Global Impact of Crypto Trading

How many trees would we need to absorb the CO2 produced by cryptocurrencies?

In recent years, cryptocurrencies have risen from relative obscurity to become one of the most talked about assets in the world of investing. Crypto has seen prices explode across the board, leading to more people than ever wanting to get a piece of the action by either buying cryptocurrencies or mining it for themselves.

However, mining cryptocurrencies is a highly energy intensive process that requires computers to solve complex algorithmic problems in order to add to the blockchain and receive cryptocurrency tokens. This process is necessary both to create new tokens and to register transactions on the blockchain.

This surge in interest in cryptocurrency comes at a time when the dangers of climate change are becoming increasingly apparent to people all over the globe. This increased awareness is being accompanied by a push toward low emission technology and green solutions with the aim of reducing emissions and halting climate change.

A greater spotlight is being shone on the climate impact of crypto trading, as many investors are wary of the sustainability of the sector and how well it will be able to adapt to any new regulations on CO2 emissions. For instance, in May of this year, Elon Musk announced that Tesla would no longer be accepting Bitcoin as payment due to the cryptocurrency’s high emissions and climate impact, which sent crypto markets crashing.

So, what does the future hold for crypto in a more environmentally conscious world? Which cryptocurrencies are the biggest offenders when it comes to emissions and how many trees would need to be planted to offset these yearly CO2 emissions?

The most-polluting cryptocurrencies

We’ve looked at some of the most popular cryptocurrencies currently on the market to see how they compare in terms of CO2 emissions. Each cryptocurrency uses a different amount of electricity to process a transaction and mine new tokens. This depends on the process that each cryptocurrency uses to add to the blockchain, with some methods being more complex and energy-intensive than others.

Here’s how some of the top cryptocurrencies compare in terms of emissions and energy consumption per transaction.

1

Bitcoin

CO2 per transaction:

1060.5 lbs

Bitcoin is by far the most polluting and energy-intensive cryptocurrency out there, using 707 kWh per transaction. This equates to 1,060.5 lbs of CO2 for every transaction, which is just over half a ton!

2

Ethereum

CO2 per transaction:

93.84 lbs

Ethereum uses the second most energy for each transaction consuming 62.56 kWh, which produces 93.84 lbs of CO2. Despite being far more efficient than Bitcoin, this is still a very high energy cost that produces a worrying amount of CO2.

3

Bitcoin Cash

CO2 per transaction:

28.44 lbs

In third place is Bitcoin Cash, a derivative of Bitcoin. This cryptocurrency uses 19.957 kWh per transaction and produces 28 lbs of CO2.

Unfortunately, it appears that two of the most popular cryptocurrencies, Bitcoin and Ethereum, are also the most energy-intensive. This doesn’t bode well for the environment and could cause investors to worry about potential regulation by governments on the mining of these top polluters in their territories, which could have a severe knock-on effect on crypto markets.

The most-polluting cryptocurrencies ranked

Cryptocurenccy

Energy Used per Transaction (kWh)

CO2 per Transaction (tons)

CO2 per Transaction (scaled measurements)

Environmental Impact of Crypto Transactions

2020 2021

Having seen how much CO2 each cryptocurrency produces per transaction, we wanted to find out how much pollution each of our selected cryptocurrencies produces over the course of a year. We were also interested to find out just how many trees would be required to capture this amount of CO2 and offset the damaging effects of this pollution.

Here’s what we found when looking at the number of transactions for each cryptocurrency in 2020.

1

Bitcoin

2020 CO2 emissions:

59.9 million tons

Number of trees required:

299.6 million

Bitcoin used by far the most energy of any cryptocurrency in 2020, producing as much as 59.9 million tons of CO2 in just twelve months. In order to offset this gargantuan figure, 299.6 million trees would’ve needed to be planted. This makes Bitcoin an incredibly unsustainable cryptocurrency that will need to reform the way it functions in order to adapt to a low-carbon world.

