Square, a fintech startup, announced a Bitcoin renewable energy investment plan to promote green energy mining adoption.

The proof-of-work (PoW) mechanism of Bitcoin has long been criticized for being too energy-intensive and emitting excessive carbon, but there is another school of thought suggesting that the mining incentives of Bitcoin will drive miners to pursue clean and renewable energy sources. In efforts to make this a reality, the U.S. fintech startup Square has announced a Bitcoin clean energy investment initiative to promote research on green mining.

Square to Invest $10 Million

Square, the fintech company owned by Twitter founder Jack Dorsey, has announced in an official press release that it will invest $10 million to support companies in the Bitcoin ecosystem that promote the adoption of renewable energy and increase production capacity.

Bitcoin has often faced criticism for its high energy consumption. Critics argue that Bitcoin's reliance on extensive computations to maintain network security is detrimental to the global climate.

According to a 2016 study by the University of Cambridge, Bitcoin's energy consumption accounts for 0.41% of global electricity usage, ranking 35th in electricity consumption worldwide, surpassing countries like Finland and Belgium, with China, the United States, and India being the top three.

Full Transition to Green Energy Mining Expected by 2030

While there is a slow increase in the adoption of renewable energy by Bitcoin miners, Square aims to expedite this process. In addition to the $10 million investment, the company plans to allocate a portion of its future earnings to the project. Jack Dorsey, the founder of Twitter, stated:

We believe that cryptocurrencies will ultimately be powered entirely by clean energy, eliminating carbon footprints and driving the global adoption of renewable energy. Previous public information indicates that Bitcoin has already consumed a significant amount of green energy, and we hope this initiative will accelerate the widespread adoption of clean energy.

It is understood that Square will collaborate with Watershed, a company dedicated to helping corporate organizations develop carbon reduction plans. The partnership with Square will commence in 2021, and they will continue to explore the possibility of involving open financial consortia to expand the impact of the carbon reduction initiative.