THE IMPACT OF CRYPTOCURRENCY PRODUCTION ON ENVIRONMENTAL SUSTAINABILITY

Abstract This paper explores the environmental implications and energy consumption associated with cryptocurrency mining, with a particular focus on Bitcoin and Ethereum. As digital currencies grow in popularity and adoption, their ecological footprint — especially in Proof-of-Work (PoW) systems — has become a significant global concern. The study reviews existing literature and statistical data to compare the energy use, carbon emissions, and environmental externalities of major cryptocurrencies. Key findings reveal that Bitcoin mining consumes over 120 terawatt-hours of electricity annually, contributing to more than 65 million tons of CO₂ emissions, while also generating substantial electronic waste. In contrast, Ethereum’s transition to Proof-of-Stake (PoS) has led to a 99.95% reduction in its energy demand, offering a model for more sustainable blockchain operations. The paper further examines the geographic distribution of mining activities, identifying policy gaps and regulatory responses in countries such as the United States, China, and Kazakhstan. The conclusion underscores the urgent need for coordinated international regulation, environmental taxation, and green innovation to mitigate the hidden costs of crypto mining and align digital finance with sustainable development goals.