2

Ethereum

2020 CO2 emissions:

16.6 million tons

Number of trees required:

84.3 million

Ethereum produced the second-highest amount of CO2 in 2020 with 16.6 million tons, which would have required 84.3 million trees to be planted to capture the harmful pollutant. Despite producing much less CO2 over the course of 2020 than Bitcoin, Ethereum is still operating at an unsustainable rate of energy consumption, which makes it one of the dirtiest cryptocurrencies of the last year.

3

Litecoin

2020 CO2 emissions:

257,343 tons

Number of trees required:

1.3 million

In third place is Litecoin, another well-established cryptocurrency that presents a viable alternative to Bitcoin for investors. Litecoin uses less than a third of the energy Ethereum does to process a transaction at 18.522 kWh. However, with more than 18.5 million transactions in 2020, Litecoin mining produced approximately 257,343 tons of CO2 over the course of the year, which would’ve required 1.3 million trees to be planted to offset it from the atmosphere.

Environmental impact of crypto transactions 2020 ranked

Cryptocurrency

Energy Used per Transaction (kWh)

No. Transactions 2020

2020 Annual Electricity Usage

Annual Emissions (tons CO2)

No. Trees to Offset Emissions

Having seen the data for 2020, we wanted to see what the current levels of cryptocurrency transactions mean for crypto pollution in 2022. We’ve looked at the number of transactions for each cryptocurrency from January to August of this year, and used that to estimate the total figures for 2022.

Here’s what 2022 is on course to see in terms of crypto transactions and pollution, as well as how many trees would be required to counteract this activity.

1

Bitcoin

2021 CO2 emissions:

56.8 million tons

Number of trees required:

284.1 million

As with the previous year, Bitcoin is on course to be the most polluting cryptocurrency of 2022, with a projected 56.8 million tons of CO2 emissions that would require 284.1 million trees to offset. While this does represent a decrease in the emissions produced by Bitcoin against 2020 levels, it is still much higher than any other cryptocurrency. This is because Bitcoin’s emissions are so high that even with a projected 5.16% decrease in transactions, it emits more than two and a half times more CO2 than the next biggest polluter.

2

Ethereum

2021 CO2 emissions:

22 million tons

Number of trees required:

109.8 million

Ethereum again takes second place, though this time with a markedly higher CO2 output of 22 million tons. This shows that as interest in Bitcoin plateaus or even diminishes, Ethereum is enjoying a boom in popularity. This could be at least partly due to the popularity of NFTs which have flourished in 2022, the majority of which are built on the Ethereum blockchain.

However, this increase in popularity means the CO2 produced that a year’s worth of Ethereum transactions now requires a huge 109.8 million trees to remove it from the atmosphere.

3

Bitcoin Cash

2021 CO2 emissions:

1.5 million tons

Number of trees required:

7.4 million

In third place is Bitcoin Cash, which is on track to produce 1.5 million tons of CO2 in 2022, which would require as many as 7.4 million trees to be planted to counteract this pollution. While much lower than the numbers seen for Bitcoin and Ethereum, 7.4 million trees take up a lot of space, and as trees take time to grow and absorb CO2, this is still a worryingly high figure for any single cryptocurrency.

Environmental impact of crypto transactions 2022 ranked

Cryptocurrency

Energy Used per Transaction (kWh)

No. Transactions 2022 (Jan-Aug)

2021 Annual Electricity Usage

Annual Emissions (tons CO2)

No. Trees to Offset Emissions

Pollution levels: Which cryptocurrencies are increasing the fastest?

With data for the CO2 emissions of these top cryptocurrencies over the past two years, we were able to calculate the rate at which emissions are changing for each one. Here’s what we found.

