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Bitcoin has seen a historical boom over the last 12 months. Now, the eyes of the world have turned towards the largest cryptocurrency. The unprecedented surge has already attracted investments from the world’s most powerful companies. However, Bitcoin opponents are becoming more vocal, too. Besides concerns about the unregulated crypto market, another Bitcoin-related red flag came into focus lately.
More and more notable individuals are expressing their worries about Bitcoin’s carbon footprint. Among others, Bill Gates recently spoke on the potentially damaging effect Bitcoin can have on climate change. He noted that BTC transactions use more electricity than any other available method. Recent studies reveal that carbon emission from Bitcoin mining is equal to the amount emitted by the whole of Argentina. Digiconomist, the creator of the Bitcoin Energy Consumption Index, also provided some worrying data.
All of this raises a question that could decide the future of Bitcoin. A lot of major investors’ money has been going towards companies that are known for their environmental and social awareness. If Bitcoin is deemed a significant threat to the environment, will they be willing to invest in companies that dabble in the largest cryptocurrency? Laurence Fink, BlackRock’s CEO, said that they will evaluate their future investments, in big part, on how they will meet climate change. Lately, investors have been requesting companies to release their carbon footprint. A group named Task Force on Climate-Related Financial Disclosures is developing a global standard on this matter.
They have been mainly building their image as pro-environment companies. But, all of them have joined the Bitcoin trends. PayPal announced they will allow Bitcoin transactions on their platform. Five percent of the cash reserves of Square, founded by Jack Dorsey, are in Bitcoin. Tesla is a company that built its whole brand on reducing climate change. Just a few weeks ago they invested over $1.5 billion in Bitcoin. Plenty of other major market players are following the suit, too. It remains to be seen whether climate concerns will affect future investments
They’re also proposing solutions on how to deal with this issue in the future. This mainly includes powering Bitcoin mining completely with green energy resources. At the moment, two-thirds of Bitcoin mining takes place in China and Mongolia. These are regions heavily reliant on coal as an energy resource. Bitcoin proponents are advocating powering crypto mining facilities wind, solar, and hydro power. This will significantly reduce CO2 emissions. It will also be a step forward in the direction of net-zero on carbon emissions.
Even Bill Gates said that Bitcoin mining could be sustainable if it uses green power and doesn’t crowd other electricity uses. Some focus is also on creating new ways to conduct transactions that will consume less power. An idea of introducing a carbon-related tax has also been floated. Until these ideas come to fruition, it’s mostly a wait-and-see situation. Environment issues certainly haven’t slowed down Bitcoin’s surge. On Monday, its price was around $50,000 for a single token.