ESG data for bitcoin

This page provides sustainability indicators for bitcoin, including data on the estimated energy consumption, the share of renewable energy, the energy intensity and the greenhouse gas emissions of the network.

The bitcoin consensus mechanism: Proof of Work (PoW)

Bitcoin uses the Proof of Work (PoW) consensus mechanism to validate transactions and secure the network. Within this system, miners compete to solve complex cryptographic calculations. This process requires specialised hardware and energy consumption.

The first miner to find a valid solution adds a new block of transactions to the blockchain. In return, the miner receives a reward in the form of newly created bitcoin (the block subsidy) and transaction fees paid by users.

In addition, nodes (devices running bitcoin software) independently verify the validity of transactions and blocks. Nodes follow the blockchain with the greatest accumulated Proof of Work. This results in one shared and consistent version of the blockchain. This mechanism helps prevent double-spending and contributes to the security of the network.

Incentive mechanisms and applicable fees

Bitcoin's incentive structure is designed to encourage miners to process transactions and secure the network. Miners receive a combination of the block subsidy and transaction fees paid by users to have transactions processed on the network.

The block subsidy decreases periodically through the so-called halving, which takes place approximately every four years. As a result, the number of new bitcoins entering circulation is reduced. As the block subsidy continues to decline, transaction fees are expected to play an increasingly important role within bitcoin's incentive model.

Users are able to determine the transaction fees they are willing to pay. During periods of increased network activity, transactions with higher fees are generally processed more quickly by miners. This market mechanism contributes to an efficient allocation of available block space and supports the long-term security and continuity of the network.

Energy consumption sources and methodologies

The energy consumption of this asset is aggregated across multiple components: For the calculation of energy consumptions, the so called 'top-down' approach is being used, within which an economic calculation of the miners is assumed. Miners are persons or devices that actively participate in the proof-of-work consensus mechanism. The miners are considered to be the central factor for the energy consumption of the network. Hardware is pre-selected based on the consensus mechanism's hash algorithm: SHA-256. A current profitability threshold is determined on the basis of the revenue and cost structure for mining operations. Only Hardware above the profitability threshold is considered for the network. The energy consumption of the network can be determined by taking into account the distribution for the hardware, the efficiency levels for operating the hardware and on-chain information regarding the miners' revenue opportunities. If significant use of merge mining is known, this is taken into account. When calculating the energy consumption, we used - if available - the Functionally Fungible Group Digital Token Identifier (FFG DTI) to determine all implementations of the asset of question in scope and we update the mappings regulary, based on data of the Digital Token Identifier Foundation. The information regarding the hardware used and the number of participants in the network is based on assumptions that are verified with best effort using empirical data. In general, participants are assumed to be largely economically rational. As a precautionary principle, we make assumptions on the conservative side when in doubt, i.e. making higher estimates for the adverse impacts. To determine the energy consumption of a token, the energy consumption of the network(s) lightning_network is calculated first. For the energy consumption of the token, a fraction of the energy consumption of the network is attributed to the token, which is determined based on the activity of the crypto-asset within the network. When calculating the energy consumption, the Functionally Fungible Group Digital Token Identifier (FFG DTI) is used - if available - to determine all implementations of the asset in scope. The mappings are updated regularly, based on data of the Digital Token Identifier Foundation. The information regarding the hardware used and the number of participants in the network is based on assumptions that are verified with best effort using empirical data. In general, participants are assumed to be largely economically rational. As a precautionary principle, we make assumptions on the conservative side when in doubt, i.e. making higher estimates for the adverse impacts.

Key energy sources and methodologies

To determine the proportion of renewable energy usage, the locations of the nodes are to be determined using public information sites, open-source crawlers and crawlers developed in-house. If no information is available on the geographic distribution of the nodes, reference networks are used which are comparable in terms of their incentivization structure and consensus mechanism. This geo-information is merged with public information from Our World in Data, see citation. The intensity is calculated as the marginal energy cost wrt. one more transaction. Ember (2025); Energy Institute - Statistical Review of World Energy (2024) - with major processing by Our World in Data. “Share of electricity generated by renewables - Ember and Energy Institute” [dataset]. Ember, “Yearly Electricity Data Europe”; Ember, “Yearly Electricity Data”; Energy Institute, “Statistical Review of World Energy” [original data]. Retrieved from https://ourworldindata.org/grapher/share-electricity-renewables.

Key GHG sources and methodologies

To determine the GHG Emissions, the locations of the nodes are to be determined using public information sites, open-source crawlers and crawlers developed in-house. If no information is available on the geographic distribution of the nodes, reference networks are used which are comparable in terms of their incentivization structure and consensus mechanism. This geo-information is merged with public information from Our World in Data, see citation. The intensity is calculated as the marginal emission wrt. one more transaction. Ember (2025); Energy Institute - Statistical Review of World Energy (2024) - with major processing by Our World in Data. “Carbon intensity of electricity generation - Ember and Energy Institute” [dataset]. Ember, “Yearly Electricity Data Europe”; Ember, “Yearly Electricity Data”; Energy Institute, “Statistical Review of World Energy” [original data]. Retrieved from https://ourworldindata.org/grapher/carbon-intensity-electricity Licenced under CC BY 4.0.