Cryptocurrency mining is the primary contributor to CO₂ emissions, with Bitcoin mining operations alone consuming an estimated 140.38 TWh annually, according to a recent analysis by BestBrokers.
Depending on the energy sources used, this could result in up to 115 million metric tons of CO₂ emissions. This figure represents only a fraction of the total greenhouse gases produced by the cryptocurrency sector.
To gauge the environmental impact of cryptocurrencies, BestBrokers developed a method to calculate the electricity consumed per Bitcoin transaction. Additionally, they assessed the carbon footprint of the 20 most popular crypto exchanges by trading volume using the Website Carbon Calculator. Given the relevance of blockchain technology in the creation and use of NFTs (non-fungible tokens), the 20 largest NFT marketplaces by monthly trading volume were also examined for their CO₂ emissions.
Top Carbon Emitting Crypto Exchanges
P2B emerged as the leading contributor to CO₂ emissions among centralized cryptocurrency exchanges. With a daily trading volume of approximately $1.5 billion, P2B handles 200 different cryptocurrencies and fiat currencies and receives 11.4 million monthly visits. This heavy traffic results in the production of 5.38 grams of CO₂ per page view, translating to 736.3 metric tons of CO₂ annually. This emission level is equivalent to what 33,441 trees would absorb through photosynthesis.
To put this in perspective, P2B’s annual CO₂ emissions equate to the emissions from generating 1,920 MWh of electricity from coal, enough to charge 438,321 smartphones daily for a year or fully charge 33,447 Tesla Model Y cars.
Binance, the world’s largest centralized crypto exchange, also ranks high in CO₂ emissions. It generates 0.66 grams of CO₂ per page visit, resulting in approximately 519 million tons of CO₂ annually. Coinbase, another major exchange, produces 0.9 grams of CO₂ per page visit, leading to 441.7 tons of CO₂ emissions each year.
NFT Marketplaces and Their Carbon Footprint
While the environmental impact of NFTs has decreased since Ethereum’s transition to the less energy-intensive Proof-of-Stake mechanism in 2022, NFT marketplaces still contribute significantly to CO₂ emissions.
Rarible is the top emitter among the 20 NFT marketplaces analyzed, despite its relatively modest monthly trading volume of $1.18 million. With 976 thousand monthly visits and 10.43 grams of CO₂ per visit, Rarible is responsible for 122.13 metric tons of CO₂ annually. Blur, the largest marketplace by monthly trading volume, produces 13.18 tons of CO₂ per year, followed by Axie Marketplace with 7.82 tons. OpenSea ranks 7th, emitting 3.85 tons of CO₂ annually.
Methodology
The BestBrokers team analyzed the largest cryptocurrency exchanges based on daily trading volumes in U.S. dollars, sourced from CoinGecko. The carbon emissions per webpage visit of the 20 top exchanges were measured using the WebsiteCarbon Calculator.
For NFT marketplaces, data was sourced from DappRadar, focusing on monthly trading volumes. The CO₂ emissions for these platforms were also calculated using the WebsiteCarbon Calculator.
Electricity consumption for a full charge of a Tesla Model Y was determined using data from the EV Database, considering this model’s power consumption and range. The Tesla Model Y was chosen due to its status as the best-selling electric vehicle globally. All measurements were conducted in metric units, the standard for carbon dioxide emissions calculations.