Each year, Bitcoin generates about 22 megatons in CO2 emissions, the researchers estimate.
Cyptocurrencies such as Bitcoin depend on blockchain technology to confirm transactions like transferring funds.
However, this validation process uses “vast amounts of electricity,” which causes some serious carbon emissions, according to the study from researchers at the Technical University of Munich and Massachusetts Institute of Technology.
The researchers looked at effects of Bitcoin mining, which allows people to painstakingly earn cryptocurrency without spending any money.
To estimate the electricity consumption, the study authors used IP addresses and hardware data from recent IPO filings.
The authors wrote that their study points to potential drawbacks of blockchain technology that should be considered by policymakers.
“To improve the ecological balance, one possibility might be to link more mining farms to additional renewable generating capacity.”