Tech Industry Coming to Terms with Water Consumption

When it comes to industries commonly viewed as the biggest threats to the environment, sectors like oil and gas and manufacturing often come to mind. We should probably add cryptocurrency to that list as well.

As the crypto industry has aged, we’ve learned more about the environmental impact of bitcoin mining – chiefly that it is an extraordinarily resource-intensive endeavor. A report last month in the journal, Cell Reports Sustainability, determined that water consumption from bitcoin-mining operations will approach a staggering 600 billion gallons this year. At a time when global concerns about the water supply are growing, it seems fair to ask if bitcoin mining needs tighter regulation to mitigate its effects on climate change and the environment.

Bitcoin mining involves confirming transactions done in the cryptocurrency in exchange for new digital tokens. Essentially, miners use special software to solve complex math problems. Running those programs requires substantial amounts of power.

Consequently, bitcoin mining taxes the planet’s water supply in multiple ways. First, miners use water to cool their servers, which generate substantial heat in the mining process. Moreover, the computers and air conditioning systems required for mining eat up power produced by plants that need cooling water of their own. According to the author of the Cell Reports article, bitcoin mining in the United States alone uses as much water in a year as 300,000 households.

Frankly, crypto’s voracious thirst is part of a larger trend in water consumption by the tech industry. China is experimenting with a unique solution to the problem: a first-of-its-kind underwater data center.

Development of the facility is currently taking place near Hainan Island in the South China Sea. The goal is to use the chilly water at the ocean’s floor for natural cooling, thereby cutting energy consumption. The underwater data center will cover the size of about 13 football fields, and one estimate says it will save an amount of power equivalent to the average annual consumption of 160,000 Chinese citizens.

Meanwhile, a reckoning over water consumption is coming for the U.S. tech industry and domestic policymakers. In 2022, Congress passed the CHIPS and Science Act, a package that includes $52 billion allocated to manufacturing semiconductor chips in the United States. Chip makers such as Intel are moving to take advantage of the public investment in manufacturing capabilities.

Much like bitcoin mining, though, developing these chips requires significant amounts of water. As manufacturing facilities for semiconductor microchips sprout up in states like Arizona and Ohio, local governments are researching the possible effects on their water supplies and building water plants to support their operations. While the private sector is developing solutions like advanced treatment technologies to recycle the water consumed by chip manufacturing, policymakers and regulators may soon find themselves scrambling to put tighter guardrails around their impact on the water supply.