Carbon-neutral Bitcoin funds attract investors because investors seek greener cryptocurrencies

Bitcoin (Bitcoin) Even for those outside the core crypto community, it has always been a hot topic recently discussed, but unfortunately, this is not for the best reason.In particular, the energy required to mine Bitcoin is Attract investors’ attention They are considering BTC as a diversified option.

According to data from the Cambridge Alternative Finance Centre, Bitcoin currently Consume Approximately 110 MWh per year.Harvard Business Review article It is further pointed out that this is equivalent to 0.55% of global electricity production, roughly equivalent to the electricity production of a small county.

Despite this situation, it must be pointed out that any industry that adds value to society may have an impact on the environment. However, with the increase in global warming and other environmental issues today, it is important for the crypto industry to recognize the energy consumption required to mine Bitcoin. With the realization of this concern, individuals in the cryptocurrency community can propose solutions to meet this challenge.

Today’s Green Solution: Carbon Neutral Bitcoin Fund

Influential executives and cryptocurrency investors like Elon Musk and Michael Saylor continue to highlight Bitcoin’s energy consumption challenges Twitter In order to raise awareness of the future of Bitcoin. recent, Musk and Seller announce the establishment of a Bitcoin mining committee, Consisting of several industry leaders, they will finally realize a sustainable Bitcoin mining plan.

Although this is a step in the right direction, it may take years for this Bitcoin mining committee to have a real impact. Energy Network Chief Commercial Officer Jesse Morris (Jesse Morris) is a blockchain protocol designed to promote application development in the energy industry. He told Cointelegraph that although it is encouraging that Musk and Sailer are on Twitter Talked about the new Bitcoin mining committee, but action must be taken immediately.

Morris explained that Energy Web is currently working directly with many Bitcoin miners to develop software that uses blockchain technology to detect the carbon footprint of the Bitcoin network in almost real time. Morris pointed out:

“I hope that the Bitcoin community can adopt a more effective consensus mechanism, but I don’t think this will happen, so we must now come up with a solution to solve the challenge through proof-of-work consensus.”

Morris further believes that recent solutions can begin to build a greener Bitcoin network by developing carbon-neutral exchange-traded funds.

Although a carbon-neutral ETF sounds like a foreign concept, some investment management companies have taken steps to ensure this. For example, Ninepoint Partners LP, headquartered in Toronto, is an independent investment management company that manages approximately 6.5 billion Canadian dollars in assets. Alex Tapscott, managing director of Ninepoint Digital Assets, told Cointelegraph that Bitcoin accounts for a large portion of the company’s assets under management. He pointed out: “Encrypted assets are a fast-growing and important asset class for us.”

Ninepoint created a Bitcoin trust, Listed on the Toronto Stock Exchange In January of this year. Then, the Bitcoin Trust was converted to an ETF on May 6. After news of Ninepoint’s Bitcoin ETF came out, Tapscott explained that the company Decided Offset 100% of its fund’s carbon footprint to ensure that interested investors get green exposure to Bitcoin:

“By absorbing the cost of Bitcoin’s carbon footprint, we provide investors with an option to make green exposure to Bitcoin. We think this is a unique and important product that will help convince those who have been Investors on the fence seeking to buy bitcoin.”

According to Tapscott, Ninepoint is working with many programs to help secure the company’s green Bitcoin ETF. For example, Ninepoint is working with Crypto Carbon Ratings Institute, a research company focused on the environmental impact of cryptocurrencies, and CarbonX, an environmental software financial technology company.

Lena Klaassen, co-founder of the Crypto Carbon Ratings Institute, told Cointelegraph that the company uses its own methods and research to calculate the best estimate of the actual carbon footprint of the Bitcoin network. The Crypto Carbon Rating Association and CarbonX report to Ninepoint the share of its ETF in the Bitcoin network. CarbonX then uses its Zerofootprint approach, which provides a significant amount of CO2e or carbon dioxide equivalent to offset pollution.

Although Tapscott could not disclose specific figures about the fund’s carbon footprint, he explained that this was mainly due to the fluctuation of assets under management with the influx of new investors and changes in the price of Bitcoin. “Bitcoin’s energy footprint changes with its hash rate. This is a constantly changing target, and we will adjust it every month to reflect these changes.” He said.

Even if the market fluctuates and the cost of offsetting the carbon footprint is fully funded by Ninepoint, Tapscott pointed out that the company believes that this is the right approach, whether it is the future of the company or the entire crypto industry. Tapscott said:

“There are a lot of investors who want to be exposed to Bitcoin, but they question the energy footprint of Bitcoin, especially those institutions that achieve environmental, social, and governance (ESG) goals.”

Green Fund-Is it a sustainable development trend?

Although there are still few crypto asset management investment companies that promise to be green, the efforts of some companies are likely to trigger a powerful movement.

Soon after Ninepoint announces its green Bitcoin ETF, One River Digital Asset Management Mention Carbon neutral ETF. One River declined to discuss the matter with Cointelegraph, but Tapscott pointed out that he hopes Ninepoint’s green initiative can become a model for the entire industry.

Although it is difficult to predict the future of the cryptocurrency field, it is encouraging that the cryptocurrency derivatives trading platform BitMEX has also recently Announced the decision to achieve carbon neutrality. In addition, Marathon Digital Holdings, a corporate Bitcoin mining company based in the United States, Revealed plans to achieve 70% carbon neutrality. Klaassen added that the Crypto Carbon Rating Association now sees BTC mining companies (especially publicly traded mining companies) assessing their own Scope 1, 2 and 3 emissions to address their trends.

Paul Brody, head of Ernst & Young’s blockchain, further told Cointelegraph that a carbon-neutral mining business is definitely possible. He said: “If you intend to hold the mined bitcoins only in a carbon-neutral way, then you will have a green solution.”

However, Brody pointed out that if someone wants to transact with Bitcoin, it may not be certain that the transaction will be processed by carbon neutral miners. Brody said:

“You don’t know the history of these transactions. However, if you combine the carbon neutral mining business with the carbon offset levels of other transactions, you are likely to have a green Bitcoin business.”

Bitcoin’s long-term solution

Although Bitcoin ETFs, investment management companies and mining companies continue to commit to carbon neutrality, long-term solutions are still needed to make green Bitcoin a lasting reality.

In the long run, Morris believes that an agreement that meets official standards must be established. To ensure this, Energy Network recently released its “Encrypted Climate Protocol”Morris pointed out that there are 45 supporters, including miners, cryptocurrency investors, foundations, exchanges, etc. Accord’s goal is to make Bitcoin completely renewable by focusing on two aspects.

Morris mentioned that the agreement aims to increase people’s awareness of “Green cleaning. “According to Morris,”Clean cryptocurrency funds“The reason for suspicion is that a blockchain network that does not use traditional proof-of-work consensus will not consume any energy like Bitcoin.

Therefore, Morris believes that the discussion around energy conservation should specifically focus on Bitcoin. Morris also explained that the “Encrypted Climate Agreement” will take steps to help large institutions and retail investors make their Bitcoin green by bringing fundamental transparency to the Bitcoin network.

However, the challenge that still needs to be resolved is the formulation of standards. According to Morris, Energy Web is currently researching and developing a global standard for tracking Bitcoin’s carbon footprint.

In addition, the crypto community must continue to work hard to provide an environmentally friendly solution for Bitcoin. CarbonX Chief Operating Officer Bill Tapscott told Cointelegraph, “Although a carbon neutral approach has been proposed, the crypto community itself must take responsibility for the transition to a low-carbon world.”