Tom Seyer, hedge fund billionaire and advocate for the environment, has taken aim at Bitcoin, calling the cryptocurrency an environmental disaster.
Bitcoin is a huge user of electricity, so to the extent that that electricity is derived from fossil fuels and is emitting greenhouse gases and other dangerous toxins, then its a problem, Steyer told Yahoo Finance in an interview.
Steyer added, however, that if the leading cryptocurrency’s energy sources were to change, moving away from fossil fuels, then Bitcoin would no longer be as damaging.
If weve completely cleaned up our electricity generation so that when you in fact mine Bitcoinand use a ton of electricitybut that is all clean electricity thats not causing anybodys health or the planets health to be dramatically diminished, then its fine, he said.
Steyer also shared that he was presented with an investment proposal involving a Bitcoin mining operation next to a coal plant, and he did not pull any punches.
The idea being you dont have to transport the coal, its much cheaper, well be able to create Bitcoin at a big spread to the current price, this is a big money-making opportunitythat is a disaster. That is a straight-up disaster, he said.
Cleaning up Bitcoin
Steyers fundamental point is that Bitcoin would not be so damaging to the environment if it pivotedin a substantial wayto relying on renewable energy sources.
That, however, has not happenedat least according to the best available data.
According to Cambridge University, only 39% of crypto mining energy comes from renewable sources. This, in turn, means that Bitcoins annual energy consumption (approximately 115 terawatt hours per year) translates to greenhouse gas emissions broadly equivalent to 54 billion pounds of burned coal.
Of course, those in the crypto industry have tried to paint a much greener picture. CoinShares estimated the figure is as high as 77.6%, but you have to consider the sourceas a crypto asset manager, CoinShares has skin in the game of downplaying the industrys impact on the environment.
The same can be said of the Bitcoin Mining Councils lofty figure of 56%.
The Council was formed as a response to Bitcoins increasing criticism over the environment and is comprised of miners active in the industry.
The Councils data, however, only represented 32% of the global hashpower at the time, and responses to the accompanying survey were voluntarymeaning miners with a not-so-green energy profile could skip the survey entirely.
Cambridges figure of 39% was published in September 2020, so perhaps it is high time for a renewed calculation, given the fact the Bitcoin mining industry has pivoted from China to the U.S. since the study took place.
Despite the emigration, Michel Rauchs, digital assets lead for the Cambridge Center of Alternative Finance, told Decrypt there was nothing planned to revisit the institutions findings from last year.
