Bitcoin and its Impact on Carbon Emissions
It is hard to imagine the modern world without Bitcoin and cryptocurrencies in general. Moreover, cryptocurrency has become inescapable. For example, big companies like Tesla as well as individual investors are willing to buy cryptocurrency. However, the actual carbon emissions from the electricity required to mine Bitcoin and process its transactions are equal to the amount emitted by all of New Zealand or Argentina. This fact underlines the complexity of the problem.
Interestingly, one Bitcoin transaction is the equivalent to the carbon footprint of 735,121 Visa transactions or 55,280 hours of watching YouTube. Furthermore, as the world’s largest cryptocurrency becomes more popular, the more resources its ecosystem consumes.
It is worth noting that, the world’s largest money manager in the world, BlackRock plans to evaluate all investments the company makes in the future, in part, on how they plan to meet the climate challenge. Moreover, a group called the Task Force on Climate-Related Financial Disclosures is working on creating a global standard.
Bitcoin and companies
As can be seen from the information stated above, the world’s largest cryptocurrency consumes a lot of electricity. At the same time, the governmental, as well as private organizations, are working hard to support the environment.
It won’t be easy to find a perfect solution. For example, Square is one of the most public proponents of Bitcoin. The company holds about 5% of its cash reserves in this cryptocurrency.
Furthermore, Tesla invested more than $1.5 billion of its balance sheet in the world’s largest cryptocurrency. As a reminder, the company wants to help reduce climate change through lower carbon emissions. This is not the end of the story, as other companies are also considering whether to add Bitcoin to their balance sheet. Interestingly, financial firms like Guggenheim Partners already invested in this cryptocurrency.
To this date, Bitcoin’s carbon problem did not affect its price. As a reminder, its carbon problem is hardly a secret.
Interestingly, several companies are working on some counterintuitive ideas to turn this cryptocurrency green. For instance, Seetee, an investment company involved in cryptocurrency plans to invest in Bitcoin mining operations that transfer stranded or intermittent electricity without stable demand locally, to economic assets that can be used anywhere. It means the company plans to build wild and solar power plants in places that might not be perfectly suitable for the technology. Seetee will use the extra power to mine the world’s largest cryptocurrency.
- Trading Instrument
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. If you are interested in following the latest news on the topic, please follow Finance Brokerage on Google News.