Swap Bitcoin for Nano, save the planet.
Why swapping your Bitcoin for Nano is one of the most impactful, positive things you can do for the planet, and might make sense from an investment perspective.
Bitcoin’s environmental impact is often written about. While most agree the impact is huge, this impact is often framed in terms of per-transaction emissions which clouds the numbers. Many individuals and institutions buy and hold Bitcoin for investment purposes, rather than as a medium of exchange. They rarely transact, and might be under the impression that transaction-based figures do not apply to them. This article therefore looks at the environmental impact of investing in Bitcoin. If you hold Bitcoin, the result might be even worse than you’re expecting. The good news is that swapping into Nano is easy, good for the planet, and likely good for your wallet.
Quantifying a $10,000 investment
Bank of America recently published a research note on Bitcoin’s ESG credentials. Hidden among the sizeable text is a chilling statistic.
We estimate that a $1bn fresh inflow increases Bitcoin prices on average by 11%, which in turn results in a carbon footprint of 5.4mn tons (Exhibit 81).
Buying Bitcoin increases the Bitcoin price, which increases the total reward available for miners. Miners add more mining equipment to compete for the increased reward, leading to more energy usage and more pollution, until a new equilibrium is reached.
A $1 billion figure is difficult to comprehend for most. This article therefore looks at a more realistic $10,000 investment and the environmental impact following from that.
Buying and holding $10,000 worth of Bitcoin results in a carbon footprint of 54 tons. To put this into perspective: flying from New York to London sets you back 0.9 tons. The average US citizen emits 16 tons per years. The average citizen of the world emits 4.7 tons per year.
To put it more bluntly — buying and holding $10,000 worth of Bitcoin causes more emissions than 10 average people eating, driving, flying and generally living their lives for a full year. You could fly from New York to London, every single week, and cause less environmental impact than the impact from investing $10,000 into Bitcoin.
If you’re investing $1,000 or $100,000, the math isn’t fundamentally different. The impact is proportionally smaller or larger compared to a $10,000 investment.
Having read the above, you might conclude that I am a crypto hater, a no-coiner, or even worse — a fiat lover. Nothing could be further from the truth. I was into Bitcoin in 2012, have been into crypto ever since, and believe crypto is a force for good in the world. I believe that Bitcoin was a brilliant proof of concept. I also believe its time has passed and that we need to be realistic about its impact and limitations.
Having established the impact of investing in Bitcoin, in the remainder of this article I show how divesting from Bitcoin into Nano has the largest positive environmental impact you can personally make and how this will likely be good for your portfolio.
Quantifying a $10,000 divestment
For argument’s sake, let’s say you swap $10,000 in Bitcoin for Nano. The next section explains why this is wise from an investment perspective. You would have a direct, positive environmental impact. In fact, it is likely the single best environmental decision you can make. Most CO2-reducing measures force individuals to give up things they like. Eat less meat, drive less, fly less. Turn vegan? This saves you 1 ton of CO2 yearly. Drive electric, rather than petrol? Roughly 2 tons CO2 emissions per year saved ). Swap $10,000 of Bitcoin into Nano? Roughly 54 tons of CO2 emissions saved.
Most Bitcoin investors hold Bitcoin for ideological or investment reasons. Ideologically, having a decentralized currency that anyone in the world can access is a strong proposition. As an investment, a decentralized store of value that can serve as digital gold is an attractive asset. It could be argued that ideologically and for investment purposes, the CO2 emissions of Bitcoin are worth it, if there was no good alternative.
Nano as the stronger ideological and investment option
Nano’s ideology is similar to that of Bitcoin.
Nano makes money efficient for a more equal world — simple to pay with, easy to accept and open to all.
Nano offers secure, decentralized payments, like Bitcoin. Payments are instant, feeless and scalable. This tends to be hard to believe, so I’d urge you to try it for yourself, for free. Bitcoin and Nano proponents can both agree on the potential of decentralized digital payments.
That being said, Bitcoin proponents tend to focus on Bitcoin’s store of value properties. It is billed as digital gold, a decentralized asset to hold. I’ve been a strong believer in this myself in the past. However, Nano has some edges over Bitcoin as an investment and store of value fundamentally.
The first is the aforementioned environmental concerns surrounding Bitcoin. To corporations, this is important. The bigger the institution, the more likely it is that investment proposals have to pass certain ESG (Environment, Governance, Social) barriers. Bitcoin’s energy usage makes this difficult. Nano’s energy usage on the other hand is extremely low, with the entire network able to run on the power of a single wind turbine ). Its energy usage does not increase with an increasing price. This is ideal for institutions, as Nano is a carbon-neutral investment.
The second aspect is Bitcoin’s core design. Bitcoin mining offers rewards. Mining also comes with economies of scale (cheaper capital, cheaper maintenance, stronger negotiating position for mining equipment, etc). Research shows that because of these economies of scale, Bitcoin’s consensus is centralizing over time ). As Bitcoin’s security is derived from its decentralization, this degrades Bitcoin’s long-term security and store of value proposition.
Nano is designed differently. It has no fees, and no inflation. It has no mining rewards and no incentives to gain a larger share of consensus. Nano’s voting-based consensus mechanism ensures that every Nano holder is proportionally incentivized to decentralize the Nano network further. There is no trend towards centralization — rather the opposite happens. This ensures Nano’s security in the long run.
The third aspect is the underlying usecase. As mentioned earlier in this article, Nano is instant and feeless. This opens up a lot of usecases for Nano. It’s useful for merchants, for remittances, and for microtransactions. These usecases provide Nano with an underlying value, a demand for Nano on top of the demand for a store of value.
Putting it together
In summary, the environmental advantages of divesting from Bitcoin are obvious and large, and becoming increasingly clear to institutions. Those divesting are likely to want an alternative digital store of value to invest in. Nano offers a clear alternative, through being environmentally friendly while also being a fundamentally stronger investment and decentralized store of value.
This seems to be one of the rare cases where the “green” choice possibly also offers higher investment returns. Nano is up against Bitcoin since Nano’s inception, but also has far stronger YTD performance (BTC: +27%, Nano: +540%). With an increasing focus on the environment, this outperformance just might persist. As Bitcoin’s market cap is still ~900x that of Nano, there is still a lot to gain.
If you enjoyed this article, I’d recommend this longer read on Nano as a store of value. If you want to read about the design that makes Nano efficient, I’d recommend this article. First and foremost, I’d recommend trying Nano out for yourself by getting the Natrium wallet and visiting a free Nano faucet. Thanks for reading.
Greenhouse gas emissions from a typical passenger vehicle
Indirect and direct CO2 emissions of electric cars
Taxonomy of centralization in public blockchain systems: a systematic literature review
Trend of centralization in Bitcoin’s distributed network
Decentralization in Bitcoin and Ethereum Networks
A Deep Dive into Bitcoin Mining Pools
Centralisation in Bitcoin Mining: A Data-Driven Analysis