Bitcoin increases in both popularity and energy costs : $7600

Bitcoin is continuing its phenomenal increase in popularity and price.It recently surged passed the $7,600 mark, seemingly thumbing its nose at those who questioned it’s worth not too long ago.

It’s integration into real-world markets was also fast-tracked recently when CME, the world’s largest exchange, unveiled its plans to launch a Bitcoin futures product by the end of this year in a move that will have investors positively salivating at the thought of capitalizing on this cryptocurrency.

It will be easier than ever to invest in Bitcoin in the not too distant future. However, the higher the price of Bitcoin as an asset, the less it will be used as an actual currency as holders would want to keep it close to their heart, and pocket, as it continues its upward trajectory in price.

In addition, Bitcoin transaction fees can be as high at $6, making it a highly unlikely payment option when buying a loaf of bread.

The thing is, Bitcoin is expensive to maintain, especially when it’s not being used as a medium of exchange. As businesses claim to be more conscious of environmental, social and corporate governance (ESG) consequences, it would be interesting to see how they would incorporate the energy-intensive Bitcoin into their companies.

Recent data has found that it takes 215 kilowatt-hours of electricity to process just one Bitcoin transaction.To put that amount into context, it is the equivalent of the weekly energy consumption of an average American household.

Even though it’s a lucrative asset, it raises many ESG issues for businesses hoping to capitalize on it. Because it is decentralized, anyone who can afford it can use it. This includes users trading on the dark market and cyber criminals. So yes, being backed by CME might lend an air of legitimacy to a controversial asset, but responsible investors toeing the ESG line may still not be interested in investing in Bitcoin.

“If we assume that consumption will continue to increase roughly in line with the Bitcoin price, then we could end up in a situation within a few years where the electricity consumption of Bitcoin mining would be equivalent to a country like the Netherlands or Switzerland,” this was said by Remy Briand, head of ESG for index creator, MSCI.

Based on this, Briand is also concerned that the Paris climate agreement’s efforts to reduce emissions was, and will continue to be, a waste of time.

It might be a different case if users were transacting with Bitcoin, but they’re not, which may leave people wondering as to the point of Bitcoin using such large amounts of energy without really being used in everyday life.