Lately, there's been a lot of talk about how much energy Bitcoin (BTC) uses. Some have even ventured to claim that BTC's energy usage alone could be responsible for a 3ºC increase in global temperatures—an unlikely scenario. In such a polarized debate, it's hard to cut through the noise and find solid data. That's why we wanted to share Canopi's preliminary findings. (Check out our Climate API to get data on a daily basis).

At Canopi, we're focused on the amount of CO2e that BTC produces, not just on its energy use. The rationale is simple: if 100% of the energy used came from renewable sources, its impact on the planet would be minimal. Of course, the hard part about any cryptocurrency is figuring out what percentage of energy comes from renewables. The answer isn't simple, because miners don't have to disclose this data. Based on publicly disclosed data, we believe that on average 30-40% of Bitcoin is mined with renewables.

Key data points:

As we note in our explainer, it's important to allocate emissions on a per-transaction because it allows companies to account for their Scope 3 carbon footprint. This way companies that benefit from on-chain crypto transactions are absorbing the real cost of using the crypto network.

Note on the Growing Use of Renewable Energy in Mining Operations

We are excited about the growing use of renewable energy in Bitcoin mining. We hope that recent announcements by mining operators generate additional momentum towards fossil-fuel-free operations.

As we discuss in our methodology post, the amount of renewable energy being used in mining operations is hard to ascertain, but it likely ranges between 40-80%. The most reputable figures today come from CCAF and CoinShares, respectively. We encourage readers to engage with these sources. Canopi is working to shed additional light on the matter.

A few noteworthy points on this discussion:

What can you do to build clean crypto?

We know that many crypto companies, especially early-stage startups, are resource-constrained. They need to focus on growth. That's why Canopi helps companies put climate on autopilot.