The Carbon Footprint That A Single Bitcoin Generates Is Problematic
Bill Gates recently said in an interview that Bitcoin uses more electricity for a transaction than any other method. At a time when organizations and investors increasingly put focus on sustainability and climate issues, some of them may be about to collide with the reality of another financial trend. One that’s currently worth about $1 trillion: Bitcoin.
According to research, the transaction of one Bitcoin is the “equivalent to the carbon footprint of 55,280 hours of watching YouTube or 735,121 Visa transactions. Critics of this comparison point out that the average Bitcoin transaction is worth about $16,000, whereas the average Visa transaction is worth $46.37.
As Bitcoin becomes more popular, its ecosystem consumes more and more resources. The miners verify transactions involving crypto by using computers that can solve increasingly complex mathematical equations. They earn bitcoins for their work, which means that the more popular it becomes, the more competition there is to mine new tokens.
Tesla, a company that’s so focused on reducing climate change through lower carbon emissions, invested more than $1.5 billion of its balance in Bitcoin. How would its holdings affect its sustainability score? Other organizations are also considering whether to add Bitcoin to their balance sheets. Financial institutions like Guggenheim Partners have already invested in Bitcoin and Bank of New York Mellon says it will soon start financing crypto transactions.
So far, Bitcoin’s problem regarding carbon emissions hasn’t slowed down its price, which was hovering Monday night around $50,000 for a token. As a comparison, it was $8,000 a year ago.