Energy Consumption of Crypto Mining: Consequences and Sustainable Solutions Using Systems Thinking and System Dynamics Analysis

Cryptocurrencies have gained global recognition, yet their rapid expansion is accompanied by significant environmental concerns due to their energy-intensive operations. This study employs novel system thinking and system dynamics approaches to examine the impact of cryptocurrencies on energy use, water consumption, and carbon emissions. The findings underscore the significant negative environmental impact resulting from cryptocurrency mining. According to our results, in 2023, the water consumption and carbon emissions of cryptocurrencies amounted to 1859 × 106 m3 and 90.6 × 106 tons CO2e (0.25% of global CO2 emissions), respectively, linked to the consumption of 119.7 × 106 MWh of electricity (0.5% of global electricity consumption). To provide context, this volume of water could fulfill the basic drinking water and sanitation needs of a global population that lacks access. Similarly, the electricity consumption equates to supplying a country like Argentina, which has a population of nearly 46 million. Without intervention, these figures are projected to increase sixfold by 2030. We recommend the adoption of renewable energy curtailment for Proof-of-Work cryptocurrency mining. Alternatively, technologies like the Pi network, based on the Stellar Consensus Protocol, offer a sustainable and energy-efficient solution.