Methodology of Calculating the Carbon Footprint of One Bitcoin – April 2021
This report summarizes the methodology of calculating the carbon footprint of one bitcoin and explains the default carbon footprint of each bitcoin to be traded on CTX. Based on the current prevailing mining process and under the guidance of international standards for carbon emission quantification (e.g., ISO 14046, ISO14047, etc.), the carbon emission of one bitcoin is the product of i) the power of the mining machine used (W), ii) the energy efficiency of the mining data center (PUE), iii) the emission factor of the power for the mining machine (tCO2e/MWh), and iv) the time needed to mine the bitcoin, given the computational power of the mining machine (TH•s-1) and the estimate of the average number of bitcoins that can be mined in a day (24 hours) with one unit of hashing power (1 TH•s-1) at the time of mining (typically expressed as Pay Per Share, BTC•day-1 per TH•s-1). Referenced to data in January 2021 and taking a median approach on mining machine energy efficiency and a conservative approach on the emission factor of the power sources, the default carbon footprint for one bitcoin is set to be -170 tCO2e on CTX. For miners with bitcoins of varying carbon footprints, once the carbon emission of the bitcoin is certified by a third-party verification and certification organization, the miner can issue the difference between the default carbon footprint and the actual certified carbon footprint as a corresponding number of Carbon Neutrality Tokens (CNT) to reflect its more energy efficient mining process.