Bitcoiners are all libertarian anarcho-capitalists who don’t care about the future of the earth. climate change? There is not any! Awareness of the world’s social problems? None! And anyway: Bitcoin fixes everything! Not even close.
Because the story of the ego bitcoiner is not entirely correct; many a BTC enthusiast is more progressive than is commonly assumed. For example, the Netpositive.money initiative has been calling for CO₂ offsetting of bitcoin holdings for some time. The website also offers a calculator to calculate the environmental footprint of your BTC holdings.
Coindex becomes carbon neutral
But there are also more and more signals from the industry that the environmental impact of crypto investments is being taken seriously. As BTC-ECHO exclusively learned in advance, the Bielefeld-based crypto index fund provider Coindex is now committed to climate neutrality. From an extensive sustainability report, available to BTC-ECHO, shows that the company emitted 21.9 tons of CO₂ in the 2021 financial year, which now needs to be offset. The 21.9 tons come from 10.5 tons resulting from business activity and 11.4 tons from ongoing cryptocurrency trading operations. In other words: Coindex not only compensates its own ecological footprint, but also that of the investors who trade on the platform. This makes the Bielefeld company, which is characterized above all by index investments in crypto assets, a pioneer in the German-speaking area.
“We are taking the consistent path of being a fully climate-neutralized crypto fintech,” says the company’s sustainability report. Coindex is thus addressing justified concerns about increased CO₂ emissions from Bitcoin – although the authors of the study do not think much of the title “Bitcoin being an environmental pig”. Peter Weger from Coindex says to BTC-ECHO:
The largest and most important crypto value has received a lot of criticism in the media. Due to the high power consumption, it is harmful to the climate and therefore bad. Such an opinion is too one-sided and not differentiated enough for me. Bitcoin, like any other ESG investment, is certainly not perfect. But if you approach the matter objectively and without dogma, you will find many arguments that ultimately make Bitcoin a great ESG investment.
ESG (Environment, Social, Governance) describes a framework that investors can use to determine the sustainability of investments.
This is how you determine your ecological footprint
Determining the ecological footprint of proof-of-work currencies like Bitcoin is not exactly trivial, however. After all, there are at best estimates of the proportion of renewable energy used in mining. The University of Cambridge, for example, assesses the share of renewable energies to 39 percent. Coinshares even assumes 71 percent. For comparison: Germany obtains 41 percent of its electricity consumption from renewable energy sources Federal Environment Agency.
But that’s not all. Because although mining accounts for a lion’s share of the electricity consumed with Bitcoin, it would be wrong to leave the compensation of the ecological footprint to the miners alone. After all, users make a decisive contribution to the continued existence of the network and thus also to electricity consumption through transactions.
Coindex has therefore opted for the so-called property-based model when estimating CO₂ emissions. The CO₂ emissions of the network are allocated to 1 BTC in a given period of time. The result: For each BTC held in 2021, one is responsible for 2,112.46 kg of CO₂. It is then easy to allocate this to the total amount of coins in the wallets. However, to be on the safe side, Coindex overcompensates its carbon footprint by a factor of two. The study states:
[Wir] offset twice the amount via atmosfair, i.e. 44 tons, instead of the 21.9 tons of CO₂ actually emitted.
The move by the Bielefeld crypto exchange around CEO Kai Kuljurgis shows that the industry is quite capable of self-regulating behavior. The more bitcoiners and bitcoin companies do not label the ecological footprint of the cryptocurrency as FUD, but take it seriously and compensate it, the less tenable are calls for a ban on proof-of-work cryptocurrencies like bitcoin.
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