Since Elon Musk dramatically announced that Tesla would no longer allow customers to pay for its vehicles in Bitcoin, the spotlight has been firmly on the impact of the crypto world on the environment.
Musk’s reaction to highlighting what was already considered a widely known (but often overlooked) truth is starting to spread very widely, however.
In the coming week, Greenpeace USA is expected to officially announce that it will no longer accept charitable Bitcoin donations. The UK arm of the world’s best-known environmental group is set to follow suit, as are the rest of its branches around the world.
Greenpeace was one of the first to embrace cryptography. In 2014, when much of the world still hadn’t heard of decentralized finance, it created a facility for donating using BTC and regularly promoted its policy of onboarding the digital community.
However, speaking to the Financial Times, the group said: “As the amount of energy needed to run Bitcoin became clearer, the policy was no longer tenable.
It is understood that Friends of the Earth will make a similar announcement by June, with several other high profile organizations due to remove the facility to donate BTC in the coming weeks.
READ MORE: Bitcoin rocked by Elon Musk’s dramatic Tesla announcement
The trigger for the ecological exodus was, of course, Elon Musk’s sudden comeback on the possibility of buying Tesla cars with Bitcoin. Markets were rocked when he said, “Cryptocurrency is a good idea on many levels and we believe it has a bright future, but it can’t come at a cost to the environment.”
At the time, Bitcoin had just hit an all-time high above $ 62,000, with virtually every cryptocurrency on the table posting record numbers. The price drop was then fueled by repeated calls made by China for four years urging companies not to trade cryptocurrency.
China’s growls may have briefly taken the spotlight on Bitcoin’s green issues, but those concerns will quickly come under the microscope this summer as environmental groups activate crypto.
The amount of fossil fuels used and the production of greenhouse gases directly resulting from Bitcoin mining would be impossible to calculate with precision. And its balance with the environmental impact of fiat currencies is an argument that will resonate in the halls of history for many decades to come.
However, what is accepted as a fact is the estimate that crypto mining is equal to Sweden’s electricity production each year – roughly half of the consumption of the UK’s annual electricity needs. .
According to many academics, Bitcoin is developing a junk reputation as an unclean asset – a label the industry must quickly dispel to take advantage of the kind of future its investors think they can have.
“Bitcoin alone consumes as much electricity as a medium-sized European country,” explains Professor Brian Lucey of Trinity College Dublin.
“It’s an incredible amount of electricity. It’s a dirty business – it’s dirty money. “
He is not alone and his point of view is far from unique.
Perhaps even more concerning is how traditional banking institutions can now turn this loophole in Bitcoin’s armor to their advantage.
Some of the big players are already starting to circle their prey, with the European Central Bank embracing the role of the alpha male by describing “grounds for concern” about Bitcoin’s “exorbitant carbon footprint”. Italy’s central bank was quick to point out that the environmental impact of its own payment system was around 40,000 times lower than that of BTC.
READ MORE: Bitcoin gets nervous as Elon Musk’s curious meddling continues
Another cause for alarm will be the fact that many opponents of the cryptocurrency are using data from 2020 or 2019 – the two years in which the price of Bitcoin and its stable digital partners was significantly lower than it was. is today. Many estimates suggest that the number of Bitcoin miners in 2021 could be double what it was in 2019.
Bitcoin supporters have been slow to come forward to make a defense case, but the slow emergence is not voiceless.
Twitter supremo Jack Dorsey, working with Cathie Wood of Ark Investment, has previously produced a white paper outlining how the Bitcoin ecosystem can further facilitate faster development of better alternative energy sources. In particular, they point to more immediate efforts to “over-build” the supply of solar energy.
It’s a short-term response to a long-term problem that clearly won’t go away anytime soon.
The solutions to Bitcoin’s current PR nightmare can be as complex as the mathematical problems posed by the mining method itself, but they must be addressed if Bitcoin is to enjoy its days in the sun again.
Perversely, these solutions may still be found in the very country that is currently responsible for part of the current predicament in crypto.
While China accounts for a large portion of the world’s crypto mining, it is not responsible for the same proportion of its carbon footprint. Several years ago, the world’s most populous country implemented massive hydropower programs – a source it now relies heavily on for its crypto mining needs.
The provinces of Sichuan and Yunnan, where hydropower dominates the supply, alone account for about 50% of all global Bitcoin mining during the rainy season. The point is, alternatives to fossil fuels are proving to be successful, and it’s up to the Bitcoin community to move towards enabling those choices.
While still in its early stages, momentum is building to refine Bitcoin’s green credentials.
According to Canadian business consultant Magdalena Gronowska, cryptocurrency and current issues surrounding environmental concerns may actually play a key role in how energy is accessed and used.
“I see Bitcoin mining playing an increasingly important role in the transition to a clean, modern and more decentralized energy system,” she explained.
“Miners can provide grid balancing and flexible demand response services and improve the integration of renewables.”
Whatever the solution and wherever the answers lie, the cryptocurrency community must act quickly before this particular brand of public image remains.