Cryptocurrencies, and Bitcoin especially, have received a lot of bad press in the world’s media as to their sustainability and negative impact on the environment as regards energy usage. This week’s climate summit in Glasgow will likely put the crypto sector back under the spotlight once again.
Some of the largest companies in the digital asset space are fighting against what they feel is unfair criticism of Bitcoin’s perceived large energy use and its impact on global warming.
Therefore, Global Digital Finance, which includes BitMex, Coinbase Global, and Crypto.com among its members, has called for more “data transparency around issues of sustainability” (BNN Bloomberg article published earlier today).
The Global Digital Finance group published its own report on Monday and set “industry-wide environmental goals” for the cryptocurrency sector to adhere to. According to the Bloomberg article:
“The report contemplates how best to measure environmental impact of digital assets, digs into their social utility and warns policy makers against making a trade-off.”
Even as the Bitcoin price sets its sights on all-time-highs coupled with new price discovery, the elephant in the room still needs to be discussed. Bitcoin’s carbon footprint will be all-important, as companies look to comply with the Paris Agreement, which means keeping global warming to 1.5 degrees celsius.
According to Faryar Shirzad, chief policy officer of Coinbase:
“It may be time for our industry to partner with established leaders in carbon accounting and reporting to develop a bespoke, standardized framework for assessing and disclosing the climate impacts of crypto mining, trading, and holdings.”
However, it really isn’t so easy to estimate the Bitcoin network’s energy usage. Researchers from the Cambridge Centre for Alternative Finance say that it is not correct to compare it to traditional payment systems.
“Having a reliable estimate of total power consumption, depends on the carbon intensity of the energy source used to generate the electricity, the Cambridge researchers say. That would require a closer look at factors including where mining facilities, or networks of computers used to process transactions, are located as well as seasonality.”
Within the crypto sector there are those such as Alexander Hoptner, CEO of BitMEX, who says that the industry should be keeping its own house in order by “applying a social justice lens to digital asset investing”.
The Cardano Foundation also wants to do its part, and plans to plant 1 million trees in Madagascar, and potentially also in Kenya and South East Asia.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.