In a new study titled “The Carbon Footprint of Bitcoin” published in Joule today (June 12, 2019) Christian Stoll, Lena Klaassen and Ulrich Gallersdörfer find that: “the level of emissions produced by Bitcoin sits between the levels produced by the nations of Jordan and Sri Lanka, which is comparable to the level of Kansas City”. This result is based on an identified emission factor of 480-500 grams of carbon dioxide per kilowatt-hour (gCO2/kWh) used to power the Bitcoin mining network, which is in line with the emission factor applied to the Bitcoin Energy Consumption Index over the past few years (currently 475 gCO2/kWh).
To obtain the former number, Stoll et al. first try to localize the Bitcoin mining devices in the network. Knowing where mining takes place is the key to knowing how dirty, or how clean, the energy used by mining devices really is. In their study Stoll et al. “develop three scenarios examining the regional footprint of Bitcoin, which are based on the localization of pool server IP, device IP, and node IP-addresses”. These are subsequently aggregated to a network-wide average. The resulting carbon intensity is comparable to the greenhouse gas emissions of electricity generated by natural gas (469 gCO2/kWh), and therefore confirms that the electricity used for Bitcoin mining is far from “green”.
Interestingly, just a week before, crypto company Coinshares had argued the opposite in a report that was released on June 6. In their report Coinshares stated that mining was primarily taking place in Sichuan (China), where miners can take advantage of cheap hydropower. Specifically, half of the global network would be situated in Sichuan, while also representing 83% of all Chinese mining activity. But crucially, the Coinshares report did not once mention the word “carbon”. The new study does not only show that a smaller part of mining in China is taking place in Sichuan (only 58% of all Chinese mining activity is in hydro-rich regions), but also that the emission factor of hydro-rich regions in China is worse than one might expect. Stoll et al. therefore end up concluding that the “approximation of Bitcoin’s carbon footprint underlines the need to tackle the environmental externalities that result from cryptocurrencies”.
For a live (daily) estimate of Bitcoin’s Carbon Footprint check out the Bitcoin Energy Consumption Index.