Pathik Bhattacharya
    Pathik Bhattacharya

    Updated on January 16, 2023 01:42 PM

    Published on November 12, 2022 06:44 PM

    A sustainable cryptocurrency is one that consumes less or no energy and has a small carbon imprint.

    Source: Twitter

    “Sustain” + “Ability”, which means the ability of something (basically a system) to sustain or to withstand.

    In terms of Environmental Studies, “The avoidance of the depletion of natural resources to maintain the ecological balance is called Sustainability.”

    What is Sustainability in Cryptoverse?

    Cryptocurrency mining consumes a lot of electricity. While mining is only one way for validating cryptocurrency transactions and creating new crypto coins, it is the mechanism employed by Bitcoin, the most popular cryptocurrency.

    There is no direct way to determine the amount of energy consumed by Bitcoin and cryptocurrency mining, although the quantity may be calculated based on the network's hash rate and the consumption of commercially available mining rigs.

    The quantity of energy required to power the Bitcoin network is staggering: Tim Berners-Lee, the World Wide Web's creator, has described "Bitcoin mining" as "one of the most fundamentally meaningless methods of consuming energy."

    So, by the aforementioned arguments, it’s confirmed that “A crypto is considered to be ecologically sustainable if it consumes less natural resources in between transactions and generates less carbon footprint while doing so.”

    Why Crypto Mining Requires Intense Energy?

    The blockchain's method of securing and trusting transactions consumes a lot of energy. In fact, blockchains now account for 0.58% of worldwide electricity usage, with Bitcoin mining alone consuming nearly as much energy as the whole federal government of the United States.

    In a brief, The high energy consumption of crypto mining is a strength, not a flaw. Bitcoin mining is the automated method of confirming Bitcoin transactions in the absence of trusted third parties such as banks.

    The transaction validation procedure is built in such a manner that it consumes a lot of energy—the network relies on the processing capacity of thousands of mining devices. This reliance ensures the security of cryptocurrency blockchains based on proof-of-work consensus.

    This implies that while addressing sustainability and blockchain technology today, you must weigh the long-term systemic advantages against the immediate need to cut fossil fuel usage.

    How Crypto Mining Could Affect Environment?

    Bitcoins are not real cash hence new coins are "mined," or introduced into circulation, through a process that includes the use of mainframe devices to solve complicated mathematical problems. This procedure consumes so much energy that the Bitcoin network is expected to consume more energy than Kazakhstan and the Netherlands combined. 

    Furthermore, because fossil-fuelled power plants continue to dominate the global energy mix, Bitcoin mining can be criticized for contributing to the generation of greenhouse gases that cause climate change.

    According to Digiconomist, the Bitcoin network emits around 73 million tons of CO2 per year, which is equivalent to Turkmenistan's emissions. According to data through September 2022, Ethereum created an estimated 35.4 million tons of CO2 emissions before decreasing to 0.01 million tons after switching to proof of stake.

    Another issue is the amount of energy required for each transaction, which is enormous when compared to traditional credit cards: each Mastercard transaction, for example, is estimated to use only 0.0006 kWh (kilowatt hours), whereas each Bitcoin transaction eats up 980 kWh, enough to supply an average Canadian household for more than 3 weeks.

    This isn't only a Bitcoin issue. Almost every other cryptocurrency that uses the Proof-of-Work (PoW) consensus technique has a similar problem.

    Electronic Waste

    Cryptocurrency mining also creates a lot of electrical junk since mining hardware wears out rapidly. This is especially true for ASIC miners, which are specialized equipment built to mine minable cryptocurrencies. The Bitcoin network creates around 38 thousand tons of electronic waste every year, according to Digiconomist.

    Solution for Crypto Sustainability

    Despite all of the significant advantages, one of the major challenges that must be solved is the enormous energy consumption connected with the technology, and numerous organizations are working on solutions.

    The proof-of-stake (PoS) technique of authenticating cryptocurrency transactions and issuing new coins is a low-computing-power alternative to cryptocurrency mining. Instead, the ability to validate transactions and operate the crypto network is dependent on the amount of crypto that a validator has "staked," or committed not to trade or sell.

