Is Crypto, Blockchain & Web3 bad for the environment?

A guide for business leaders - 07 June 2022

Alex Freeman

Jun 07, 2022

Total Energy Use

Blockchain technologies & cryptocurrencies use a tiny fraction of global energy.

Total Global CO2 emissions are 49,360 Mt. [China = 11,580 Mt. USA = 5,830 Mt.]

Bitcoin’s CO2 emissions are 39 Mt. [link]

Bitcoin uses less than 0.08% of global emissions; that is less than 1 / 1,000th.

Renewables Mix

China uses electricity that’s 15% renewables. [link]

U.S. uses electricity that’s 30% renewables. [link]

Bitcoin uses between 55%-70% renewables. [link] [link]

Industry Energy Use

BTC vs Gold vs Banking

[Data source] [Graph by Ark Invest]

Purpose of Use

Something “wastes” energy only to those who think it serves no useful function.

Crypto secures $2Tn in value
Stablecoins process $120Tn in transactions per day
Crypto enables 2 Billion unbanked people to access the financial system
Crypto enables Russians to fund anti-corruption efforts.

Energy wasted by electronic devices in standby mode is 400 Terrawatts/year. By 2025 this will be 1,140! [link]

The Bitcoin network uses 204.5 Terrawatts/year [link]

Electronic devices that are off & idle, use more than double the energy of the entire Bitcoin network.

Bitcoin provides a global, freely available, censorship resistant, debasement protected and human rights preserving monetary network for the entire world.

It takes more energy to run TikTok or have Christmas lights than Crypto mining. Yet nobody is trying to shut them down.

Energy Use Will Drop

The vast majority of Bitcoin energy is used for minting new coins.

Bitcoin minting is programmatically preset to geometrically decay to zero.

By 2040, more than 99% of all bitcoins will have been minted.

Energy consumption is driven by Proof-of-Work consensus.

Most new Blockchains chains use Proof-of-Stake which uses 10,000X less energy. [link]

For example, Bitcoin uses 2,095 kWh per transaction but Hedera Hashgraph consumes 0.0017 kWh per transaction.

Dozens of top L1 chains including XRP, Cardano & Tezos, all use orders of magnitude less energy that Bitcoin.

Other solutions to crypto mining energy consumption include Layer-2 solutions like the Lightning Network, pre-mining the coins (e.g. XRP) and using carbon offsetting.

Crypto Mining Drives Renewables Adoption

Crypto mining needs the cheapest energy to be profitable and that is now green energy.

So miners colocate to where power is abundant and free, which often means renewable hydroelectric or geothermal sources. Economics will drive change.

Solutions Are Already Here

Companies concerned about the energy consumption & climate impact of Blockchain technology already have fully audited, Nasdaq listed solutions available.

HIVE Blockchain Technologies [Nasdaq: HVBT] provides investors access to Bitcoin and Ether mined using 100% renewable energy.

Chains like Hedera Hashgraph [HBAR] have a governing council including: Boeing, Deutsche Telekom, DLA Piper, Google, LG Electronics, Tata, Wipro, EPTPOS, and IBM. [link]

These are companies with strict ESG regimes who do not take risks with their brands.