Anyone with some knowledge of traditional finance (TradFi) knows about ESG investing. ESG, which stands for “Environment, Society, and Governance,” is the criteria that socially conscious investors use when making investment decisions. ESG investors in general are as much concerned with the positive impact of their investments on the world as they are with their returns.
Bitcoin (BTC) may be the best ESG investment of all time. It has generated huge returns for investors (as of this writing, BTC is up 71% year-to-date, up 342% over the past three years, and up a staggering 44,404% over the past decade). Not only that, but it has a huge positive impact internationally.
Bitcoin appears to be one of the few sectors, both in the U.S. and the world, that does not use coal as its primary source of energy. A recent report found that the majority of BTC mining is primarily powered by grid-independent power sources, with 52.2% of the Bitcoin network running on zero-emission energy.
At least 29 mining companies using 90-100% zero-emission energy. In addition, 12 companies use negative emission power sources (capable of capturing CO2 from the atmosphere).
In contrast, only 36.7% of the US main power grid uses zero-emission power sources. That means nearly every industry in America has a power grid that relies about two-thirds on fossil fuels.
Bitcoin is also beneficial for electricity supply. By consistently purchasing electricity and absorbing excess energy, bitcoin mining contributes to stabilizing the electricity grid, improving the efficiency of power plants and lowering energy prices for consumers.
Besides using mostly clean energy, the Bitcoin network is so far much more energy efficient than the traditional financial system. Bitcoin mining accounts for less than 0.2% of global energy use. Only 0.09% of the world’s carbon dioxide emissions.
Bitcoin, which is often compared to gold as a store of value, uses far less energy to mine than gold and is free from the heavy metal pollution caused by gold mining. Replacing gold and the traditional financial system with Bitcoin would have a significantly positive environmental impact.
Perhaps the biggest environmental impact of Bitcoin is that it will incentivize innovation and adoption of clean energy.
Methane is 25 times more harmful to the environment than carbon dioxide, and according to the Climate and Clean Air Coalition (CCAC), “methane reductions are critical to slowing climate change over the next 25 years.” It’s the most powerful tool we can use to The top two sources of methane emissions are oil fields and landfills. Bitcoin mining has reduced methane emissions in these locations.
Bitcoin mining company Vespene has developed a way to turn methane from landfills into electricity and use it to mine bitcoins in an environmentally friendly way, reducing methane emissions into the atmosphere.
Bitcoin mining with methane is also a more effective way to reduce carbon footprint than any other renewable energy source. Mining bitcoin with emitted methane would remove 13 times more carbon dioxide from the environment than using coal.
In a few years, more carbon dioxide will be prevented from being emitted into the atmosphere by bitcoin mining than it is emitted to generate the electricity used by the bitcoin network.
｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
｜Original: Could Bitcoin Be the Greatest ESG Investment of All Time?
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