June 19, 2024

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Is Bitcoin An Environmental Nightmare?

Bitcoin proponents respond to the environmental impact and energy use controversy with a promise to plant trees to reverse their carbon footprint.

In an attempt to reverse negative public opinion caused by the environmental impact of Bitcoin, Accelerated Financial Technologies Inc. promised to plant trees to reduce its carbon footprint. The announcement is confirmation of just how bad the energy controversy is. Despite the volatile ups and downs, cryptos like Bitcoin, Ethereum, and Dogecoin have set new record highs this year. The digital acceleration triggered by the pandemic has been linked to the increase of crypto operations.

Elon Musk and Tesla have had mixed emotions about Bitcoin. The green car company has repeatedly voiced its concern over the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, the burning of which produces the worst emissions of any fuel. But Tesla is not the only company worried about Bitcoin’s environmental impact. Greenpeace, Dell, Expedia, Fiverr, PayPal, Steam, Stripe, and Apple are just some of the companies which either refuse to work with Bitcoin or have gone back and forth on the issue. Cryptocurrency lobbyists are pushing US Congress, governments, and the media in a desperate attempt to influence public opinion.


Related: Why Tesla Stopped Accepting Bitcoin Payments After Just 50 Days

Accelerated Financial Technologies Inc. announced its plans to launch a “carbon-negative Bitcoin exchange-traded fund.” The fund will plant approximately 3,450 trees for every $792,655 that goes into the fund. Environmentalists and critics question how many trees need to be put in the ground to compensate for Bitcoin’s impact. Globally, Bitcoin miners use as much energy as Argentina, a country with more than 45 million people, leading in global agriculture and livestock exports, running oil, gas, mining, and an active industrial sector, as well as operating over 70 hydroelectric plants and 3 nuclear energy reactors. Most Bitcoin mining activity is found in China, some operate illegally as most regions of China have banned cryptocurrency mining. It is estimated that less than 25% of the energy used by bitcoin miners comes from renewable sources. The bulk of the electricity that is powering bitcoin mining computers is generated by coal, hydroelectric, gas, and other fossil fuels driving climate change and global warming.

The Dark Side Of Crypto

Bitcoin and other cryptocurrencies have also been linked to the Dark Web and a wide range of criminal activity. From ransomware and scams to money laundering and major drug cartels, like the New Jalisco cartel and the Sinaloa cartel, as well as terrorist organizations, criminals prefer digital exchanges for their anonymity. Last February Reuters reported that 270 crypto addresses were responsible for 55% of all dirty virtual money operations detected, laundering a total of $1.3 billion USD in 2020. Most of these operations were linked to groups or individuals in the US, Russia, and China.

A Bloomberg Intelligence report shows that Bitcoin energy consumption is on the rise in the US, now ranked 3rd internationally, after Georgia and China. Bitcoin proponents are working to reverse the negative opinion that has been growing about the digital currency’s environmental, social, and legal impact. They rejected the idea of exchanging trade for carbon credit and chose to plant trees instead and assured their environmental efforts are sincere. “We’re highly cognizant of the concept of greenwashing,” Julian Klymochko, Accelerate’s chief investment officer said.

Most countries in the world still do not have clear laws or regulations to deal with cryptocurrencies. While other sectors and companies must respond to environmental, ethical, and legal regulations, cryptos operate in something of a grey legal zone. There are success stories with Bitcoin, of course, with some individuals making huge sums of real-world money by trading or investing in the ethereal currency. However, the news of the millions of dollars lost in Bitcoin trades, or of people who lost their lives savings chasing the dream of getting rich fast rarely gets coverage. Some stories go unseen, just like the thousands of unchecked networks of computers running costly Bitcoin algorithms 24 hours a day, hidden from sight in warehouses across the world.

Sources:  Bloomberg, Reuters, BBC

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