It was already known that cryptocurrency transactions can be associated with high energy consumption. Depending on the method used to approve transactions on a cryptocurrency’s digital logbook, it can be high energy intensity.
In particular, Bitcoin’s so-called proof-of-work method places great demands on the computing power of computers and is therefore very energy-intensive. That was the reason why entrepreneur Elon Musk stopped accepting bitcoin as a means of payment for his Tesla car brand in 2021.
The high energy consumption of the proof-of-work method of approving transactions was also one of the reasons why the Ethereum platform switched to another verification method last year. It is much less energy intensive, and this clearly has implications for Ethereum’s estimated energy consumption and CO2 emissions.
But what are the most environmentally harmful cryptocurrencies? And how many trees should be planted annually to offset the emissions of using different cryptocurrencies? At the Luxembourg data agency Forex Suggest, they decided to dive in.
Plant 432 million trees for 1 year bitcoin
A study published on Friday states that to offset the estimated CO2 emissions of bitcoin, no less than 431.6 million trees would need to be planted. It is difficult to plant half a tree, so abysmal 432 million trees. And then it’s only about the consequences of bitcoin’s energy consumption in 2022.
Bitcoin thus far exceeds the emissions of the other seven most environmentally damaging cryptocurrencies in the world.
To offset the estimated CO2 emissions of all litecoins from 2022, about 2.6 million trees would have to be planted. Bitcoin cash, a fork of bitcoin, completes the 3 most environmentally damaging cryptocurrencies with 707,332 trees to plant.
Below you can see how many trees need to be planted according to the Forrex Suggest study to offset emissions for the eight most energy-intensive cryptocurrencies.
The researchers arrived at this number by analyzing how much power you need per transaction of a particular cryptocurrency and how many transactions were made per coin in 2022.
To arrive at the number of tonnes of CO2 emitted per currency, the researchers used a calculation module from the data site Carbonify. The module also showed the number of trees that would need to be planted to offset these CO2 emissions. Carbonify bases its calculation module on studies from, among others, the University of Chicago and the United Nations.
With the number of trees to be planted, Carbonify takes into account that a tree in humid tropical areas removes an average of 22 kilos of CO2 from the air in 40 years. A tree will remove 1 ton of CO2 from the air throughout its lifetime, but not all trees achieve this. Some die and others are cut down.
Carbonify therefore assumes that five trees must be planted to ensure that one tree lives for 40 years, and that the five trees together can remove 1 ton of CO2 from the air.
Below you can see the electricity consumption per cryptocurrency and the corresponding estimate of CO2 emissions for the whole of 2022.
The CO2 emissions of cryptocurrencies are increasing
Cryptocurrency issuance is also on the rise, according to an analysis of data by Forrex Suggest.
The eight most energy-intensive cryptocurrencies still consumed around 107 billion kWh of electricity in 2021, while this increased to 116 billion kWh in 2022. The table above shows that bitcoin alone accounts for the majority of this energy consumption.
If you couple that with an estimate of CO2 emissions, then in 2021 it was about 80 million tons of CO2 for the top 8 energy-intensive cryptocurrencies. Last year this rose to more than 87 million tonnes of CO2.
In absolute terms, CO2 emissions increased the most for Bitcoin, which saw its global CO2 emissions increase by 29.4 million tonnes of CO2 in 2022 compared to the previous year.
In a relative sense, the cryptocurrency Cardano turned out to be the biggest climber on the emission ladder. The estimated CO2 emissions of this coin increased by no less than 113 percent last year compared to the previous year.
Cryptocurrency Ethereum saw its emissions fall the fastest in both absolute and relative terms in 2022. The currency still emitted 22 million tons of CO2 in 2021, but was able to reduce this to 8.8 tons of CO2 in 2022. This therefore has everything to do with switched to the so-called proof-of-stake method for approving transactions.
also read: The Ethereum merger has been completed – what some say is the most significant crypto event since the creation of Bitcoin
Bitcoin uses 331 million kWh of electricity in a day
How much electricity does bitcoin actually use per day? To calculate it, we look at the daily number of bitcoin transactions. In recent months, this has fluctuated roughly between 240,000 and 300,000 transactions, according to data from the Ycharts website, which tracks the daily number of bitcoin transactions.
You need a lot of power for that, it turns out. On Thursday, January 5, a total of 279,391 bitcoin transactions were made worldwide, according to Ycharts.
Data from Forrex Suggest shows that 1,184 kWh of electricity is required per transaction. By multiplying these two numbers together, we learn that all Bitcoin transactions on Thursday required 330.8 million kWh of power, rounded up.
We cannot calculate how many trees you need to plant for this based on the Carbonify module. However, we can calculate the average number of trees you would have to plant daily in 2022 to offset the CO2 emissions of bitcoin.
We do this by dividing the total number of trees to be planted, i.e. 431.6 million, with the number of calendar days in a year (365). This results in a total of 1.2 million trees per day. That is something for a very volatile currency, where the question is whether it will ever achieve the status of a widely accepted means of payment.