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The Carbon Footprint of Bitcoin

19 Pages Posted: 21 Feb 2019 Sneak Peek Status: Published

See all articles by Christian Stoll

Christian Stoll

Massachusetts Institute of Technology (MIT) - Center for Energy and Environmental Policy Research (CEEPR)

Lena KlaaBen

Technische Universität München (TUM) - TUM School of Management

Ulrich Gallersdörfer

Technische Universität München (TUM) - TUM Software Engineering for Business Information Systems

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Abstract

Participation in the Bitcoin blockchain validation process requires specialized hardware and vast amounts of electricity, which translate into a significant carbon footprint. Here we demonstrate a methodology for estimating the power consumption associated with Bitcoin’s blockchain based on IPO filings of major hardware manufacturers, insights on mining facility operations, and mining pool compositions. We then translate our power consumption estimate into carbon emissions, using the localization of IP-addresses. We determine the annual electricity consumption of Bitcoin, as of November 2018, to be 48.2 TWh, and estimate that annual carbon emissions range from 23.6 to 28.8 MtCO2. This means that the level of emissions produced by Bitcoin sits between the levels produced by the nations of Jordan and Mongolia. With this article, we aim to gauge the external costs of Bitcoin, and inform the broader debate on the costs and benefits of cryptocurrencies. The externalities we discuss here may help policy-makers in setting the right rules as the adoption journey of blockchain has just started.

Suggested Citation

Stoll, Christian and KlaaBen, Lena and Gallersdörfer, Ulrich, The Carbon Footprint of Bitcoin (February 16, 2019). Available at SSRN: https://ssrn.com/abstract=3335781 or http://dx.doi.org/10.2139/ssrn.3335781
This is a paper under consideration at Cell Press and has not been peer-reviewed.

Christian Stoll (Contact Author)

Massachusetts Institute of Technology (MIT) - Center for Energy and Environmental Policy Research (CEEPR) ( email )

One Amherst Street, E40-279
Cambridge, MA 02142
United States

Lena KlaaBen

Technische Universität München (TUM) - TUM School of Management

Freising
Germany

Ulrich Gallersdörfer

Technische Universität München (TUM) - TUM Software Engineering for Business Information Systems

Arcisstrasse 21
Munich, 80333
Germany

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