An Analysis of Energy Consumption and Carbon Footprints of Cryptocurrencies and Possible Solutions
There is an urgent need to control global warming caused by humans to achieve a sustainable future. $CO_2$ levels are rising steadily and while countries worldwide are actively moving toward the sustainability goals proposed during the Paris Agreement in 2015, we are still a long way to go from achi...
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Zusammenfassung: | There is an urgent need to control global warming caused by humans to achieve
a sustainable future. $CO_2$ levels are rising steadily and while countries
worldwide are actively moving toward the sustainability goals proposed during
the Paris Agreement in 2015, we are still a long way to go from achieving a
sustainable mode of global operation. The increased popularity of
cryptocurrencies since the introduction of Bitcoin in 2009 has been accompanied
by an increasing trend in greenhouse gas emissions and high electrical energy
consumption. Popular energy tracking studies (e.g., Digiconomist and the
Cambridge Bitcoin Energy Consumption Index (CBECI)) have estimated energy
consumption ranges of 29.96 TWh to 135.12 TWh and 26.41 TWh to 176.98 TWh
respectively for Bitcoin as of July 2021, which are equivalent to the energy
consumption of countries such as Sweden and Thailand. The latest estimate by
Digiconomist on carbon footprints shows a 64.18 Mt$CO_2$ emission by Bitcoin as
of July 2021, close to the emissions by Greece and Oman. This review compiles
estimates made by various studies from 2018 to 2021. We compare with the energy
consumption and carbon footprints of these cryptocurrencies with countries
around the world, and centralized transaction methods such as Visa. We identify
the problems associated with cryptocurrencies, and propose solutions that can
help reduce their energy usage and carbon footprints. Finally, we present case
studies on cryptocurrency networks namely, Ethereum 2.0 and Pi Network, with a
discussion on how they solve some of the challenges we have identified. |
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DOI: | 10.48550/arxiv.2203.03717 |