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Bitcoin ESG

Bitcoin has been in the crosshairs of ESG proponents for a while now. They claim that the energy miners use to perform proof of work is extremely damaging to the environment. Consequently, anyone investing within the framework of ESG should reject Bitcoin. While we could argue the merits of ESG to begin with, we won't for now. We will assume that it is a legitimate investing philosophy, and everyone should keep in mind the environmental, social, and governance impact of their investment choices.

Firstly, the energy consumption of mining is relatively small on a global scale. A recent report by KPMG showed that energy usage from mining is equivalent to all the tumble dryers used worldwide. And yet there is no push to force everyone to use clotheslines. The focus on energy consumption also ignores the other two letters that Bitcoin improves upon. The social aspect of Bitcoin cannot be ignored. Approximately 30% of the world's population is unbanked. Bitcoin solves this problem by not requiring a financial intermediary and granting access to anybody with a smartphone and internet connection. Finally, there is governance. Bitcoin's decentralized network, which performs PoW and validates transactions, is the fairest form of governance there is. It is a trustless system where no one entity has undue power. You cannot say the same for the modern corporation. So, ignore the fear-mongering and keep stacking.

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