Bitcoin transactions not only guzzle electricity, but also need ‘swimming pools’ worth of water

Bitcoin transactions are not only guzzling electricity, but are also thirsty for so much water that the amount used for one transaction would be enough to fill “a backyard swimming pool,” a recent analysis found.

Billions of people across the world are struggling with shortages of fresh water, and with climate change and extreme weather events the situation may worsen in the coming decades.

How much water is too much water?

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The study based on the analysis done by Alex de Vries of Vrije Universiteit Amsterdam says that Bitcoin’s water footprint has rapidly increased in recent years.

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As of 2023, Bitcoin’s annual water footprint may cross 2,200 billion litres or gigaliters (GL), according to the study in the journal Cell Reports Sustainability. According to de Vries, that is over six million times more water than a credit card swipe.

Between 2020 and 2021, the water footprint of Bitcoin increased by as much as 166 per cent, from 591.2 to 1,573 GL, said the study.

What is this water being used for?

Bitcoin uses such large amounts of water for its enormous amount of computing and with that, it burns through a lot of energy. Therefore, the systems use a great deal of water in their cooling systems to keep the bitcoin mining machines from overheating.

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In fact, Bitcoin is so power-hungry that, according to the Cambridge Centre for Alternative Finance (CCAF), it consumes only a little less electricity than the entire country of Poland, which is home to around 38 million people.

In his study, de Vries noted how most of the research about the environmental impact of Bitcoin mining has been focused on its energy consumption, carbon footprint, and the electronic waste it generates but given the shortage of water and the estimated use of it in the Bitcoin network it is crucial to understand the water footprint of the cryptocurrency usage.

As the amount of water that Bitcoin uses, not only can it potentially impact different countries’ climate goals, but also potentially poses an additional stress to water resources in drought-prone areas.

Notably, the numbers are based on the assumption that Bitcoin mines run on water-dependent cooling systems but some data centres and crypto mines also use a different system which not only keeps the computers cool but also cuts down water consumption by immersing them in a non-conductive liquid, reported The Verge.

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The author of the study also argues that Bitcoin does not actually need this much water and it is a process of “mining” the cryptocurrency which requires an enormous amount of water since miners compete against each other and the same transaction is being worked on several times by multiple power-hungry computers.

“All of these machines combined are generating 500 quintillion guesses every second of the day, non stop – that is 500 with 18 zeros behind it,” de Vries told the BBC.

(With inputs from agencies)