• The Cambridge Centre For Alternative Finance’s (CCAF) study on Bitcoin’s environmental impact underestimates the amount of sustainable Bitcoin mining going on.
• ESG investors largely don’t feel comfortable investing in Bitcoin due to the CCAF study, which reported that only 37.6% of Bitcoin mining is powered by sustainable energy.
• To enable ESG funds to support Bitcoin and prevent punitive government regulation, independent empirical data is needed demonstrating unambiguously how much of Bitcoin mining is actually powered by sustainable energy.
The Cambridge Centre For Alternative Finance Study
The Cambridge Centre for Alternative Finance (CCAF) recently released a study on the environmental impact of Bitcoin mining, “A Deep Dive into Bitcoin’s Environmental Impact.” This study concluded that only 37.6% of all bitcoin mining power came from renewable sources such as hydroelectricity and solar power. However, this number has been contested by other research and reports, suggesting that the actual figure is much higher than what was estimated by CCAF.
Why This Matters
ESG investment is rapidly rising and is currently valued at $10.5 trillion in just the US alone. In order for user adoption of bitcoin to increase, it must become more attractive to ESG investors who seek to invest in projects with positive impacts on the environment. At present however, many ESG investors are hesitant to invest in bitcoin due to its perceived negative environmental impact based on CCAF’s report which states that only 37.6% of bitcoin mining uses renewable energy sources like hydropower or solar power.
What Would It Take For ESG Funds To Support Bitcoin?
In order for ESG funds to invest in bitcoin projects they require three things: independent empirical data demonstrating unambiguously how much of bitcoin mining uses renewable energy sources; evidence that the trend towards sustainability within bitcoin is increasing; and proof that despite its electricity usage, overall bitcoin has a net positive effect on the environment when compared with traditional financial systems such as credit cards or banks.
Current Research On Sustainable Energy Usage
Recent studies conducted by both industry body -Bitcoin Mining Council (BMC)- and independent researchers have suggested that 58-60% of all Bitcoin mined worldwide comes from renewable sources like hydropower or solar power as opposed to non-renewable sources such as coal or natural gas-powered plants used in some countries like China or India where most miners are located . These studies suggest that despite its high electricity usage, overall bitcoins has a net positive effect on the environment when compared with traditional financial systems such as credit cards or banks which use large amounts of fossil fuels through their operations and payments systems around the world .
As more independent empirical data becomes available about sustainable energy use within bitcoin it will be easier for ESG funds to make an informed decision about whether or not they should invest in crypto related projects . Furthermore , if more evidence can be provided indicating how much more sustainable energy use there actually is within BTC , it could help clear up any doubts surrounding its actual environmental impact leading more governments to not regulate it punitively .