Bitcoin Mining Uses More Sustainable Energy Than CCAF Study Suggests
• The Cambridge Centre For Alternative Finance’s (CCAF) study on Bitcoin’s environmental impact underestimates the amount of sustainable Bitcoin mining.
• ESG investors largely don’t feel comfortable investing in Bitcoin due to the CCAF study saying that only 37.6% of its energy usage is sustainable.
• It would take independent, empirical data for ESG funds and the White House to get behind Bitcoin.
Understanding Bitcoin’s Environmental Impact
The Cambridge Centre For Alternative Finance (CCAF) conducted a deep dive into Bitcoin’s environmental impact in 2022, finding that only 37.6% of its energy usage was sustainable. This figure has caused ESG investors to become wary of investing in Bitcoin, as it fails to meet their criteria for net positive environmental impact. As a result, user adoption has stalled and environmental groups are lobbying governments to regulate Bitcoin mining in a punitive manner.
Why ESG Investors Are Wary
ESG investors require three things before they will invest in any project: independent, empirical data demonstrating unambiguously the sustainability of the project; that the macro trend is quantifiably moving toward more sustainability; and that it is quantifiably net positive for the environment. With CCAF reporting that only 37.6% of energy usage is sustainable, this makes many ESG investors uncomfortable investing in Bitcoin projects, as it fails to meet these criteria set out by them.
Conflicting Data
The findings from CCAF have been called into question by research from a different source – namely, the industry group known as the Bitcoin Mining Council (BMC). BMC’s study found that 58.9% of energy used for mining was actually sourced sustainably – conflicting with CCAF’s report significantly. However, due to being an industry body rather than an independent research institute like CCAF – some ESG investors have taken this finding with a grain of salt and instead choose to trust what was reported by CCAF over BMC’s figures instead – regardless if they are accurate or not .
What Would It Take To Gain Support?
In order for both ESG funds and governments alike to get behind bitcoin and not issue punitive regulations against miners – there needs to be independent empirical data available which demonstrates unequivocally how much sustainable energy is being used for mining purposes – as well as proof that this trend is moving towards greater sustainability overall – making it a net positive for the environment .
Conclusion
If reliable evidence can be provided which meets these criteria then it could mean big things for bitcoin user adoption – allowing more people access than ever before while also providing further support around green initiatives such as carbon offsetting schemes alongside renewable power sources .
