July 14, 2023

Bitcoin Accounts for 90% of Annual Electricity Consumed by Top 40 Cryptocurrencies



CCData collaborated with CCRI in issuing the first benchmark, which assesses the Environmental, Social, and Governance (ESG) risks and opportunities associated with 40 of the largest and most liquid digital assets.

The benchmark used qualitative and quantitative metrics to offer a unique lens through which digital assets can be evaluated for ESG exposure, covering 11 core evaluation categories, including fundamentals, electricity consumption, climate impact, transparency, and community engagement, according to 24/7 Wall St website.

Each digital asset is ranked a grade ranging from AA to E based on its compliance with ESG criteria. Digital assets, which are graded from AA to BB, meet minimum thresholds for ESG risk, while the lower tier is for digital assets which are graded from B to E.

The ESG Benchmark found that Bitcoin accounts for 90% of the annual electricity consumed by the top 40 cryptocurrencies as the cryptocurrency consumes more than 100 terawatt-hours (TWh) per year. Bitcoin received a B grade.

“Although Bitcoin ranks second in Social, and fourth in Governance, it ranks last in Environmental due to heavy electricity consumption and the carbon intensity of the electricity it utilizes, amongst other environmental externalities,” the report said.

However, Ethereum, the second largest cryptocurrency, was the only cryptocurrency that received an AA grade, followed by Solana and Cardano. Cryptocurrencies of Solana, Cardano, and Binance Coin, got an A grade.

According to the report, 34 out of the 40 cryptocurrencies have much lower electricity consumption, typically not exceeding 10 GWh annually.

The report also found that 62.5% of the analyzed assets have a carbon intensity of electricity usage that is lower than the current global average of 459 gCO₂/kWh and the top 10 wallets control 50% or more of the token supply for 20% of the analyzed assets.

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