Hero's Image

Is Bitcoin bad for the environment?

Primers

Bitcoin allows users to securely send and receive payments across the world, without needing a centralized authority to guarantee the transactions. This unique combination of immutability, security, and scarcity is revolutionizing modern-day finance and access to financial services. There are many misconceptions about Bitcoin, however, including about how it is used and who benefits from the network. One of the most common misperceptions is that Bitcoin and other Proof-of-Work networks are more harmful to the environment than traditional payment systems. This view has led some policymakers to consider banning the Proof-of-Work consensus mechanism. Unfortunately, this perspective ignores some well-documented facts about how the Bitcoin network works and how energy is used in our everyday lives. With a Proof-of-Work network, miners run computers to cryptographically secure and validate a transaction before it is added to the blockchain. The energy usage from this process is what is driving the opinion that bitcoin is disproportionately contributing to climate change. 

Logo Hashdex
The material contained on this website is for informational purposes only and Hashdex, and its affiliates, is not soliciting any action based upon such material. The material is not to be construed as investment advice nor is it to be construed as recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy. Further, the material contained on this website does not constitute a representation that the financial instruments described therein are suitable or appropriate for any person. Past performance is not an indication of any future performance. This website may contain advertising of financial products.