Study: The Carbon Emissions of Bitcoin From an Investor Perspective

Key results of our study

  1. Bitcoin network electricity consumption: The maintenance of the worldwide Bitcoin network required 90.86 TWh and 37.97 MtCO2eq within the specified period. Electricity consumption should be viewed from a neutral perspective. What matters is the source of the electricity that is consumed. It is key to distinguish between renewable sources of electricity and fossil fuels. We do this by taking into account the total electricity mix of each country to convert Bitcoin’s electricity consumption into its carbon footprint.
  2. For comparison, the most recent estimate of the total yearly carbon footprint of the world is 45,873.85 MtCO2eq. This leaves Bitcoin with a total footprint of 0.08% of worldwide CO2eq.
  3. For the calculation of the carbon footprint from an investor perspective, we propose a two-pronged model. Depending on the business model or data availability, companies can either focus on the proportional network usage in bytes in relation to the Bitcoin blockchain growth during a specific time frame (transaction-based network usage) or on the number of Bitcoins held for a specific period (ownership-based network usage).
  4. An average Bitcoin transaction has a size of 670 bytes on the Bitcoin blockchain, representing an estimated carbon footprint of 369.49 kgCO2eq. Given a price of USD 50 per metric tonne of CO2eq, the compensation of one average Bitcoin transaction costs USD 18.47. We do not want this figure to be misinterpreted: One transaction can transfer single US dollars or hundreds of millions of US dollars. Also, companies such as crypto exchanges aggregate tens of thousands of users on a few Bitcoin wallets and only a small subset of transactions to the network may be conducted (e.g., daily net inflows or outflows). Evaluating the carbon footprint of Bitcoin transactions needs to be done in a very cautious way.
  5. Holding 1 Bitcoin over the analyzed period of one year equals a carbon footprint of 2.04 tCO2eq. Given a price of USD 50 per metric tonne of CO2eq, the compensation of holding 1 Bitcoin over one year costs USD 102.20.
  6. Companies could apply the above-mentioned approaches for transactions and owning Bitcoins to compute their carbon footprint they then should offset. As mentioned above, the specific business model needs to be considered for such computations. In the future, it can be expected that the results of such computations will need to be verified and audited by specialized service providers.

Transaction-based approach

Figure 1: Two-Pronged Flexible Carbon Footprint Calculation Model

Ownership-based approach

Carbon Footprint Analysis: Applying the Bitcoin Carbon Neutrality Investment Standard to Iconic Funds Physical Bitcoin ETP (ISIN: DE000A3GK2N1)




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Philipp Sandner

Philipp Sandner


Professor | Lecturer | Author | Investor | Frankfurt School Blockchain Center