The Moral Cost of Cryptocurrency and Blockchain Mining

Over the past few years, we’ve all heard the buzzwords – Bitcoin, blockchain, Ethereum.  ome see it as a means to make a quick fortune. Others see it as the future money and liberty. This cryptocurrency world has changed the way we think about such things as money, anonymity and even government. Bitcoin, Ethereum, and a few hundred other digital currencies, provide decentralization, openness, and some form of freedom from the old banking systems. There is, though, another side of this technology revolution that is not always seen and is normally overlooked – the ethical and environmental price of the mining sector.

Let’s examine this multifaceted problem on its face.

What is Crypto Mining?

At the center of most cryptocurrencies is the mining sector. Bitcoins are essentially mined through the process of verifying transactions and adding them to a blockchain (portion of a public ledger) and receiving new coins in the process. Miners compete to solve complex mathematical puzzles using computers.

The solution is whoever gets there first to solve the problem, can add the block, and gets paid (some form of cryptocurrency). Harmless sounding, right? But there’s the catch – it requires an enormous amount of computer power and thus an enormous amount of electricity.

Environmental Impacts: On Par with Nations’ Consumption

According to the Cambridge Bitcoin Electricity Consumption Index, as of early 2025, Bitcoin explicitly uses around 110 TWh (terawatt-hours) annually. Following is the background to compare with:

That is enough to supply entire countries like Argentina, or the Netherlands, for a period of one year. It is equivalent to approximately 0.55% of global electricity generation that is more electricity than used by some developing countries.

And that’s just for Bitcoin.

Ethereum, prior to its switch to a more environmentally friendly consensus protocol (we will return to this), used an estimated 78 TWh annually.

Carbon Footprint – A Crypto Coin is Not as Green as It Seems

There is also a second problem that accompanies that energy consumption: carbon emissions. The majority of cryptocurrency mining remains powered by electricity generated from fossil fuels. In China’s Inner Mongolia province, for example, crypto farms were established near coal-fired power plants, where they were able to use cheapest power.

An estimate in Nature Communications in 2022 placed the average carbon footprint of every Bitcoin mined at 400 kg CO₂ – about the same as watching 60,000 YouTube videos or driving a petrol vehicle for 1,000 miles.

And with cryptocurrency gaining popularity, this path is growing as well.

Let us look at an example from history: the small town of Plattsburgh, New York. Plattsburgh became famous in 2018 when cryptocurrency miners found that it had the lowest electricity rate in the U.S. and that it was powered by hydropower from the Niagara River.

Then suddenly, there were miners. That increased demand increased electricity prices for residents. They began receiving electricity bills double and triple the normal figure. The din from all the large fans to cool the mining rigging was a twenty-four-seven noise problem that kept residents awake and interrupted their lifestyle in certain neighborhoods.

Later, the city was forced to impose a temporary ban on new mining activities. It was the first of many cautionary tales regarding the unintended consequences of crypto mining.

The Problem of E-waste: What Does Happen to Old Mining Rigs

Mining itself is not merely electricity and does also need specialized equipment as well, much of it designed specifically for the purpose, such as ASICs (application-specific integrated circuits); and becomes outdated very soon.

In a 2021 report by Digiconomist, it was found that Bitcoin mining produced approximately 30.7 kilotons of e-waste every year! That is equivalent to the amount of e-waste produced by the entire country of Netherlands!.

They are basically useless for anything else. They are actually trash themselves the majority of the time, and the majority of them are discarded and end up in landfills, contaminating the earth with heavy metals and poisons like mercury and lead.

Disproportionate Benefits

Crypto mining channeled money into the coffers of those miners who could afford low-cost electricity and the means to be able to afford first-rate hardware. This means the inequality – those corporate farm miners in nations where electricity is inexpensive just win if they are running and disperse the $ or crypto out into the economy. Others are basically excluded from being able to compete.

Labor Exploitation

In the areas that have outsourced crypto mining (for instance, in Central Asia or Eastern Europe), the workers are generally minimum-wage workers under abysmal conditions. They may be toiling in sweltering server rooms and working long hours with minimal protection under frequently unsafe equipment.

Water Use

The data centers must be cooled. The majority of those working in crypto mining utilize millions of liters of water annually merely to prevent the mining rigs from over-heating. In desert countries and regions of the world, this questions a new ethical issue: is it ethical to recycle water for virtual currency mining?

Ethereum’s Transition: Proof that is Can Be Better?

Its second largest coin, Ethereum, also suffered from the issue. In September 2022 it switched from Proof of Work (PoW) to Proof of Stake (PoS) a change referred to as “The Merge.”

During the migration, Ethereum cut its power consumption by more than 99.95 percent.

Unlike mining, PoS never depends on huge energy-consuming devices, but rather, users “stake” their money in hopes of contributing towards the validation.

If Ethereum can do it, why can’t others?

The Hypocrisy of “Decentralized Freedom”

One of the greatest things about crypto is that it is “decentralized,” i.e., no government and no bank can own it. The irony therefore is that some crypto mining operations also become centralized.

Only 10% of the Bitcoin miners had 90% of the network’s mining capacity in a 2021 report. Not very democratic, if one might say so.

It starts to develop the characteristics of a vacuum in the dream of decentralization when the wealthiest, best-resourced, and luckiest in terms of access to cheap electricity start gaining disproportionately from the system.

Crypto and Illicit Use Cases

There’s an ethical layer to this as well. The truth is cryptocurrencies like Bitcoin trip over themselves with illicit uses like:

• Ransomware
• Money laundering
• Financing Terrorism

According to a Chainalysis report, illicit crypto transactions exceeded $20 billion in just one year in 2022. And while blockchains can theoretically be transparent, tracing illegal money through crypto wallets is still very difficult to do in practice.

So one part of the world can be buying a coffee with Bitcoin, while another can be using it to support criminal acts.

What’s the way forward?

Yes. But it requires a collective effort from the crypto community, developers, governments, and users.

Here are a few possible solutions:

Adopt Greener Consensus Models

More cryptocurrencies can move away from PoW to PoS or alternative greener models such as Proof-of-Space or Proof-of-History like Ethereum.

Regulate Crypto Farms

Countries should start to regulate where crypto farms and crypto mining farms are able to operate, and the resources that are used, especially in areas with scarce resources.

Encourage Transparency

Urge cryptocurrency platforms to make energy consumption, and e-waste information available to their users so they can make educated decisions.

Invest in Recycling

Implement a program for recycling your mining devices, or specific components for a better reuse value.

Signing Off

Cryptocurrency and blockchain are powerful innovations and represents financial inclusion, privacy, and decentralized innovation.

With great power, comes great responsibility.

As users, developers, and investors, we need to ask ourselves. Are we paying too great a cost in our quest for digital freedom? The technology itself is not bad. The devil lies in the way we use it for the purpose of problematic problems we cannot recognize too late.

Latest Stories

Can Empathy Be Coded: The Illusion of Emotion in AI?

Smartphones, Secrets, and Surveillance: What You’re Not Told