A new report from the auditing firm KPMG suggests that Bitcoin could have more environmental benefits than previously thought. While cryptocurrencies have often been seen as environmentally harmful, KPMG’s report challenges this perception.
One argument put forward by the auditors is that the intense competition in Bitcoin mining drives a strong demand for cheap electricity, which in turn makes energy generation methods like gas-flaring profitable. Gas-flaring involves burning methane, a potent greenhouse gas, to generate energy.
According to KPMG, Bitcoin offers “numerous benefits” for Environmental, Social, and Governance (ESG) criteria. ESG criteria are used to measure sustainability for governments, companies, and the public. This perspective aligns with recent moves in the investment sector, where companies like Blackrock have launched ESG-focused investment options, including a Bitcoin ETF.
KPMG’s report challenges the notion that Bitcoin mining is inherently environmentally harmful. Miners rely heavily on cheap electricity, and they tend to set up operations in locations with abundant renewable energy sources, such as wind and solar power. Additionally, the report suggests that Bitcoin mining could indirectly contribute to reducing greenhouse gas emissions by promoting energy generation methods like gas-flaring, which neutralizes methane.
Comparatively, the report points out that industries such as textiles, tourism, and livestock consume significantly more energy than crypto mining. It also suggests that the energy consumption associated with mining physical gold exceeds that of mining Bitcoin, according to the statistics presented.
While Bitcoin’s environmental impact has been a topic of debate and concern, KPMG’s report offers a different perspective, highlighting potential benefits and challenging the prevailing narrative of cryptocurrencies as inherently harmful to the environment. As the crypto industry continues to evolve, discussions around its environmental impact and sustainability will likely remain central to the conversation.