Carbon Dots (CDs) have gained the attention of many researchers since its discovery in 2004 due to their unique nanostructure and properties. These are very promising carbonaceous nanomaterials having wide range of applications in sensors, imaging, energy storage, nanomedicine, electrocatalysis and optoelectronics. CDs have shown excellent physical and chemical properties like, high crystallization, good dispersibility and photoluminescence. Besides, these are now known to have excellent biocompatibility, long-term chemical stability, cost-effectiveness and negligible toxicity. Due to favourable physical structure and chemical characteristics, these nanocarbon-based materials have drawn an interest as supercapacitor (SC) electrode materials, opening upnew opportunities to increase the energy density and lifespan of SCs. Thus, variety of quick and affordable methods i.e., the arc-discharge method, microwave pyrolysis, hydrothermal method, and electrochemical synthesis have been developed to synthesize this versatile nanomaterial. There are undoubtedly many methods for creating CDs that are effective and affordable, but due to the safety and simplicity of synthesis, CDs made from waste or using environmentally friendly methods have been innovated. In order to devise sustainable chemical strategies for CDs, green synthetic methodologies based on "top-down" and "bottom-up" strategies have been prioritised. This review summarizes numerous synthetic strategies and studies that are essential for the creation of environment friendly processes for CDs. The recent developments in the use of CDs for photoluminescence and supercapacitance have been highlighted providing a clear understanding of the new source of energy and optoelectronic materials with a futuristic perspective.