Cryptocurrency mining validates transactions on a blockchain through complex mathematical puzzles, consuming significant energy, with bitcoin mining alone using about 121 TWh annually. This process relies on proof of work (PoW), leading to high electricity consumption, as one bitcoin transaction uses more energy than 100,000 Visa transactions. Efforts to mitigate the environmental impact include shifting to renewable energy sources and transitioning to energy-efficient consensus mechanisms like proof of stake (PoS).

1. CRYPTOCURRENCY MINING:
HOW IT WORKS AND ITS
ENVIRONMENTAL IMPACT
UNLOCKING THE SECRETS BEHIND BLOCKCHAIN
POWERHOUSES AND THEIR EFFECT ON OUR PLANET

2. Statistic: Bitcoin mining consumes about 121 TWh of
electricity annually—equivalent to the energy use of
Argentina (Source: Cambridge Bitcoin Electricity
Consumption Index).
INTRODUCTION
Cryptocurrency mining is the backbone of
decentralized networks. But what is it, and why does it
have such a significant environmental footprint?

3. WHAT IS
CRYPTOCURRENCY
MINING?
Cryptocurrency mining is the process of
validating and adding transactions to a
blockchain ledger by solving complex
mathematical puzzles. Miners are rewarded
with cryptocurrency for their efforts.

5. HOW DOES MINING WORK?
Transaction Pool: Pending transactions enter the pool.
Puzzle Solving: Miners use computational power to solve cryptographic
puzzles.
Block Addition: Once solved, the transaction block is added to the
blockchain.
Reward: The miner earns a crypto reward (e.g., Bitcoin).

6. PROOF OF WORK
(POW) MECHANISM
Most crypto mining uses Proof of Work (PoW),
which requires significant computational power to
validate blocks. It ensures security but consumes
immense energy

7. ENERGY CONSUMPTION IN
MINING
Crypto mining is energy-intensive due to its reliance on powerful
hardware. Bitcoin alone accounts for 0.6% of the world’s electricity
consumption (Source: CBECI).
Statistic: One Bitcoin transaction uses more energy than 100,000 VISA
transactions.

9. WHY IS MINING SO
ENERGY-INTENSIVE?
Specialized hardware (e.g., ASICs) requires
significant electricity.
Constant operation to solve puzzles quickly.
Miners compete globally, increasing power usage to
stay competitive.

10. ENVIRONMENTAL
IMPACT
Most crypto mining uses Proof of Work
(PoW), which requires significant
computational power to validate
blocks. It ensures security but
consumes immense energy

11. MINING HOTSPOTS
China (historically dominant but reduced post-ban).
USA (leading in mining operations as of 2023).
Kazakhstan and Russia (due to cheap energy).
MAJOR MINING HUBS INCLUDE:

12. EFFORTS TO
REDUCE
ENVIRONMENTAL
IMPACT
Shift to renewable energy sources (solar, wind, hydro).
Adoption of energy-efficient consensus mechanisms like
Proof of Stake (PoS).
Carbon offset initiatives by mining companies.
Example: Ethereum’s move to PoS reduced its energy
usage by over 99% (Source: Ethereum Foundation).