Bitcoin’s carbon footprint drops – but mining still uses more power than some nations

The amount of greenhouse gases produced by Bitcoin mining has dropped this year – but the cryptocurrency still consumes more power than some nations.

Cryptocurrencies like Bitcoin are created by computer processors carrying out intensive mathematical solutions over a lengthy process and consumes vast amounts of energy.

The most well-known cryptocurrency generates 48.35 million tonnes of carbon dioxide equivalent (MtCO₂e), or 0.10% of global greenhouse gas emissions, according to an analysis by the Cambridge Centre for Alternative Finance (CCAF).

Bitcoin creation creates a similar amount of emissions as countries such as Nepal and the Central African Republic, and about half the emissions from gold mining.

The new tool estimates current greenhouse gas emissions of 48.35 million tonnes of carbon dioxide equivalent (MtCO₂e), or 0.10% of global greenhouse gas emissions, similar to the emissions of countries such as Nepal and the Central African Republic.

Environmentalists, financial institutions and policymakers are growing increasingly concerned about Bitcoin’s seemingly insatiable electricity consumption and its associated environmental repercussions.

The CCAF has developed a tool to estimate Bitcoin’s environmental footprint on a day-to-day basis.

Alexander Neumueller, Digital Assets CBECI Project Lead at CCAF, said: “Environmentalists, financial institutions and policymakers are growing increasingly concerned about Bitcoin’s electricity consumption and its associated environmental repercussions.”

The tool estimates the share of sustainable energy sources in Bitcoin’s electricity mix at 37.6% (26.3% renewables and 11.3% nuclear), which is significantly lower than industry estimates suggest (59.5%).

“A significant decrease in mining profitability led to a decline in electricity consumption,” Neumeller added.

“Given the recent sharp decline in mining revenue per unit of computing power provided, a shift to more efficient hardware occurs, which leads to the, at least temporary, retirement of older, less efficient hardware.”