The past month has been a rollercoaster ride for Bitcoin and its investors. While the asset’s price has yet to crack the $40,000 mark ever since it dipped, investors are hopeful that it would eventually regain its highs and provide as much value for their money as it used to before May came along.
However, several developments have come to the asset’s space, hoping to ensure that it remains as functional as possible for investors. Most important is the current level of environmental impact that Bitcoin is having.
Square is Doing More Than Talk
One of the developments is an announcement from payment processor Square to develop a solar-powered Bitcoin mining facility. According to a press release, Square will partner with Blockstream - a Canadian-based blockchain technology development company - on the project. The objective is to reduce the footprint of Bitcoin mining and ensure that the asset is as environmentally friendly as possible.
As many recall, the current market dip began when Tesla CEO Elon Musk announced that the company would no longer accept Bitcoin for payments. Tesla had started accepting Bitcoin in February, adding that to the company’s $1.5 billion investment in the leading cryptocurrency. However, as Musk explained in his statement, Tesla had become all too aware of Bitcoin’s environmental impact, and it would be irresponsible to continue accepting it as payment.
To be fair, Tesla’s tweet isn’t the only reason why the crypto market is dipping. There have been several bearish signals over the past month, and all of them have weighed on the asset’s price. However, while many were unhappy about Tesla’s decision, it did force a broader conversation about Bitcoin and its impacts on the environment.
In truth, Bitcoin has a significant environmental pull. Unfortunately, transactions aren’t the friendliest to the environment, and the process of mining the asset also takes a lot of resources. There has been a significant acceptance of that fact over the past month. Now, like it always is, people are stepping up to do something about it.
Last week’s press release explains that Square will invest $5 million for the development of the mining facility, which will be a “proof-of-concept for a 100% renewable energy Bitcoin mine at scale.” The facility will be built at one of Blockstream’s sites in the United States, and while Square will finance it, Blockstream will focus more on developing and running the facility.
It is no surprise that Square is putting a sizable sum into renewable Bitcoin mining. The company’s CEO, Jack Dorsey, has been a fan of Bitcoin for a long time. In fact, Square was one of the first big tech companies to support Bitcoin, with Cash App - one of the firm’s flagship products - allowing customers to send and receive Bitcoin seamlessly.
More Effort is Needed to Transform Bitcoin
Of course, this endeavor is most likely to have a little impact on Bitcoin’s environmental footprint. Most of the asset’s mining operations still rely on old, dirty energy, and the mission to make Bitcoin cleaner will require more effort from major stakeholders.
Things will be especially more difficult now that China is cracking down on Bitcoin mining. China has always been a major stakeholder in Bitcoin mining, and data shows that it still holds a significant share of the total mining hashrate. However, areas like Inner Mongolia and the country’s Sichuan region - which have historically been sources of clean energy - have recently been driving out miners in their droves.
With miners now looking for new bases of operation, there is a significant chance that many of them will have to go to places where there isn’t so much clean energy.
Bitcoin’s environmental impact is also getting some bad attention from government officials. This week, Massachusetts Senator Elizabeth Warren went after Bitcoin, explaining that it consumes more energy than many countries. As the Senator added, one of the best ways to combat the current climate crisis will be to crack down on “environmentally wasteful cryptocurrencies.”
Warren also made sure to highlight the volatile nature of cryptocurrencies. In part, she explained:
“We had a chance to talk with experts, bring in a lot of senators around it, but the bottom line was that what's happening right now in cryptocurrency like Bitcoin and Dogecoin, it's a Wild West out there, and it makes it not a good way to buy and sell things, and not a good investment, and an environmental disaster. So do we need some regulation around this? You bet we do.”
So far, it is quite evident that something needs to be done about Bitcoin’s environmental impact. The asset has finally gotten a sufficient level of acceptance from Wall Street as an investment product. Now, with the world moving gradually towards a green future, it goes without saying that Bitcoin will need to move as well. This is time to show just how progressive the crypto space can be.