going to get worse as climate change gets worse,” Mr de Vries told the BBC.
In total, bitcoin consumed nearly 1,600 billion liters – also known as gigalitres (GL) – of water in 2021, the study, published in the journal Cell Reports Sustainability, suggests.
It says the 2023 figure could be more than 2,200 GL.
Thirsty work
Bitcoin mainly uses so much water because it relies on enormous computing power, which needs vast electricity.
Bitcoin is so powerful that it uses only marginally less electricity than the entire country of Poland, according to figures from Cambridge University.
Water cools the gas and coal-fired plants that provide that much of our power. And large amounts of water are lost through evaporation from the reservoirs that supply hydroelectric plants.
Some water is also used to cool the millions of computers worldwide on which Bitcoin transactions rely.
Mr de Vries argues that Bitcoin does not need to use this much water – singling out the power-hungry process at its heart, known as “Bitcoin mining.”
In simple terms, miners audit transactions in exchange for an opportunity to acquire digital currency.
But they compete against each other to complete that audit first – meaning the same transaction is being worked on many times over by multiple powerful and power-hungry computers.
“You have millions of devices around the world, constantly competing with each other in a massive game of what I like to describe as ‘guess the number,'” Mr de Vries told the BBC.
“All of these machines combined generate 500 quintillion guesses every second of the day, nonstop – that is 500 with 18 zeros behind it.”
This method is known as “proof of work.” However, changing how Bitcoin works could dramatically cut electricity use and water consumption.
The primary cryptocurrency, Ethereum, did this in Sep 2022, moving to a “proof of stake” system and reducing its power use by more than 99%.
That may not be very easy, though, according to Prof James Davenport of the University of Bath.
“[It was] only possible because the management of Ethereum is significantly more centralized than that of Bitcoin,” he told the BBC.
Nonetheless, others say the findings of this research are worrying.
Dr. Larisa Yarovaya, associate professor of finance at the University of Southampton, said using fresh water for Bitcoin mining, particularly in regions already grappling with water scarcity, “should be a cause for concern among regulators and the public.”