1

Bitcoin Cash

Increase in CO2 emissions:

748%

The cryptocurrency that increased its emissions the most from 2020 to 2022 is Bitcoin Cash, which is on track to release 1,303,278 tons of CO2 into the atmosphere this year. That’s an increase of 748%! Bitcoin Cash uses 18.957 kWh of electricity to process a single transaction which, while not as polluting as Bitcoin or even Ethereum, is still a huge amount of energy for a process that will be repeated an estimated 69.3 million times this year.

2

Cardano

Increase in CO2 emissions:

551.35%

Cardano is another widely popular cryptocurrency that is commonly found in crypto-investors’ portfolios. However, unlike other big-name cryptos, Cardano uses a Proof-of-Stake (PoS) blockchain which requires much less energy and processing power than the Proof-of-Work (PoW) blockchain used by the market leaders.

3

Stellar

Increase in CO2 emissions:

189.60%

Stellar is another cryptocurrency that has been steadily growing in popularity. Unlike many other cryptocurrencies, Stellar utilises a method of transaction verification outside of the usual PoW/PoS routes called Consensus Protocol, which allows Stellar servers to sync with each other to validate transactions and add them to the global ledger.

The Stellar Consensus Protocol is so much more efficient than PoW or PoS that Stellar produced by far the least CO2 in 2020 and 2022, despite having the highest number of transactions. Therefore, the increase in Stellar’s CO2 emissions of 189.6% is not nearly as damaging as it might first seem, amounting to 23.99 tons of CO2.

Graph view Table view

Pollution levels: Which cryptocurrencies are increasing the fastest ranked

Pollution levels: Which cryptocurrencies are increasing the fastest ranked

Cryptocurrency

2020 Annual Electricity Usage (kWh)

2020 Annual Emissions (tons CO2)

2021 Annual Electricity Usage (kWh)

2021 Annual Emissions (tons CO2)

Change in Emissio(tons CO2)

Change in Emissions (%)

The crypto climate outlook

2021 has been a rollercoaster ride for the crypto community. Record highs in May preceded a sudden slump in values across the market following Musk’s U-turn on accepting Bitcoin as payment at Tesla, and most recently NFTs have driven interest in Ethereum as the uses of blockchain technology become more varied and diverse.

However, with the climate crisis looming and energy shortages striking many countries in the developed world, the energy consumption of cryptocurrencies has never been more under the spotlight.

Some cryptocurrencies are trying to adapt to this changing world by reducing the energy required for transactions to take place on their blockchain. For example, Ethereum is moving to a PoS model from its current PoW method of validating transactions, but is this going to be enough? Or will the crypto community need to adapt to alternative coins and blockchains in order to make the change before it’s too late?

With this in mind, we’ve highlighted some of the best cryptocurrencies currently available in terms of low energy consumption rates per transaction. Here’s our top five.

Low energy-intensive coins

These are some of the least energy-intensive cryptocurrencies currently available.

Methodology

We wanted to assess the crypto market in terms of CO2 output and green credentials. To do this, we gathered data from Statista on the number of transactions in 2020 and 2022 so far for a range of prominent cryptocurrencies. We then sourced data on their energy consumption per transaction from multiple sources including Laptop Mag, Business Insider India, and CryptoVantage.

We then used Carbonify’s carbon dioxide emission calculator to work out how much CO2 each cryptocurrency generates for each transaction, and as well as a monthly and yearly rate. This calculator also gave us the number of trees which would need to be planted to counteract each cryptocurrency’s pollution.

We calculated the most polluting cryptocurrencies per transaction, as well as working out their overall figures for 2020, and projected figures for 2022 based on data for January to August. With two years’ worth of pollution figures, we were then also able to calculate the increase for cryptocurrency from 2020 to 2022 and rank them accordingly.

In addition to highlighting the biggest polluters, we also wanted to reveal some of the least polluting cryptocurrencies available. To do this we found as many cryptocurrencies’ energy consumption rates per transaction as possible and selected the five most efficient. Data for any newly added cryptocurrencies was sourced from Real Simple and TRG Datacenters. You might like: "Best Forex Brokers in the UK"

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