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Jack Dorsey’s Square Launches $10M Initiative to Reduce Bitcoin’s Carbon Footprint

bitcoin mining

Major payment processor Square is taking its love for Bitcoin up a notch with its move into the mining space. The Silicon Valley tech giant announced the launch of Bitcoin Clean Energy Investment Initiative, a program to improve Bitcoin’s carbon footprint and make the asset more energy-efficient to mine.

Supporting Renewable-Focused Companies 

Square will commit a grant of $10 million to the clean energy initiative per an official announcement

The program will support companies that have developed efficient renewable energy projects for Bitcoin mining. Company chief executive Jack Dorsey re-emphasized his company’s belief in Bitcoin powering a green Earth – a characteristic that could also improve its adoption globally.

The payment processor has joined hands with Watershed, a company powering climate programs for top businesses. Watershed will be the first beneficiary of the $10 million grant. Square added that it would combine a lowered carbon footprint with a verified carbon removal portfolio. The portfolio would be rolled out in the first quarter of 2021.  

“Committing to be a net zero carbon contributor is consistent with our purpose of economic empowerment, as we’ll continue to work for our customers without contributing to longer-term climate issues. Endangering the environment will ultimately disproportionately endanger underserved communities around the world,” said Square Chief Financial Officer, Amrita Ahuja.

Renewables Already Catching Up

Bitcoin’s energy footprint has been a source of controversy for as long as Bitcoin mining became popular. Many have decried the activity’s power consumption, with some researchers claiming that the activity takes as much power as some states and small countries. Bitcoin reportedly emits about 22 megatonnes of carbon dioxide annually.

However, the mining space is focusing more on renewables, with several regions favoring clean energy sources for their crypto mining operations. In October, researchers from Cambridge University released the 3rd Global Cryptoasset Benchmarking Study. The result showed that about 76 percent of Bitcoin miners use some form of renewable energy as part of their mix.

Hydroelectric power was found to be the most common source of energy for most Bitcoin miners by the Cambridge researchers. About 62 percent of the respondents also claimed to be using the energy source for their operations. Coal and natural gas and sources take the second and third positions respectively, with 38 and 36 percent. The other three common sources of energy are wind, solar, and oil.

The study also divided miner consumption based on regions, noting that miners in Europe, the Asia-Pacific, Latin America, and North America use the same amount of hydroelectric power as compared to energy from sources like natural gas and coal.

With renewables’ use growing, there is still some doubt about whether this will be enough to turn the tide. Last year, Alex de Vries, a blockchain specialist at PricewaterhouseCoopers, explained that renewables alone wouldn’t be sufficient to reduce the asset’s carbon footprint.

de Vries had quoted a 2014 research that estimated the entire finance sector’s energy consumption to be as high as 650 TWh of energy per year. He added that while renewables are growing in use, they don’t cover exchanges, wallet providers, payment service providers, ATMs, and more.

The blockchain expert added that these third-party operators would need to figure out ways to reduce their carbon footprint is the Bitcoin space is to become energy-efficient truly.

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      Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.