WHAT IS THE REAL CARBON FOOTPRINT OF THE BLOCKCHAIN?

Proof-of-work blockchain networks consume a very large amount of energy, which results in a very large amount of carbon being emitted. Best estimates place bitcoin around 45.8 TWh, emitting around 45,800,000 Tonnes of CO2 per year [1]. The annual power consumption from Ethereum activity is estimated to be 9.62TWh from September '19 - '20 [2].

[1] Stoll et al., The Carbon Footprint of Bitcoin (2019)
[2] digiconomist.net/ethereum-energy-consumption

WHAT IS THE METHODOLOGY BEHIND THE CARBON.FYI CALCULATOR?

Your wallet’s footprint is derived from the sum of Ethereum Gas consumed for transactions leaving your wallet, multiplied by a best-guess estimated emissions factor. The emissions factor was derived from the energy mix and geographic location of Ethereum mining pools. Read more about our methodology in the Offsetra Knowledge Base.

We are confident these numbers are very fair, accurate, and up-to-date. However you should be aware that this approach does not model nor predict the complex forces which drive future mining power and future emissions (see below).

DO MY CRYPTO TRANSACTIONS EMIT CO2 DIRECTLY?

Not necessarily. Emissions come from mining (competing to solve proof-of-work problems), which is not directly coupled with transaction activity. Miners start mining because they wish to earn a profit. The more miners there are, the more emissions there are. When it is more profitable to mine, more miners will join the network.

We could place the burden of emissions entirely on miners, but that would not be fair to them, as everyone benefits from the stability provided by their mining power! For this reason, we allocate emissions based on your usage of the network, which represents the comparative degree of benefit you receive from the network. This is derived from Ethereum Gas units, which are based on the actual complexity and computational requirements of your transaction or contract.

WHY DO BLOCKCHAINS USE SO MUCH ELECTRICITY?

Bitcoin, Ethereum and many other blockchains utilize a proof-of-work as a mechanism for disincentivizing foul-play and enforcing consensus and agreement between validators.

Simply put, proof-of-work is an arbitrary calculation that must be completed for a block to be added to the chain. Because the completed proof-of-work calculation is used to derive the block hash, and the block hash is included in the next block's data, altering one transaction would require re-doing all of the proofs and regenerating all of the hashes for all of the blocks that followed! This makes it prohibitively expensive for anyone to re-write the chain’s history.

It also means that millions of computers are all racing to solve the same computational puzzle at the same time, so they can win a block reward. The collective computing power and energy consumption for this network is immense.

...SO WHAT CAN I DO TO BE A MORE CLIMATE-FRIENDLY CRYPTO USER?

πŸ‘‰ Support projects using proof-of-stake instead of proof-of-work.

πŸ‘‰ Talk to your energy provider and ask if they sell renewable energy or RECs.

πŸ‘‰ Encourage your government to subsidize renewable energy and tax fossil fuels.

πŸ‘‰ Donate some crypto to political organizations with a real climate action plan.

πŸ‘‰ On behalf of yourself or your favorite mining pool, contribute some of your crypto trading or investment profits to your favorite carbon offsetting projects.

πŸ‘‰ Support us and our future endeavors in the carbon economy.

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