Carbon footprint comparison of bitcoin and conventional currencies in a life cycle analysis perspective

Cryptocurrencies are a digital form of money based on the blockchain technology. Their relatively recent raise in popularity and use, together with the energy-intensive nature of some of their algorithms, has raised environmental concerns about growing energy consumption (and associated carbon dioxide emissions). This paper aims at comparing the environmental impact of the most common cryptocurrency (i.e., Bitcoin) and fiat currencies (i.e. coins, banknotes, credit and debit card networks). Such comparison is carried out assessing and analyzing the life cycle main phases of each currency in terms of carbon dioxide equivalent emissions. Results show that Bitcoin has a carbon footprint almost 4 to 5 times greater than the sum of all forms of traditional currency together in one year. Furthermore, environmental impact “hotspots” of fiat currency including raw material production of coins, transportation of banknotes and electric energy consumption of ATMs are identified. Finally, considering future scenarios and the sensitivity of various parameters on the results, some solutions are proposed to reduce the environmental impact of currencies.