It's known that bitcoin has a high carbon footprint [1].

Some have started to compare the environmental footprint of a bitcoin transaction and a standard visa transaction [2].

What is the carbon footprint of traditional cash? Is cash the most sustainable money?

[1]: One Bitcoin Transaction Now Uses as Much Energy as Your House in a Week

[2]: A Single Bitcoin Transaction Takes Thousands of Times More Energy Than a Credit Card Swipe

  • How would you measure this? Do you want to consider the carbon footprint of the nation-state w/ its military force that is required to lend value to fiat currency? Nov 8, 2017 at 12:08
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    I suppose you would need to figure out the carbon footprint of the manufacture of the actual physical cash and then add to that the carbon footprint of its transportation and storage. Metal coins would seem to have a larger initial carbon footprint over paper money but then paper money tends to have other materials such as plastics embedded within it. Transportation would be a factor as large amounts of money are heavy. Nov 8, 2017 at 13:29
  • @Jean-PaulCalderone: I think it reasonable of the questioner to hope that answers will analyse such considerations and give reasons why one should or should not take them into account. There may then still be an element of opinion as to whether to do so, but an open-minded person should understand the problem better and be able to make a better decision.
    – PJTraill
    Nov 15, 2017 at 11:48
  • Indeed, the understanding of the problem requires an analysis of how to measure or estimate it in a relevant manner. Nov 16, 2017 at 9:14
  • Unlike "good old cash", If you are interested in looking at the extreme energy use just from mining Bitcoin, you may like to review this link from the University of Cambridge: cbeci.org - I recently heard that the energy currently used to mine Bitcoin in a year exceeds the energy used by the entire nation of Sweden for the same period. I haven't verified that claim, but the energy used by "mining" is clearly extreme. May 14, 2021 at 8:16

5 Answers 5


Very low.

I'm going to use manufacturing costs as a proxy for environmental footprint. This is realistic up to the point that ignores extrinsic costs, and ignores financial costs. E.g. making the paper can be done with essentially no carbon foot print, or a fairly large one. In general I regard costs as being a good first order proxy, unless you can show some unusual circumstances.

The bitcoin calculations have to be redone on a transactional basis. Suppose that this was cheap and only took a kWh of electricity. Then the cost per transaction, ignoring equipment would be on the close order of 10 cents.

A debit card transaction typically costs the merchant 15 to 35 cents. The biggest part of this is to the company that runs the database. The non-material costs are a large fraction of this. (Where my proxy breaks down...) E.g. Database, data centre, are all manufactures that need to be amortized over all the transacations, but advertising, marketing both to customers and to merchants, dispute handling. I will arbitrarily call the cost of this transaction 1/2 of the merchant fee at 10-20 cents.

Credit cards, for reasons I don't know, are much more expensive for the merchant. Partly fraud, partly borrowed money, mostly making credit card companies wealthy. There is no intrinsic reason for it to be different from debit card. This difference is another example of monetary cost not being a good proxy for footprint.

While a dollar bill costs money to make, it will be used in hundreds of transactions before being retired as worn out. And a 20 dollar bill costs about the same as a one dollar bill to make. (The Fed's website says 5 to 20 cents for a paper bill. The $50 is the most expensive to produce.)

Reference: https://www.federalreserve.gov/faqs/currency_12771.htm

Bills last 5-20 years, with higher denominations lasting longer, as they are often used to 'store' value.

Figure that a bill on the average is taken out of a bank machine, and likely spent within two weeks. The shop keeper deposits it. So there is two transactions. Buyer to shop keeper, shopkeeper to bank. If it's a smaller bill, it has about a 50% chance of being used for making change, I'm guessing. So call it 5 transactions per month. 5 years then means a bill is used in about 300 transactions. This is a sloppy estimate. Could be as low as 100. Might be as much as a thousand.

Coins often cost more to make than their face value (especially true for small value coins) but a coin will be used for thousands of transactions. The penny costs 1.6 c to make, the nickle 8.5 c, according to an article in the washingtoon post. The others cost less to make than their face value.

Reference: https://www.washingtonpost.com/news/wonk/wp/2014/12/15/it-cost-1-7-cents-to-make-a-penny-this-year-and-8-cents-to-make-a-nickel/?utm_term=.5fb440d6c1c2

According to the Royal Mint, british coins have an average life span of 40 years. No details about how they got this figure. In particular I don't know if they correct for the increased number of coins in circulation.



Very high.

Cash needs to be transported. Transportation is the biggest evil. For example, it is almost always better to work remotely than to travel to your workplace (unless you live very near; most don't). Card payments are electronic. Nobody needs to haul around the cards in a minivan.

Not only that, but cash use reduces; the need to do regular transportation to haul a diminishing amount of cash doesn't. In contrast, Moore's law is continuously reducing the environmental impact of computer systems. A server of today is more powerful than a server of yesterday, and uses less electricity.

Newspaper source: https://www.bloomberg.com/news/articles/2018-10-16/pick-card-payments-over-cash-and-the-environment-will-thank-you and original source: https://www.dnb.nl/binaries/Working%20paper%20No.%20610_tcm46-379441.pdf

  • The specific question is "compared to bitcoin", so "very high" presumably puts cash as using more energy than, say, the USA. Right now BitCoin mining alone (no other BitCoin-related consumption) puts it ~20 in the world if it was a country. As always on SE, actual numbers would greatly improve your answer. en.wikipedia.org/wiki/…
    – Móż
    May 17, 2021 at 6:34

These people who have answered are ignoring some major factors in cash production. Mining the metals for coins, with the trucks, transportation of materials, disposal of waste, facilities to process, smelting, and so on on a micro level have an enormous impact. If not using recycled paper, or only a portion of recycled paper, consider the deforestation impact, transportation of materials from both recycling facility and paper processing plants, the facilities/plants themselves, the workers in all of these situations driving to and from their jobs, all have environmental impacts.

