Bill Gates on Bitcoin’s Climate Change Conundrum

Bitcoin’s value continues to soar. The cryptocurrency is now priced above $54,000, which gives it a market cap of more than $1 trillion. Still, experts are interrogating whether it is worth the huge environmental costs since it poses several red flags when it comes to sustainability. 

Speaking to the New York Times Andrew Sorkin, Bill Gates revealed that Bitcoin uses more electricity per transaction than any other method. This spells doom for climate change and the rate of global carbon emissions. Some studies have claimed that annual carbon emissions from the electricity generated to mine and process this cryptocurrency are the same amount emitted by New Zealand or Argentina. Since Bitcoin’s survival relies on becoming more popular and accruing more users, the more it grows, the larger its carbon footprint. This naturally creates a conundrum within the business community.

For starters, several companies have already adopted Bitcoin or are starting to do so. These corporations either allow customers to conduct transactions on their platforms using the cryptocurrency or they are investing in it directly. However, many of these companies are also invested in the issue of climate change and their shareholders keep pressuring them to lighten their carbon footprints. Evidence of this dilemma can be found in the company BlackRock, the New York-based multinational investment management corporation. BlackRock has been dealing in Bitcoin investing, while simultaneously being an advocate for companies reducing carbon emissions.

The only way forward is to make Bitcoin greener. Jack Dorsey, co-founder, and CEO of both Twitter and Square, a financial payments company, has pledged $10 million to invest in cleaner Bitcoin mining technologies. Companies like Settee have committed to focus on building Bitcoin mining operations with renewable energy. Other ways to conduct a greener Bitcoin transaction would be to have users conduct batches of transactions over a payment channel called Lightning Network. This would use less electricity. When he was asked about whether he could make his peace with Bitcoin reducing carbon emissions, Mr. Gates, a self-proclaimed Bitcoin skeptic said, “If it’s green electricity and it’s not crowding out other uses, eventually, you know, maybe that’s OK.”