Blockchain Mining Companies: According to Greenpeace, Bitcoin (BTC) mining has reportedly grown into a significant industry controlled by established financial institutions that purchase and run massive facilities that consume a lot of electricity.
The total energy consumption of the Bitcoin mining business in 2023 was around 121 TWh, equivalent to the energy consumption of an entire country like Poland or the whole gold mining sector. The research argued that this led to substantial carbon emissions because these facilities use as much power as a small metropolis despite Bitcoin’s self-proclaimed independence from traditional financial institutions. The industry was closely knit, according to the study. To fund Bitcoin mining companies and trade and invest in Bitcoin.
TradFi Supports BTC Mining
The paper brought attention to the significant role that conventional banks played in facilitating Bitcoin mining. These companies depend on funding from financial institutions, insurance companies, asset managers, and venture capital firms to establish and run their businesses. MassMutual was named among the top five 2022 Bitcoin mining carbon polluters.
Trinity Capital, Stone Ridge Holdings, BlackRock, and Vanguard. They discharged over 1.7 million metric tons of CO2. The exact amount of power that 335,000 American houses use in a year. Emissions from Marathon Digital, Hut 8, Bitfarms, Riot Platforms, and Core Scientific, four Bitcoin Blockchain Mining Companies, were equivalent to those from eleven gas-fired power stations.
Impact of Bitcoin on the environment
The paper drew parallels between the environmental effects of beef and gasoline production from crude oil and the market value of Bitcoin. It said that the growing Bitcoin industry has negatively impacted the environment. The Proof-of-Work (PoW) consensus method that Bitcoin utilizes consumes significant electricity.
Unlike traditional currencies, cryptocurrencies use an open digital ledger. Miners must use a lot of power to solve complicated algorithms for Bitcoin’s Proof-of-Work (PoW) to work. The study said more electricity is vital for electrifying homes, transportation, and industry to meet global climate targets. Yet, energy-hungry miners are putting a burden on electrical infrastructure worldwide.
Financial Responsibility
The document claims that banks, Wall Street, and traditional financiers—not Bitcoin miners — are responsible for the energy imbalance. According to Greenpeace, financial incentives and tax breaks encourage mining corporations to consume more energy. Wall Street and the financial industry are responding positively, the report says. Miners are seeking a cut in profits, which means they rely on support from asset managers and banks.
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Solutions
According to Greenpeace, financial institutions should be more forthright about the environmental incentives they offer to mitigate the harm that these incentives do. According to the paper, bitcoin miners should publicize energy use and carbon emissions data. “Regarding their investments, loans, and underwriting services for Bitcoin mining companies. Financial firms should report sponsored and aided emissions.”
Bitcoin miners should be held financially accountable for their harm. To local communities, excessive power consumption, pollution, water usage, and strain on electrical infrastructure. To fix Bitcoin’s environmental impact, they advocated switching to a different consensus method that doesn’t rely on the energy-intensive proof-of-work paradigm.