This isn't even to begin considering what it takes to transport the currency to banks, the cost/impact of having a bank on every street corner, again arriving at employees' traveling to/from work, and the very obvious travel of customers to/from the bank sites to do business as well as the plastics produced from their bank-issued debit/credit cards (and the facilities necessary to make them).

When considering a carbon footprint, failing to account for ALL aspects of the footprint gives you only a portion of the truth. While, yes, Bitcoin and other cryptocurrencies appear to have a higher up front impact on the environment, the truth is that the entire impact of Bitcoin is accounted for whereas analysts have repeatedly failed to link all carbon processes to the footprint of fiat currencies. It's a no-brainer that cryptocurrencies are the greener option.

If it was only about emissions, you'd have an easy time answering. But it's not. Fiat currencies have been the cause of recessions, on average, every 5.6 years because actual currency production affects the economy overall. They're a means to control inflation in a boom-bust capacity and have historically led to some of the worst crises in human history. Cryptocurrency, in my opinion, is by far the more stable, efficient, and globally-friendly option and the future of currency on a global scale.

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    The bitcoin analyses likewise fail to consider the impact of building bitcoin miners, running exchanges, and so on, right through to the impact on countries of the tax evasion, money laundering and drug dealing that bitcoin is explicitly designed to facilitate.
    – Móż
    May 21, 2021 at 2:17

(This is not meant to be a full answer but rather a complement to the other answers).

When evaluating the carbon footprint of any form of money you don't only need to look at the economic and environmental cost of manufacturing units of currency (cash), specially in occidental societies who are converging towards chashless economies. Instad, you need to look at the cost of securing accounts and transactions.

In decentralized, digital networks (eg. bitcoin) the security cost is mainly given by the cost of the consensus protocol (ie. mining—but there are other more environmental-friendly alternatives like Proof-of-stake).

With fiat money, the security cost relates to:

  • Defense (ie. maintaining an army that protects your economy from external threats as well as the militar and political cost to keep a "healthy" international trade balance and avoid an international crisis that would plunge the currency).
  • The coercive power required to keep a stable institutional system (without which central banks wouldn't work)
  • Security costs required to protect bank vaults and the data centers that handle electronic transactions and keep customer account records.
  • The cost of transporting cash, banknotes, etc., securely.

I'd love to put some numbers to all of this, but that would probably take a lot of time.

  • 1
    Bitcoin is even more reliant on state-provided security than cash, though, since it is dependent not just on the physical security of the miners and exchances, but also on the security of the internet and other communications infrastructure that make it usuable, and the whole chain of production that leads to unbiquitous computing. We can use cash during a local power cut, for example, but we can't use bitcoin.
    – Móż
    May 15, 2021 at 22:51
  • The big difference is that the internet as a whole relies on infrastructure that is provided by multiple states/companies. A significant part of the world's economy runs on the internet and the marginal cost of securing bitcoin in it is arguably negligible. Also, bitcoin doesn't break as a system if the internet goes down; it can still operate over satellite networks (in the same way as other internet services).
    – vaz
    May 16, 2021 at 13:34
  • Multiple states provide cash, though. And the idea of satellite internet without internet is fun. Think about what would happen if China shut off all internet through its borders, for example. Somewhere between 10% and 50% of miners would drop out (depending on whose stats you believe), and likely a smaller but non-zero proportion of buyers.
    – Móż
    May 17, 2021 at 6:27
  • Sure, if the USD collapses, you can just use EUR in the US, in the same way as other countries like Argentina use USD. What I wanted to point out here is that the stability of fiat relies heavily on a single state. > And the idea of satellite internet without internet is fun This is not what I meant. The important point is that Bitcoin as a protocol can operate over different link layers. China shutting down internet in its border is a known risk, so most Bitcoin miners are already equipped with satellite gateways (like blockstream.com/satellite).
    – vaz
    May 17, 2021 at 8:29
  • Anyway, my intention with this answer was to show that fiat money, in the way it works in countries like the US, has also huge impacts. Bitcoin and other PoW networks are probably worse in terms of carbon footprint, and their decentralised nature make them virtually unstoppable, which is also concerning. There are also some features that fiat money has and cryptocurrencies haven't (eg. high throughput), and vice versa (eg. smart contracts). So I'm not sure at what point it makes sense to compare them. Furthermore, it's extremely difficult to provide a quantitative analysis of both.
    – vaz
    May 17, 2021 at 8:41

From my quick skim of the above, none of these seem to take into account the water, paper, ink, and toxic waste created. The energy burn for each of these processes and the amount of time if ever it takes for this waste to degrade enough to be able to use the land it’s stored in. The problem any analysis is that the user chooses only a few parts of the argument that for their narrative or make their rival look bad.

  • 1
    You'd also need to take into account the ewaste from bitcoint mining, and the electricity production footprint since a lot of mining is done using coal power rather than hydro etc. But all analysis involves setting boundaries, so while we can argue about which are appropriate it's not reasonable to dismiss a particular analysis simply because it has boundaries.
    – Móż
    May 15, 2021 at 22:48

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