Web3 CO2 Energy Index shows BTC’s carbon footprint

You could power a refrigerator for 11.86 months for the same amount of electricity as sending a single transaction on the BTC network. That’s quite an alarming statistic, especially if you’re evaluating which of those two technologies is more beneficial to civilization. A new online resource called the Web3 CO2 Energy Index compares the energy efficiency of different blockchain networks using the Bitcoin protocol, assigns star ratings to each, and can calculate the carbon footprint of individual transactions.

Questions about Bitcoin and blockchain’s environmental impacts aren’t going away. There’s no doubt that proof-of-work (PoW) blockchains are energy-hungry. However, the questions we should be asking are whether this energy use is worth the costs and if there are ways to make more efficient use of the energy consumed.

The Web3 CO2 Energy Index is a new initiative from SmartLedger. Its aim is to show how a PoW blockchain with greater utility and data throughput is a far more efficient and useful energy consumer than one that bottlenecks its transactions (or has only a single use case).

It can calculate the per-transaction carbon footprint of each PoW blockchain network by dividing its total mining hash rate by the hash rate of an S19 Antminer to estimate how many ASIC mining machines exist on the network. Using a formula that takes into account the S19’s average power consumption per second, the number of transactions a blockchain is processing per second, and the amount of CO2 emitted per kilowatt hour (kWh), it reveals just how much impact each transaction has.

A transaction on the BSV blockchain network currently creates 2.786kg of CO2 emissions. On the BCH network, it’s 101kg per transaction; on the BTC network, it’s… wait for it… a whopping 374kg.

That’s 374 kilograms of carbon dioxide— for a single BTC transaction. Think about that next time you send funds on BTC (you’ll have plenty of time to do so since BTC transactions may take a while to get out of the mempool queue). The Web3 CO2 Energy Index is also being pretty generous to BTC by calculating its throughput as 7 transactions per second, when in most circumstances it’s more like 4-5 transactions per second on the entire network.

Four to seven transactions per second on a global network is a ridiculously low number, even when you’re not thinking about energy consumption, but that’s another argument for another time. In this case, we’re only looking at energy efficiency or BTC’s complete lack thereof.

“@BSVBlockchain‘s network congestion is 0.001% of its maximum capacity, while #BTC‘s network congestion is 100% of its maximum capacity.” 👀

— Bryan Daugherty (@BWDaugherty) August 31, 2024

It’s all about the block sizes

BTC religiously maintains a transaction block size limit of around 1MB in data, which is the reason BTC transactions often take hours to complete unless you pay an exorbitant fee. On BCH, it’s slightly better, at 32MB. Central to BSV’s design philosophy, however, is its removal of transaction block sizes. There is no hard-coded maximum block size limit on BSV. Individual miners set their own limits, and it’s currently around 4GB per block (BSV’s largest block to date came in at around 3.8GB).

To summarize it all in simple terms, bigger blocks mean more transactions; more transactions mean more utility and use cases and more usage equals more efficient use of all that energy. The more you can use a blockchain network, the greater the benefits it can provide.

BSV’s vision for the Bitcoin protocol is that it should have more use cases than just sending “digital gold” to an exchange to swap it for dollars. Yes, it should be able to send payments (of any size or amount) near-instantly. It can create whole new economies based on micro- and even nano-transactions, each one a tiny fraction of a cent. It can record as much data as the internet, and secure it in a way that enables that data’s existence to be verified at any point in the future. It can power enterprise-tier applications or provide for other use cases, including asset tokenization, private records, contracts, media content, and social networks. It timestamps any kind of data in a way that gives the owners of that data provable ownership and control of their information.

Given all this, it becomes easier to understand how Bitcoin’s proof-of-work—if used responsibly—can offer enough benefits to justify its energy consumption. The BSV network is an example of responsible energy use. BTC’s “digital gold”/asset-trading model benefits only small groups of people, making its inefficiencies much harder to defend.

Watch Bryan Daugherty: Proof of ESG initiative through a sustainable blockchain