The carbon footprint of Bitcoin has drawn wide attention, though Bitcoin’s long-term impact on the climate remains uncertain. In this paper, we present a framework that leverages some fundamental concepts in energy economics and finance to overcome uncertainties in previous estimates and project Bitcoin’s worldwide electricity consumption and carbon footprint in the long-term. If Bitcoin’s future market capitalization growth rate in the long-term is assumed to fall within the range of historical growth rates of several comparable mainstream financial assets, we find that the annual electricity consumption of Bitcoin may increase from 190 to 7,500 TWh between 2021 and 2100. The future carbon footprint of Bitcoin strongly depends on the decarbonization pathway of the electricity sector. If the electricity sector achieves carbon neutrality by 2060,Bitcoin’s annual carbon footprint will peak in 2023, with cumulative emissions of about 1 GtCO2 by 2100. However, in the business-as-usual scenario, emissions sum to a staggering 30 GtCO2 through 2100—the equivalent of total global emissions from 2019. In light of these results, we discuss implications for policy in reducing Bitcoin’s future carbon footprint.
Keywords Bitcoin, Electricity consumption, Emissions, Policy implication