Beyond Bitcoin: Evaluating Energy Consumption and Environmental Impact across Cryptocurrency Projects

Ali Khosravi () and Fanni Säämäki
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Ali Khosravi: Center for Industrial Mechanics (CIM), Department of Mechanical and Electrical Engineering, University of Southern Denmark, 6400 Sønderborg, Denmark
Fanni Säämäki: Department of Mechanical Engineering, School of Engineering, Aalto University, 02150 Espoo, Finland

Energies, 2023, vol. 16, issue 18, 1-23

Abstract: Since their inception with Bitcoin in the late 2000s, cryptocurrencies have grown exponentially, reshaping traditional financial paradigms. This transformative journey, while innovative, brings forth pressing concerns about their energy consumption and carbon footprint. While many studies tend to zoom in on Bitcoin, this paper broadens the perspective by evaluating energy consumption across various cryptocurrencies. We analyze nine cryptocurrency projects, chosen for their market value, technology, and data availability. These span a spectrum from pioneering to emerging digital coins, offering a holistic view of the crypto realm. To contextualize, we juxtapose the energy usage of these digital currencies with traditional payment means like Visa and Mastercard. Our analysis shows vast differences in energy use among cryptocurrencies, largely tied to their consensus algorithms. Notably, while Bitcoin stands out as highly energy-intensive, several newer digital currencies have energy footprints mirroring those of conventional payment methods. Additionally, CO 2 emissions estimation presents challenges due to variances in miner locations and regional energy sources, with potential higher emissions if concentrated in carbon-intensive regions like China. Nonetheless, the silver lining emerges as many cryptocurrencies, especially those beyond Bitcoin, register considerably lower CO 2 emissions. By moving the lens beyond Bitcoin, this paper paints a more nuanced picture of the environmental ramifications of the crypto world.

Keywords: energy consumption; bitcoin; cryptocurrency; CO 2 emissions; consensus algorithms (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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