The Bitcoin (CRYPTO: BTC) price is up 2.5% since this time yesterday, currently trading for US$62,961 (AU$85,082).
That's down 5.9% from the fresh record of US$66,930 set on 20 October.
But the Bitcoin price still remains at historic highs. And it's gained 310% over the past 12 months alone.
While those lofty gains will come as good news to crypto investors, it could be putting unwanted pressure on humanity's goal to slash our global carbon output.
Why?
Image source: Getty Images
Soaring energy use as Bitcoin price at record highs
While you can't actually hold them, or see them for that matter, most cryptos use a tremendous amount of energy.
In the case of Bitcoin, each transaction is verified through the blockchain. Meaning every time a token is bought or sold, numerous powerful computers across the world are employed by "miners" to confirm its legitimacy. And those computers, taken together, use a tremendous amount of electricity.
How much?
According to a study by the University of Cambridge, in 2020 Bitcoin used as much energy as all of the Netherlands, a nation with more than 17 million people. The same study showed Bitcoin used almost as much energy as all of the global gold mining activity.
That's not a good look when nations, companies and individuals across the planet are being asked to cut their carbon emissions amid a renewed push at COP26.
Making matters worse is that alongside the rocketing Bitcoin price, crypto mining activity is picking up pace.
According to Markets Insider:
As more people start mining, the hash rate rises. Alex de Vries, founder of bitcoin energy data service Digiconomist, told Insider that it "seems inevitable" that the hash rate and electricity consumption will soon hit a new high, given the current bitcoin price.
But it's not all bad news for Bitcoin enthusiasts.
As the Bitcoin price has been marching higher, the token's miners have increasingly been turning to renewable energy sources to power their machines.
According to the Bitcoin Mining Council, in Q3 2021, 57.7% of the token's energy use came from sustainable sources. That was driven in part by the exodus of miners out of China following the nation's crackdown earlier this year. This saw an influx of miners into North America, where they have much greater access to renewable energy.
Aussie institutions embracing cryptos
High energy use or not, as the Bitcoin price traded near record highs, Australians saw the first crypto linked exchange traded fund (ETF) launch on the ASX last week. And the BetaShares Crypto Innovators ETF (ASX: CRYP) didn't disappoint, seeing a record volume of trades for an ETF on its first day. (Details here.)
Commenting on the launch of the crypto ETF, Sunil Kaushik, spokesperson for global crypto platform Gemini said:
This is an exciting development not only for the crypto industry in Australia, but globally. Australian investors now have an opportunity to benefit from the growth of the blockchain economy. This disruptive technology is still in its nascency, and this listing puts Australia at the forefront of the blockchain revolution.
Where the Bitcoin price goes to from here is anyone's guess. But with cryptos likely here to stay, the move to renewable energy sources to power their blockchain networks is welcome.
