According to Andrew Ross Sorkin from The New York Times, “The bitcoin needs more energy for every transaction process than any method of processing in the world, and therefore not very good for the climate.”
That’s what Bill Gates told recently.
When the investors and companies say they’re increasingly aware of issues related to climate and environment sustainability, a few of those individuals may be on the verge of bumping into the reality of a different financial trend, which is currently worth around US$ 1 trillion: the bitcoin.
It has become impossible to avoid cryptocurrency, while big markets such as Tesla and self-employed investors rush to stock it.
But depending on the study, the annual carbon emission produced to generate the electricity needed to process and mine bitcoin digital currency transactions are comparable to emissions across New Zealand or Argentina.
To put that in perspective, a bitcoin transaction “equals Visa’s carbon footprints of 735,121 Bitcoin transactions or YouTube’ 55,280 hours watch time,” according to Digiconomist, the online platform that created the Bitcoin Energy Consumption Index. Showing the comparisons between a cryptocurrency transaction and Visa transaction, it mentions that the average value of bitcoin transactions is $16,000, while Visa’s average transaction is $46.37.
And the more wide-spread bitcoin would be, the more environmental resources it would consume. What is happening, in short, is: so-called miners certify transactions about the cryptocurrency with computers to manage increasingly complicated mathematical equations. The minors earn for their mining services, which means that it will be more competitive with the increasing popularity of this currency, the more costly will be to mine a token (unique identifier).
“With the growing consumption of resources needed to manage bitcoins in recent years, this has become a thoughtful concern, given its potential effect on climate and the health,” data scientist Alex wrote in the journal Energy Research Social Science.
After all, Laurence Fink, Executive Director of blackrock– the world’s largest fund manager, which currently manages $9 trillion stated that the investment its company will make in the coming years will be estimated, in some way, on how well the businesses plan to address climate issues. Perhaps most importantly, investors are demanding for companies to reveal their carbon footprints, and an organization called the Climate-Related Financial Information Task Force is working to create a global standard.
If this is the situation, how will people consider the choices of the PayPal, which publicly proposes climate-related initiatives but in the third quarter of last year declared plans to enable customers to transact in bitcoin?