25 May 2021 11:06 AM +00:00

Dogecoin environmental impact: Is Dogecoin bad for the environment?

When Elon Musk announced Tesla would no longer support Bitcoin as a payment method, the CEO cited the "rapidly increasing use of fossil fuels for Bitcoin mining and transactions" as the reason for the decision.

Musk also said: "We are also looking at other cryptocurrencies that use <1% of Bitcoin's energy/transaction."

Given Musk's previous support for Dogecoin - a meme cryptocurrency that has recently surged in price and popularity - could this cryptocurrency be an environmentally friendly alternative?

Dogecoin Energy Consumption

According to data from TRG Datacenters, Dogecoin uses 0.12 kWh of energy per transaction. This puts it among the cryptocurrencies that consume the least energy. In comparison, Bitcoin and Ethereum consume 707 kWh and 62.56 kWh per transaction, respectively.

XRP, Chia and IOTA are ranked above Dogecoin in terms of environmental impact. These currencies consume 0.0079 kWh, 0.023 kWh and 0.00011 kWh per transaction, respectively.

However, as explained by Leafscore, Dogecoin's environmental impact is contested because of the setup of its mining algorithm. Dogecoin uses an Auxiliary Proof-of-Work (AUXPoW) algorithm. This allows miners to mine Dogecoin alongside other cryptocurrencies based on the same blockchain.

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This means it is difficult to assess the total energy consumption of Dogecoin accurately if researchers attribute its energy consumption to another mined cryptocurrency.

But was Dogecoin intended to be an environmentally friendly cryptocurrency? It doesn't appear so.

Responding to a question on Twitter as to whether he considered the energy consumption of Dogecoin when creating the currency, Dogecoin's co-creator, Billy Markus, said: "I made doge in like 2 hours I didn't consider anything."

Markus did, however, reply to Musk's tweet announcing the ending of Bitcoin support, highlighting the advantages of Dogecoin.

At this point, it's impossible to say whether Tesla will accept Dogecoin on the basis of its energy consumption. However, Musk has expressed an interest in helping the currency become more environmentally friendly, tweeting: "Working with Doge devs to improve system transaction efficiency. Potentially promising."

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[Featured Photo by Executium on Unsplash]