Cryptocurrency and blockchain have revolutionised how we think about money, ownership, and digital trust. From Bitcoin to NFTs, the web3 movement has sparked innovation across finance, art, identity, and beyond. But with great innovation comes a growing question: what is the environmental cost?

You may have seen headlines like “Bitcoin uses more energy than entire countries” or “NFTs are melting the planet.”While these may sound dramatic, they’re rooted in real concerns about the energy consumption and carbon footprint of crypto networks.

In this article, we break down the issues and explore what’s being done to address them.

At the heart of most crypto systems is the blockchain — a decentralised ledger that records every transaction. To keep these blockchains secure, networks like Bitcoin use a method called proof-of-work (PoW).

In PoW, powerful computers race to solve complex puzzles and “mine” the next block in the chain. It’s secure, but it’s also energy-intensive.

• Bitcoin alone consumes around 91 terawatt-hours (TWh) of electricity annually — more than Finland and comparable to Argentina Cambridge Bitcoin Electricity Consumption Index.
• If Bitcoin were a country, it would rank among the top 30 in electricity use globally.
• Much of that energy still comes from fossil fuels like coal and gas, especially in places like Kazakhstan or Texas where mining is popular.

As the price of Bitcoin rises, so does the incentive to mine — which often increases emissions unless clean energy is used.

Thankfully, newer blockchain technologies are far more efficient. The biggest shift came when Ethereum — the second-largest blockchain — moved from PoW to proof-of-stake (PoS) in September 2022.

This change, called The Merge, reduced Ethereum’s energy use by 99.95%, according to the Ethereum Foundation.

Consensus Type   Energy Use               Mechanism                                                     Examples

Proof-of-Work        Extremely high          Solving puzzles with computing power      Bitcoin, Litecoin

Proof-of-Stake        Ultra low                      Validating based on token holdings.            Ethereum, Cardano

Other blockchains like Algorand, Solana, and Tezos were designed from day one to use PoS or similar methods — drastically reducing emissions.

Web3, NFTs, and AI: The Bigger Digital Picture

Crypto doesn’t exist in a vacuum. It’s part of the growing Web3 movement, which includes everything from decentralised finance (DeFi) and digital collectibles to virtual worlds and DAOs (decentralised autonomous organisations).

While these innovations are exciting, they also consume energy:

• NFTs minted on PoW networks used to require massive amounts of computing resources.
• Web3 apps run on decentralised cloud platforms or blockchain nodes that must stay online 24/7.
• AI models, which are increasingly used in crypto (e.g., trading bots, automated DAOs), require significant training power — sometimes equal to the lifetime emissions of five cars per model MIT Technology Review.

This brings up an important question: Can the crypto-AI-Web3 stack become sustainable?

Enter Green Crypto: Sustainable Projects Making a Difference

While the early days of blockchain weren’t environmentally friendly, the narrative is shifting. Many new blockchain projects now embrace sustainability as a core value.

Here are a few examples:

• Ethereum – Now runs on PoS, using less energy than Netflix streaming Ethereum Foundation.
• Algorand – A carbon-negative blockchain that partners with ClimateTrade to offset emissions Algorand Sustainability.
• Cardano – Efficient by design and supports social impact causes.
• Chia – Uses unused disk space (“proof-of-space”), but raises some concerns around e-waste.

These green chains allow users and developers to build without contributing to energy-intensive mining.

ReFi: Crypto That Heals the Planet

Beyond reducing harm, some crypto projects are trying to actively restore the environment. This movement is called ReFi, or Regenerative Finance.

ReFi uses blockchain to support sustainability initiatives like:

• Reforestation
• Carbon offsetting
• Community resilience
• Water and biodiversity conservation

Leading ReFi Projects:

• KlimaDAO – Uses crypto to buy real carbon credits and make them tradable and transparent.
• Toucan Protocol – Bridges traditional carbon markets to the blockchain.
• Celo – A mobile-first blockchain committed to carbon neutrality and local economic empowerment Celo Environment.

These projects aren’t perfect, but they’re a step toward using decentralised tools to tackle real-world environmental issues.

Regulators Are Starting to Pay Attention

As crypto matures, regulatory scrutiny is increasing — especially in the European Union, United States, and parts of Asia.

• The EU’s Markets in Crypto-Assets (MiCA) regulation will require crypto platforms to disclose environmental impacts.
• Climate-focused asset managers are demanding greater transparency before including crypto in ESG portfolios.
• The World Bank and United Nations have explored using blockchain for sustainable development financing.

Regulation, when done right, can push the industry toward greater accountability and cleaner practices.

So, can crypto be green?

Yes — but it takes conscious choices.

The industry is moving in the right direction:

• Ethereum’s switch to PoS was a historic shift.
• New blockchains are being built with climate in mind.
• Galahad and other platforms are adopting low-footprint technologies from the start.
• ReFi, green DAOs, and on-chain carbon credits are giving Web3 real-world purpose.

At the same time, the crypto community — users, developers, investors — must stay vigilant. Innovation is not enough; accountability and impact matter too.

The good news? Crypto doesn’t have to be a climate villain. With the right incentives and technology, it can become a powerful tool for sustainability.