The Truth About Bitcoin and the Environmental, Social and Governance (ESG) Issues
Bitcoin's ESG score is already high, and it will continue to improve in the years to come.
Written by Sylvain Saurel - In Bitcoin We Trust
ESG. This is an acronym that many people don't know yet, and that has become fashionable especially in the Bitcoin world since May 2021.
It is already frequently used in other fields of course, but in the Bitcoin world, it wasn't until Elon Musk ended support for Bitcoin payments for Tesla cars that this acronym came into the headlines.
For those unfamiliar with the meaning of this acronym, ESG stands for Environmental, Social, and Governance.
Bitcoin ESG is now a hot topic
It refers to metrics related to a company's intangible assets, a form of corporate social credit score. Research shows that intangible assets comprise an increasing percentage of future enterprise value. ESG factors represent a kind of label that has been adopted in the United States in the financial sector, and now around the world.
Opponents of Bitcoin who love to criticize Bitcoin's supposedly negative environmental impact have taken advantage of Tesla's end of support for Bitcoin payments to bring Bitcoin's negative ESG score in their eyes to the forefront.
For them, Bitcoin is not a sustainable technology for society in the long term because of its use of Proof-of-Work (PoW) as the consensus algorithm for its system.
This leaves the general public thinking that Bitcoin is polluting too much while contributing nothing to the world. This is unfortunate because what Bitcoin brings to the world is unique. Bitcoin is worth fighting for its revolution to triumph.
Hundreds of millions of people around the world need Bitcoin daily to have hope for a better future.
Environmental impact of Bitcoin
So it's time to really take stock of the Bitcoin ESG to set the record straight right now. The good news for Bitcoin in recent weeks has come from China, which has banned Bitcoin from its territory. Bitcoin mining companies are now leaving China and heading west.
This great exodus will allow for a better decentralization of the Hash Power of the Bitcoin network while promoting green mining. According to the latest news from the Bitcoin Mining Council, the share of renewable energy in the electricity used by Bitcoin has now exceeded 50% to reach 56%.
So Bitcoin is doing much better than most of the world's major economies in terms of renewable energy use. The situation is not perfect, but Bitcoin is far ahead in many areas.
More importantly, those who vilify Bitcoin in this area don't tell you that Bitcoin uses less than 1% of the world's energy while allowing millions of people around the world to have access to basic banking services. So environmentally, the Bitcoin system is moving in the right direction, and efforts will continue to grow in this direction in the years to come.
Bitcoin on the social level
On the social level, Bitcoin is already a Plan A for millions of people around the world. People living in emerging countries or under authoritarian regimes have been excluded from the current banking system for decades. For them, Bitcoin is a unique hope for a better future.
Bitcoin guarantees all its users 5 fundamental human rights:
The right to privacy.
The right to basic banking services.
The right to security through encryption.
The right to freedom of speech.
The right to save your money.
Bitcoin protects your right to private property and gives you the ability to live your life on your own terms. This freedom is freely available to everyone on earth. Bitcoin is freely available to everyone.
This is something unique in human history.
Governance of Bitcoin
In terms of the governance of the Bitcoin network, it couldn't be more transparent. Everything is open with Bitcoin, which is a permissionless system. Anyone can become a node in the network at any time if they decide to.
You then really become your own bank and no one can stop you from using your money as you wish. Even without running your own node, this guarantee is there, but it's always better to take full control in my opinion.
Finally, the immutability of Bitcoin gives you incredible guarantees in a world as uncertain as ours. If Bitcoin doesn't change, the people around it will change and sooner or later join its revolution. For several years, many opponents of Bitcoin have been realizing their mistakes.
The truth: Bitcoin has a high ESG score, and it will improve in the coming years
Bitcoin has a high ESG score. Those who still have doubts should check for themselves as Bitcoin teaches us to do. If it is easy for opponents to denigrate Bitcoin on the ESG level, you must realize that their arguments ring hollow.
Once you dig for yourself, you'll understand that while the Bitcoin system isn't perfect on all levels, but no system ever is, things are still moving in the right direction.
And that's what really matters. Rather than focusing on the problems, you need to focus on the solution, which is embodied in Bitcoin.
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Bitcoin's each feature is there for a reason, which is leading it to be freedom itself.
I will give a weird example (as always). Let's think that we are in a sailboat travelling from Europe to North America and we have our antennas to catch signals for connecting internet. Suddenly we learn that someone who we know is in need of urgent money, and it's matter of life. In that time we are close to America, and due to time difference bank applications aren't working. Then what will happen? We will not be able to transfer the needed money. Only if Bitcoin didn't existed :). Thanks to what Bitcoin provides us, we can easily make the transfer and save the situation.
Therefore Bitcoin is a well-thought innovation, game-changer, the definition of freedom and most importantly a hero!
I didn't know what ESG was before reading the artice, thanks for clarifying what it is and telling us your thoughts.
I don't agree that "Bitcoin is polluting too much while contributing nothing to the world." Bitcoin bring us a different point of view about money. Usher in a new age!
So, we can't say Bitcoin contributing nothing to the world, that would be selfish. Yes, it's not sustainable because of PoW, but I believe we will overcome this.
Rights offered by bitcoin are inestimable.
Nobody's perfect. If something's right, we should hold on to it.
Thank you for the article, Sylvain!