Quite a few institutional investors who have been diving into bitcoin mining have been quite elated to promote the price volatility of the cryptocurrency. In fact, the price swings have been seen as a completely different asset class under construction. Bitcoin has currently traded at a range of $5,000 to $40,000 in the last year, with any argument about its true value just a paradox in itself. No one really knows where Bitcoin will end, and no one knows how far Bitcoin mining would go.
The Carbon Emission Through Bitcoin Mining
We can understand that the gold rush one gets from bitcoin mining can be addictive- especially in this pandemic condition. But what is less debated is the consumption of energy that takes place- in order to maintain and mine the bitcoin. This is precisely why this cryptocurrency is routinely dumped in with the trades dealing in energy transitions such as Tesla. It goes without saying that most critics don’t care a dime that Bitcoin pretty much makes a portfolio a bit less green.
The algorithm required for Bitcoin mining will always demand even higher amounts of computational power. If Bitcoin were a country, the carbon footprint has been calculated and compared to New Zealand- an actual country. A single transaction of Bitcoin generates CO2 equivalent to around 706,765 swipes of a credit card. One can always clump that with the use of Bitcoin and bitcoin mining as a majorly speculative instrument- and we can be assured that the cryptocurrency would never notch high on the ESG.
While the estimates of energy are never really an exact and measured science, the power consumption and its trajectory is pretty clear. The annual consumption through bitcoin mining has been predicted at around 77.8 terawatt-hours- as it has been mentioned by Digiconomist.
