Next to the Bitcoin and Ethereum Energy Consumption Index a new Dogecoin Energy Consumption Index has been added to Digiconomist. As the popularity of Dogecoin has been growing over the past year, the environmental impact of its network has been on the rise as well. The new index shows that, over the past year, the annualized energy consumption of the network has grown from just 0.08 TWh at the start of 2021, to more than 6 TWh per the start of 2022. The total energy consumption of the network has therefore increased by a factor 75. Even though this is a significant increase, it should hardly come as a surprise given that the current price of a single Dogecoin is also around 70 times higher than it was in December 2020. It has been well established that the value of cryptocurrencies that make use of proof-of-work mining (like Bitcoin, Ethereum and Dogecoin) is a key driver for their ultimate environmental impact.
The total energy consumption of Dogecoin is comparable to the electricity consumption of a country like El Salvador, which adopted Bitcoin as legal tender in 2021. The associated carbon footprint can be estimated at around 3 megatonnes of CO2 per year, which is comparable to the total carbon footprint of the Bahamas. Because Dogecoin handles a limited amount of transactions, the average amount of energy consumed per processed transaction is close to 600 kWh. This is equal to to more than 9 fully charged standard Tesla Model 3 batteries. Elon Musk had just announced Tesla has started accepting Dogecoin for Tesla merchandise. The carbon footprint of a single Dogecoin transaction is exceeding 280 kilograms of CO2, making it equivalent to the carbon footprint of roughly 624,000 VISA transactions.
Dogecoin community members should note that, while Dogecoin and Litecoin have merged their mining process, the new Dogecoin Energy Consumption Index only reflects Dogecoin’s share of their joint environmental impact.