SECTION 6 : CRYPTO AND ESG
ETPs . Similar strategies have been used by ETC Group , which started offsetting the carbon footprint of its $ 577m BTCetc Bitcoin Exchange Traded Cryptocurrency ( BTCE ) in July through similar sustainable investment projects .
Others which have joined the commitment to carbon neutrality include 21Shares , and their investments into Swissbased carbon emissions offsetting firm MyClimate , and Valour , which announced the debut of its Bitcoin Carbon Neutral ETP on the Frankfurter Boerse last month . “ Right now , the closest that we can get is through a sustainable ETP based on proofof-work protocols is if energy providers offer renewables to miners ,” Carlos Gonzalez , an analyst at 21Shares , told ETF Stream .
Early Revolut employee and current founder of blockchain sustainable energy company Tesseract Energy Alan Chang agreed with assessments like the one made by Gonzalez : “ You do not need some greenwashing , carbon economy , goplant-a-tree-in-the-amazon-concept to go net-zero . This can be done properly with the right technology ,” he said .
Sustainable bitcoin
For Chang , the current issue with bitcoin ’ s energy inefficiency is a question about “ consumption ” and “ production ”.
As he explained : “ You could wash your clothes less or get an A + washing machine … great ! You need to produce sustainable and cheap energy .”
If affordability is one part of the equation , the cost for two-thirds of renewable energy sources were lower than coal , the cheapest fossil fuel energy source , according to data from the International Renewable Energy Agency . In the report , electricity from onshore wind fell by 15 %, offshore wind by 13 % and solar by 13 % compared to 2020 .
The second part of the equation is “ beautiful ” blockchain technology , Chan explained . Permissionless with peer-to-peer capabilities , blockchain further increases the affordability of renewable energy through its low transaction costs . Not only that but firms could “ select their own energy mix ”, Chan added , a quintessential part of Tesseract Energy ’ s vision for “ democratising energy ”.
Chart 1 : High voltage bitcoin
1 / 1 / 205-31 / 5 / 2022 ; terawatt hours
500
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300
200
100
0 01 / 15 09 / 15 05 / 16 01 / 17 09 / 17 05 / 18 01 / 19 09 / 19 05 / 20 01 / 21 09 / 21 05 / 22
Chart 2 : Predicted power consumption reduction since ethereum merge
16 14 12 10 8 6 4 2 0
0.008 0.007 0.006 0.005 0.004 0.003 0.002 0.001 0.000
n CBECI BTC min-max range n Digiconomist BTC estimate n Digiconomist BTC and ETH combined estimate n Austria n Netherlands n Three Gorges Dam n France n Spain
Sources : Cambridge Bitcoin Electricity Consumption Index ( CBECI ), Digiconomist , Cambreidge Centre for Alternative Finance , International Energy Agency , Morgan Stanley and ECB calculations
Giga Watts
Giga Watts
05 / 17 12 / 17 06 / 18 01 / 19 07 / 19 02 / 20 09 / 20 03 / 21 n Bitcoin n Ethereum PoW n Ethereum PoS
12 / 20 01 / 21 3 / 21 04 / 21
Source : The Ethereum Foundation n Ethereum PoS
ESG Unlocked : Europe out in Front October 2022 29