Bitcoin has undoubtedly become an important part of the global financial system since its invention in 2009 by Satoshi Nakamoto. Its popularity keeps rising despite occasional bouts of price crashes. However, if there is one constant criticism that Bitcoin has had to deal with, it’s the impact it has on the environment. And more specifically, it’s the cryptocurrency’s huge carbon footprint.
So, how exactly big is Bitcoin’s carbon footprint? And what would it take to offset it? Here’s everything you need to know.
How much CO2 does bitcoin emit?
According to Forex Suggest, Bitcoin is on course to be the most polluting cryptocurrency of 2021, emitting approximately 56.8 million tonnes of CO2.
Unfortunately, as Bitcoin’s price soars again, so will the amount of energy involved in its transactions and thus the level of emissions.
To offset Bitcoin’s CO2 emissions alone this year, Forex Suggest says that more than 284 million trees would need to be planted.
What about other coins?
Bitcoin is not the only digital coin with a big carbon footprint.
The second most popular coin after Bitcoin, Ethereum is expected to emit 21.9 million tonnes of CO2 by the end of 2021. Offsetting Ethereum’s carbon footprint will require around 110 million trees.
As NFTs which are held on the Ethereum blockchain continue to become more popular, Ethereum’s carbon footprint is expected to become even bigger.
Bitcoin Cash, meanwhile, is expected to produce 1.5 million tonnes of CO2 in 2021, which will require 7.4 million trees to be planted.
Here are a few other cryptocurrencies, along with their projected electricity usage and carbon emissions in 2021, as well as the number of trees that will be required to offset emissions.
|
Rank |
Currency |
Projected 2021 electricity usage (KWH) |
Projected annual emissions (tons CO2) |
No. of trees to offset emissions |
|
1 |
Bitcoin |
75,766,894,371 |
56,825,171 |
284,125,854 |
|
2 |
Ethereum |
29,267,017,296 |
21,950,263 |
109,751,315 |
|
3 |
Bitcoin Cash |
1,970,044,710 |
1,477,534 |
7,387,668 |
|
4 |
Litecoin |
693,681,721 |
520,261 |
2,601,306 |
|
5 |
Cardano |
7,051,032 |
5,288 |
26,441 |
|
6 |
Ripple |
4,243,705 |
3,183 |
15,914 |
|
7 |
Dogecoin |
1,897,998 |
1,423 |
7,117 |
|
8 |
Stellar |
48,851 |
37 |
183 |
Are there any environmentally friendly cryptocurrencies?
As concerns about Bitcoin’s environmental impact continue to grow, new cryptocurrencies that do not rely on Bitcoin’s ‘proof of work’ mining model that is very energy-intensive have emerged.
Some of these cryptocurrencies use a model known as ‘proof of stake’, whereby users are required to purchase tokens in order to join their networks. This reduces the amount of energy that is required, lowering emissions. An example of a digital coin that uses this model is Cardano (ADA).
Another coin, Chia, uses a ‘proof of space and time’ model, whereby farming of the coin is facilitated by unused space on the hard drives of laptops or desktops.
Other digital assets, such as NANO, for example, do not need to be mined at all. Instead, they rely on other energy-efficient processes.
These are just a few of the many environmentally friendly cryptocurrencies that are currently available, with more expected to emerge in the future. In a nutshell, there are plenty of options for environmentally conscious cryptocurrency investors looking for alternatives to Bitcoin.
That said, investors should not forget that generally, the crypto market is still highly speculative and volatile. If you are looking for a less risky way to invest your money, consider investing in stocks and shares.
Investing in Cryptocurrency is extremely high risk and complex. The Motley Fool has provided this article for the sole purpose of education and not to help you decide whether or not to invest in cryptocurrency. Should you decide to invest in cryptocurrency or in any other investment, you should always obtain appropriate financial advice and only invest what you can afford to lose.
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About the author
Sean is a personal finance writer with a strong passion for helping others become more financially literate and make better financial decisions. He covers everything from credit cards to savings to investing.
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