Beyond Bitcoin: Evaluating Energy Consumption and Environmental Impact across Cryptocurrency Projects
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 zo...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2023-09-01
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| Series: | Energies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/1996-1073/16/18/6610 |
| _version_ | 1797580416998178816 |
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| author | Ali Khosravi Fanni Säämäki |
| author_facet | Ali Khosravi Fanni Säämäki |
| author_sort | Ali Khosravi |
| collection | DOAJ |
| description | 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<sub>2</sub> 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<sub>2</sub> emissions. By moving the lens beyond Bitcoin, this paper paints a more nuanced picture of the environmental ramifications of the crypto world. |
| first_indexed | 2024-03-10T22:49:42Z |
| format | Article |
| id | doaj.art-d7b9ebfd646840a985f4b9dd377bf236 |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-10T22:49:42Z |
| publishDate | 2023-09-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-d7b9ebfd646840a985f4b9dd377bf2362023-11-19T10:27:36ZengMDPI AGEnergies1996-10732023-09-011618661010.3390/en16186610Beyond Bitcoin: Evaluating Energy Consumption and Environmental Impact across Cryptocurrency ProjectsAli Khosravi0Fanni Säämäki1Center for Industrial Mechanics (CIM), Department of Mechanical and Electrical Engineering, University of Southern Denmark, 6400 Sønderborg, DenmarkDepartment of Mechanical Engineering, School of Engineering, Aalto University, 02150 Espoo, FinlandSince 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<sub>2</sub> 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<sub>2</sub> emissions. By moving the lens beyond Bitcoin, this paper paints a more nuanced picture of the environmental ramifications of the crypto world.https://www.mdpi.com/1996-1073/16/18/6610energy consumptionbitcoincryptocurrencyCO<sub>2</sub> emissionsconsensus algorithms |
| spellingShingle | Ali Khosravi Fanni Säämäki Beyond Bitcoin: Evaluating Energy Consumption and Environmental Impact across Cryptocurrency Projects Energies energy consumption bitcoin cryptocurrency CO<sub>2</sub> emissions consensus algorithms |
| title | Beyond Bitcoin: Evaluating Energy Consumption and Environmental Impact across Cryptocurrency Projects |
| title_full | Beyond Bitcoin: Evaluating Energy Consumption and Environmental Impact across Cryptocurrency Projects |
| title_fullStr | Beyond Bitcoin: Evaluating Energy Consumption and Environmental Impact across Cryptocurrency Projects |
| title_full_unstemmed | Beyond Bitcoin: Evaluating Energy Consumption and Environmental Impact across Cryptocurrency Projects |
| title_short | Beyond Bitcoin: Evaluating Energy Consumption and Environmental Impact across Cryptocurrency Projects |
| title_sort | beyond bitcoin evaluating energy consumption and environmental impact across cryptocurrency projects |
| topic | energy consumption bitcoin cryptocurrency CO<sub>2</sub> emissions consensus algorithms |
| url | https://www.mdpi.com/1996-1073/16/18/6610 |
| work_keys_str_mv | AT alikhosravi beyondbitcoinevaluatingenergyconsumptionandenvironmentalimpactacrosscryptocurrencyprojects AT fannisaamaki beyondbitcoinevaluatingenergyconsumptionandenvironmentalimpactacrosscryptocurrencyprojects |