According to Bloomberg News, the digital asset companies are not agreeing to the claims that the cryptocurrency sector is using excessive energy as the leaders of the world meet at Glasgow for the climate change talks.
Global Digital Finance has members that include BitMEX, Crypto.com, and Coinbase Global Inc. have asked for greater transparency related to data and sustainability issues. The group published a report in which it has laid out environmental goals industrywide amidst the issues related to the contribution of Bitcoin to global warming.
Bloomberg states that the report highlights how to best find out the effects of digital assets, looks into the social utility and sends warnings to the policymakers in issues related to making a trade-off.
The growth in ESG investing is in which the investors take into account credentials of corporate governance, a company’s assets and environmental and social aspects, and the risks related to digital assets. Crypto advocate Elon Musk has highlighted how cryptocurrencies use excessive energy due to which he stopped accepting Bitcoin as payment for the Tesla Inc vehicles at the beginning of this year.
This pushback of the industry was prominent in the report provided by think tank Z/Yen’s contribution to the report which is titled ”Don’t Throw the Digital Baby Out With the Climate Bathwater”. Z/Yen’s is a commercial think tank.
The carbon footprints of Bitcoin are a reality for the investors that have engaged in digital currency in the current year amidst a scenario where there has been a surge in price that is almost double.
More and more investors are committing to aligning their portfolios in tandem with the Paris Agreement, the goal of which is to keep the planetary warming to 1.5 degrees centigrade, thereby offering clarity to the carbon contribution of Bitcoin and taking the necessary steps to mitigate, which is crucial reports, Bloomberg.
Faryar Shirzad, who is the Chief Policy Officer of Coinbase has given a proposal of voluntary reporting.
He said that it is time for the industry to work as partners with the leaders that are established in carbon accounting and reporting so that a bespoke and standardized framework could be developed for the assessment and disclosure of the climate impacts due to crypto mining, holdings, and trading.
The report of Global Digital Finance argues that the narrative related to energy intensity and crypto mining has been largely negative and has appeared to be “intellectually dishonest in its assertions and conclusions”.
As per Bloomberg one of the most common misconceptions related to the use of energy by the Bitcoin network is its comparison to the traditional system of payment that links the transaction volume to the consumption of electricity. The estimate of how much power consumption estimates are reliable depends on the energy source’s carbon intensity required to generate the electricity, researchers at Cambridge say.
This would necessitate a closer look at the factors that include mining facilities, the network of computers that are used for processing transactions, and seasonality.
There is also an effort to apply a lens of social justice to the investment related to the digital asset. Cardano, a Blockchain platform as its contributory part plans to plant trees as part of their initiative towards, “global impact challenge“. Cardano Foundation pledges to plant 1 million trees in Madagascar, Southeast Asia, and Kenya.