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Date
27/04/2021
It is no exaggeration to say that the cryptocurrency is antithetical to each of the three principles – Environment, Social and Governance – that make up the ESG acronym. Here, CG Asset Management fund manager Chris Clothier examines the reasons why.
Bitcoin is nothing short of an environmental catastrophe. It is estimated to consume as much electricity as the Netherlands and have a carbon footprint equal to the entire country of New Zealand. Bitcoin “miners” are in a race to complete the proof of work against other miners. The winner of each race (which occurs every 10 minutes or so) is awarded new coins. As the value of Bitcoin has risen, so the prize for “winning” increases and Bitcoin miners are incentivised to deploy ever greater resources in pursuit of victory. These resources take the form of vast, air conditioned server farms, a significant proportion of which are based in China and rely on coal power. Bitcoin is much less effic