Methodology of Calculating Carbon Footprint of One Ether

Ether (ETH) is the cryptocurrency unit of the Ethereum blockchain network. For the purpose of establishing the default carbon footprint for one ETH transacted on the Cyberdyne Tech Exchange (CTX), this report describes the methodology for calculating carbon emissions of mining one ETH. The scope of the methodology is limited to the electricity consumed during ETH mining and the corresponding carbon emissions from generating and delivering the electricity. The methodology is based on the understanding of 1) the computational power required to mine a block for the Ethereum Blockchain, or the mining Difficulty, 2) the computational power provided by an average mining machine along with the electricity consumed to support the computation, and 3) the carbon emissions from generating the electricity. Data required for completing the calculations were gathered from various on-line sources and a previous study by CTX on Bitcoin’s carbon footprint. By applying this methodology, with the input of 1) the 2021 annual averages of mining Difficulty, 2) ETH rewards per block, 3) the electricity consumption rate per unit of computational power provided by an average ETH mining machine, and 4) default values of emission factor of the power grid and mining operation energy efficiency, annual averages of carbon emissions from ETH mining were calculated for 2015 to 2021. The 2021 (as of October 31) average of 3.3 tons tCO2e/ETH is used as the default value for all ETHs transacted on CTX. Market participants who obtained ETHs through more energy efficient mining can use a lower carbon emissions value as certified by an accredited third-party verifier. In addition, market participants will be able to issue on CTX an amount of Carbon Neutrality Tokens (CNTs) equal to the difference between the default emissions value and the certified lower emissions value.