Trading one bitcoin emits as much CO2 as a household in three weeks

©  AFP

A transaction in bitcoin causes the same amount of CO2 emissions as an average household in about three weeks. The Dutch central bank – De Nederlandsche Bank (DNB) – has calculated this in a new study to better map the climate impact of the financial sector.

Source: BELGIAN

Thursday, January 13, 2022 at 08:20

Bitcoin works on the basis of blockchain technology, a kind of collective log in which all participants together keep track of all transactions. That register is updated every ten minutes with a new ‘page’ with the latest changes. To safely handle each addition, a complex mathematical formula must be solved. Worldwide, special computer systems are used all day long to puzzle over what costs a lot of energy. This also produces new bitcoins and is therefore called mining.

According to DNB’s research results, every bitcoin transaction in 2020 was estimated to account for 402 kilos of CO2. This is comparable to two thirds of the monthly emissions of an average Dutch household. DNB also notes that the climate impact per bitcoin transaction is showing an upward trend. In 2020, CO2 emissions per transaction were about a third higher than a year earlier.

computing power

According to the experts of the central bank, this increase is mainly the result of the growth in the required computing power of the bitcoin network. The price of bitcoin also plays an important role. As the value of the cryptocurrency rises, it attracts more miners, who then use more electricity to mine cryptos.

The enormous energy consumption of bitcoin transactions has been a thorny issue for some time. Last year, the fuss about the environmental impact of the crypto currency for electric car manufacturer Tesla was a reason to stop accepting bitcoin as a payment method after less than two months. Regulators are also concerned about the impact on the climate. DNB points out that Sweden’s financial regulator has recently come out in favor of an EU ban on the energy-intensive mining process of some cryptos. That included Bitcoin.


Commercial break:
Curious about your personal impact on the climate? Take the test now newspaper shop and calculate your carbon footprint


Leave a Reply