KPMG debunks misconceptions: Bitcoin’s environmental impact is less severe than believed

Global accounting firm KPMG has released a report on the environmental, social and governance issues surrounding Bitcoin. The report highlights that Bitcoin offers several advantages as opposed to its widely believed disadvantages, some of which the report says are exaggerated. 

The details 

• KPMG described the often-debated topic of the energy consumption requirements of Bitcoin mining and its carbon footprint as significantly lower than is often discussed. 
• The report stated that Bitcoin mostly makes no direct impact on the atmosphere since Bitcoin mining hardware runs on electricity. Instead, the electricity generation process produces carbon at much lower levels than is often discussed. 
• In committing to a zero-emission process for mining Bitcoin, the company suggested further measures to curtail its environmental footprint, including renewable energy and heat recycling. 
• In addition, the report noted that Bitcoin has made a social impact by simplifying cross-border payments, helping with fundraising for Ukraine in its ongoing conflict with Russia, and providing electricity for rural places in Africa. 
• The report cited a Chainalysis article that found that only 0.24% of Bitcoin transactions are used for money laundering. According to the company, this data suggests that concerns about Bitcoin as a tool for money laundering are overblown.  

Key quote 

• The report read: 

“Despite Bitcoin’s increased adoption, it continues to often be a misunderstood technology and asset class. At the same time, there is a variety of impactful use cases that Bitcoin offers that have a track record in delivering value for their users and society at large.” 

Zoom out 

• Bitcoin has been criticized for high energy consumption and being a massive contributor to carbon emissions. 
• The Rocky Mountain Institute alleged that Bitcoin’s annual electricity consumption is higher than most countries, and its carbon emissions are on par with diesel emissions used by United States railroads. 
• In addition, Bitcoin mining is outlawed in many countries. Earlier this year, Libyan authorities clamped down on the activities of Bitcoin mines in the country. The Libyan government attributed the frequent power cuts in the country to Bitcoin mining activities. 
• However, Bitcoin has provided social benefits as well. An MIT Technology Review report documented the activities of a Bitcoin mine helping to keep Virunga National Park in war-torn Congo afloat.