Among those who are serious about tackling the climate crisis, the “Proof of work is proof of burning,” is fast becoming the dominant view of Bitcoin (BTC). The aforementioned word is for this year’s COP26 UN climate talks, cited this week in the Financial Times and is from a United Kingdom government representative.
Catching up and becoming more aware of the climate risks involved are the climate campaigning groups — who have, until now, been slow to take a firm line against Proof-of-Work cryptocurrencies, according to the same article.
Also, now planning to scrap the channel. The organization told reporters that, while the option has not in fact been widely used to date, is Greenpeace, which set up a facility for accepting Bitcoin donations back in 2014.
According to Greenpeace, this policy became no longer tenable, as the amount of energy needed to run Bitcoin.
When the Tesla CEO announced the company would no longer be accepting BTC as payment for vehicles due to concerns about the high energy consumption of Bitcoin mining, it has been posited that much of the current awareness of Bitcoin’s energy problem has undoubtedly been galvanized by Elon Musk’s recent high-profile intervention
While Musk’s decision had a dramatic and immediate impact on the cryptocurrency markets, sparking a sharp decrease in Bitcoin’s price, the shift towards Bitcoin’s reputation as a “dirty currency” has long been in the making. Longstanding concerns about the currency’s high energy consumption are increasingly gaining traction against the backdrop of a new consensus in high finance that is increasingly focused on centering sustainable investing strategies.
Critics of green measures set in motion by the European Union and others — which involve an attempt to escort capital into sustainable development assets — point to the ample room for “greenwashing” that current strategies underwrite. Nation-states are increasingly stepping in to “derisk“ development assets i.e. to guarantee profits against demand-side, political and climate-driven investment shocks, while the world’s largest asset managers are able to co-opt and capitalize on the green agenda for their own ends.
As the political battle over green finance continues to be waged, many political and financial actors are, nonetheless, increasingly taking the line that Proof-of-Work cryptocurrencies are a “dirty business.” The European Central Bank’s recent Financial Stability Review has highlighted the “exorbitant carbon footprint” of crypto-assets as grounds for concern, while the Bank of Italy’s comparison of its Target Instant Payment Settlement with Bitcoin highlighted that the former already had a carbon footprint that was 40,000 times smaller than Bitcoin’s by 2019.