Environmental groups across the globe are lining up to disable the ability to accept donations with Bitcoin until the original cryptocurrency cleans up its act.
Ever since Elon Musk dramatically announced Tesla would no longer allow customers to pay for his vehicles in Bitcoin, the spotlight has been firmly on the crypto world’s impact on the environment.
The backlash from Musk highlighting what was already regarded as a widely known (but often overlooked) truth, however, is beginning to spread far and wide.
In the coming week, Greenpeace USA is expected to officially announce it will no longer accept charitable donations in Bitcoin. The UK arm of the world’s most recognisable environmental group is expected to follow suit, as are the rest of its branches across the world.
Greenpeace was one of the early adopters of crypto. In 2014, while much of the world had still not even heard of decentralised finance, it created a facility to make donations using BTC and regularly promoted its policy of onboarding the digital community.
However, speaking to the Financial Times, the group said: “As the amount of energy needed to run Bitcoin became clearer, the policy became no longer tenable.”
It is understood Friends of the Earth will be making a similar announcement by June, with several other high-profile organisations expected to withdraw the facility to donate BTC in the coming weeks.
The trigger point for the eco exodus was, of course, Elon Musk’s sudden backtrack on the ability to purchase Tesla cars with Bitcoin. The markets were rocked when he said: “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.”
At the time, Bitcoin had just enjoyed an all-time high above $62,000 with virtually every crypto on the board racking up record figures. The step down in price was then further fuelled by China repeating calls it had made over four years urging businesses not to trade in cryptocurrency.
China’s grumbling may have briefly moved the spotlight away from Bitcoin’s green problems, but those concerns will be rapidly thrust under the microscope this summer as environmental groups turn on crypto.
The amount of fossil fuels used, and the output of greenhouse gasses as a direct result of Bitcoin mining would be impossible to accurately calculate. And how it balances out against the environmental impact of fiat currencies is an argument that will echo through the corridors of history for many decades yet.
However, what is accepted as a fact, is the estimate that crypto mining annually matches the electricity output of Sweden – around half of the consumption of the UK’s yearly electricity needs.
According to many academics, Bitcoin is developing an unwanted reputation as an unclean asset – a label the industry quickly needs to dispel if it is to enjoy the kind of future its investors believe it can have.
“Bitcoin alone consumes as much electricity as a medium-sized European country,” Trinity College Dublin’s Professor Brian Lucey says.
“This is a stunning amount of electricity. It’s a dirty business – it’s a dirty currency.”
He’s not alone, and his viewpoint is far from unique.
Of perhaps even more concern, is how traditional banking institutions may now turn this chink in Bitcoin’s armour to their advantage.
Some of the big players are already beginning to encircle their prey, with the European Central Bank adopting the alpha male role by describing “grounds for concern” over Bitcoin’s “exorbitant carbon footprint”. The Italian central bank was also quick to point out its own payment system’s environmental impact was some 40,000 times smaller than that of BTC.