    Other Proof Consensus

    Other validation techniques are also being developed, such as proof of history, proof of elapsed time, proof of burn, and proof of capacity. While Ethereum's developers have decommissioned the blockchain's proof-of-work mechanism, estimates claim a 99.9% decrease in carbon emissions.

    In April 2021, three significant groups (the Energy Web Foundation, Rocky Mountain Institute, and the Alliance for Innovative Regulations) launched the Crypto Climate Accord, which is backed by organizations from the climate, finance, NGO, and energy sectors.

    The Accord's goal is to "decarbonize the industry in record speed" and attain net-zero emissions in the global cryptocurrency business by 2030.

    Examples of Sustainable Cryptocurrencies:


    Energy Consumption (in kWh)









    3-5 second




    4.4 sec

    0.001 ALGO



    40 sec




    46 sec



    Decentralization Sustainability (Opinion)

    In the above sections, we have talked about an ecological approach towards sustainability. Also, when we discussed electricity consumption due to mining, it could be put into a Technical aspect of sustainability. In our opinion, there’s a tertiary form of sustainability which the least number of people argue about. It is Ethical Sustainability.

    Decentralization is the core concept which drives cryptocurrency and serves its unique purpose of making the system more public and transparent. Decentralization means there should be no “Central entity” or “Middleman” going to interfere with the trade between a consumer and the service provider. 

    The concept of decentralization was made to distribute its ownership to the majority of nodes or validators avoiding a single entity or group taking control of the whole ecosystem.

    The aforementioned qualities make a system decentralised. However, the rupture of any one of the key aspects could cause the system to fail or make it unsustainable.

    The Rising Concern for Proof of Stake

    After switching from proof of work to proof of stake last month, Ethereum now depends on validators rather than miners to add new transactions to the network. These validators get to choose which transactions are included in each block and in what order.

    To know more about PoS check this blog post.

    This Proof of Stake consensus could lead to a state where it permits validators who have more funds to stake to be on the top of transaction blocks. For example, to become a validator on the Ethereum network one should have the minimum stake value of 32 ETH ( approx $40,328) which is not a silly buy. 

    This leads to one of the most often debated topics on many blockchain forums is the fact that Proof-of-Stake invariably leads to centralization.

    As a result, a larger stakeholder grows quicker than a smaller stakeholder. At some point, the cost of being a part of the mining operation would become too expensive, compelling minor players to withdraw, and resulting in centralization.

    This also leads to the fact that Decentralization is becoming more and more unsustainable.

    It’s not about environmental degradation but the degradation of the basic definition of Decentralization. 

    A Santiment data shows that after the Merge, only two addresses are responsible for 46.15% of the proof-of-stake nodes for storing data, executing transactions, and creating new blockchain blocks.

    Ahead of the Merge, the blockchain analytics company Nansen published research revealing that five firms control 64% of all staked Ether, with Coinbase, Kraken, and Binance accounting for over 30% of staked ETH. According to reports, the bulk of the 4,653 operational Ethereum nodes is in the hands of centralized web service companies such as Amazon Web Services (AWS).

    Liquid ETH Staking By Entity

    Source: Nansen

    These analytics shows that a certain number of entities hold the majority of staking power in the Ethereum system. Although the PoS is considered more secure and power efficient (as per Vitalik Buterin) the purpose it serves for decentralisation is getting more centralised. 

    PoS proponents, on the other hand, say that the method is more secure and economical than PoW. Ethereum co-founder Vitalik Buterin anticipated that the shift will not only reduce energy usage by roughly 95% but would also help grow the network, with transaction processing expected to be on par with centralized payment processors by the second half of 2023.


    As the Blockchain ecosystem grows so do the crypto networks. As the key sustainability factor lies in the mainstream reduction of carbon footprint and crypto mining hazard, a new opinion of sustainable decentralization should also be considered. 

    For the ending note, we could see several new updates in the proof consensus in the web3 space in the near future which may solve the sustainability issues more deeply.