Cryptocurrencies are all the rage, but their annual energy consumption is estimated to be higher than entire countries such as The Netherlands and Chile.
But, in potentially good news, major Bitcoin miners have now committed to cutting their carbon footprints after a weekend summit with Elon Musk over emissions.
Mr Musk, who has fanned a row over Bitcoin’s environmental impact that contributed to its recent price fall, said miners in North America had committed to disclosing their use of renewables.
Argo Blockchain, a London-listed Bitcoin miner whose CEO Peter Wall was in the virtual meeting, said it would shortly publish an audit of its 2020 energy use. Mr Wall claimed that many miners shared Musk’s concerns about Bitcoin’s emissions.
Bitcoin miners use high-powered computers to process transactions on the Bitcoin network and create new coins, hence their vast carbon footprint. As mentioned, similar in size to emissions of either The Netherlands or Chile.
Elon Musk recently said that Bitcoin’s emissions meant Tesla would no longer accept it as a payment method. Frankly, as a 'clean industry' pioneer, it was astonishing that he hadn't thought through the implications of accepting Bitcoin in the first place. However, in a U-turn that came just months after the electric carmaker announced it would allow cars to be bought with the cryptocurrency, it has certainly shaken the market. Prices have plunged.
Michael Saylor, whose company MicroStrategy is a major Bitcoin investor, said that eight companies had formed a Bitcoin Mining Council that would standardise reporting on energy usage and push for more use of renewables.
Mr Wall said: “The fact that this is a group of miners coming together to agree that ESG concerns are important, and need to be dealt with and be at the forefront of our mining strategies, is really significant,” he told The Telegraph.
China accounts for around 65pc of Bitcoin mining, compared to only 7.2pc in the US, according to researchers at the University of Cambridge. Some cryptocurrency miners in China have said they are halting operations in the country due to a recently announced crackdown from Beijing.
So, whether it's driven by Musk or other outside influences, it's good to know that cryptocurrencies are on notice about their carbon footprint - let alone anything else.