Sustainability was not a primary concern when the first digital currencies were invented. The focus fell on creating a viable alternative to traditional financial instruments that would allow users to bypass central controls and intermediaries like banks and financial institutions.
So, the impact that these innovative products might have on the health of the planet wasn’t really a topic of interest in the beginning. But it wasn’t long until environmentalists took note of the energy-intensive nature of certain crypto projects, as they started gaining traction in the financial scene.
The push for green cryptocurrencies
Ever since Bitcoin came under fire for the large amounts of energy involved in its mining, digital currencies have been facing constant scrutiny and pressure in this respect. Green activists and sustainability advocates call on the industry to address these issues and adopt eco-friendly practices. Even coins that started off as internet jokes, like Dogecoin, haven’t escaped attention—especially as the Dogecoin price surged alongside increased mining activity.
The sustainability movement also led to shifts in investors’ preferences and behavior, increasing demand for environmentally responsible and socially conscious investments. For eco-conscious participants, performance and potential are not the only factors that matter when they evaluate their options. They also consider the carbon footprint of assets and factor in how their investments might affect the environment.
So, it’s not surprising that the rise of meme coins prompted concerns in this direction. As the creator and leader of this specific crypto category, Dogecoin (DOGE) received the brunt of the scrutiny, with more people becoming interested in its sustainability profile.
Dogecoin’s sustainability standing
It’s not easy to assess the sustainability level of different digital assets since there are multiple factors that come into play. Also, there’s usually not enough available information in this regard, and no benchmarks or standards in place on how to calculate emissions or energy use. However, we do have some data that can help us measure Dogecoin’s environmental score.
Dogecoin is the second-largest crypto that uses a Proof of Work (PoW) protocol, after market leader Bitcoin. PoW is a mechanism that implies solving complex encryption puzzles in order to reach consensus and validate transactions. This requires specialized hardware with high computational power, which naturally consumes a lot of energy. So, one would be tempted to believe that Dogecoin has an environmental footprint comparable to that of Bitcoin and Litecoin.
However, statistics show that Dogecoin ranks rather high in terms of sustainability, at least when compared to other PoW blockchains. According to the TRG Datacenters report, Dogecoin is one of the most eco-friendly digital currencies in the market, second only to XRP, judged by how many kilowatt-hours are consumed per transaction. Their measurements reveal that the meme coin uses around 0.12 kWh per transaction, while XRP consumes even less, at 0.0079 kWh per transaction.
By contrast, more established coins like Bitcoin and Ethereum have much higher energy usage, with 707 kWh, respectively 62.56 kWh per transaction. This is largely due to the fact that mining BTC is considerably more difficult than mining Dogecoin, since the latter has a smaller miner base and is used less frequently than Bitcoin.
Other evaluations provide different figures for this metric, with some sources stating that Dogecoin uses approximately 13.4 kWh per transaction. At the same time, Dogecoin’s annual energy consumption stands at around 3.71 TWh. This is quite a large number, but still considerably lower than the one registered by Bitcoin, estimated to be between 138 to 212 kWh.
Another research by data aggregator ForexSuggest shows that the dog-inspired meme coin recorded over 10,000,000 transactions in 2022, while using 40 times less electricity than Bitcoin. So, even though Dogecoin is not exactly an energy-efficient blockchain, its electricity usage and carbon footprint are certainly much lower than that of Bitcoin and Ethereum. This makes it more appealing for investors seeking crypto exposure while also maintaining their environmental impact as low as possible. While many argue that Dogecoin is devoid of any real value and has no redeemable qualities, the meme coin’s green credentials can serve as a counterpoint.
Dogecoin’s carbon emission became a topic of debate back in 2021, when Elon Musk, the meme coin’s most famous and ardent supporter, suggested that DOGE might be better suited than Bitcoin for Tesla-related transactions, criticizing the crypto frontrunner for consuming too much electricity.
On the path to green transformation
Although Dogecoin doesn’t meet the definition of a green cryptocurrency, it doesn’t mean it’s not making any progress in this area. So far, the meme coin has offset the equivalent of 7,117 trees, which is a good starting point for any crypto project looking to lower its environmental impact.
Dogecoin’s annual CO₂ emissions decreased by about 25% from 2021 to 2022. Furthermore, the network is also focused on making its mining process greener through strategic partnerships. Some mining operations tied to Dogecoin are exploring renewable‑energy power. For instance, last year, the sustainable energy solutions firm VivoPower announced that its subsidiary Caret Digital will start powering Dogecoin mining operations using renewable energy from hosting centers in Wisconsin and Oregon.
For the time being, Dogecoin is not among the worst offenders when it comes to environmental damage. Its CO₂ emissions are relatively low, especially when compared to those produced by Bitcoin. However, if the meme coin increases its mining capacity in the future, those greenhouse gas levels will also inevitably increase.
Dogecoin’s current structure and consensus mechanism are limiting its ability to greenify its operations. So, in order for Dogecoin to become a truly sustainable blockchain, it would have to make some fundamental changes to its architecture.
Whether Dogecoin will take more serious actions in this respect remains to be seen. The only thing we know for sure right now is that the demand for green cryptocurrencies is on the rise, so blockchain networks and systems that are environmentally friendly by design are more likely to thrive in the long run.
