Crypto’s environmental impact is a debate that just never seems to end…and both sides are grappling for the upper hand.
Two weeks ago, 23 members of the U.S. House of Representatives wrote a letter to the head of the EPA, asking him to move along on President Biden’s executive order to investigate “the impacts [blockchain] technologies have on the environment” and climate change.
Now, the Bitcoin Mining Council has fired back with its own letter to the EPA – rebutting each of Congress’ claims and concerns.
“There is no meaningful difference between a ‘digital asset mining facility’ and datacenters run by Google, Apple, Microsoft,” as the mining lobby’s main argument goes. “Each is just a building in which electricity powers IT equipment to run computing workloads.”
Most mining and data-center operations just buy electricity from the local grid, like anyone else… So, if regulators have a problem with the emissions at power plants, they can take it up with the energy companies, the BMC letter concludes.
While these bitcoin miners are clearly arguing in their own self-interest, their letter points to a fundamental truth. Politicians are going to push the issues that get their voters riled up… And, as human beings, they’re going to try and take an easy win. It’s simpler to target bitcoin than Big Tech – or figure out how to accommodate, say, all the electric vehicles that also have to plug into the grid.
Look at it however you want to. The most salient fact is: Putting too much pressure on the electrical grid is a problem. And when it becomes a problem for the community – regulators tend to make it a problem for the energy hogs. Even small cities like Plattsburgh, NY have had to crack down when crypto miners “pushed the city to the brink.”
This is the single best reason why many bitcoin miners have, indeed, invested in renewable energy to meet their consumption needs. The BMC, for one, reported last week that its members are “utilizing electricity with a 64.6% sustainable power mix,” on average.
This tends to get companies accolades in the press… But does this translate to a worthy investment? Let’s fire up the Portfolio Grader. Our resident “quant,” Louis Navellier, created it to direct his Growth Investor portfolio, and he makes the stock ratings free and easy to access for anyone.
Here’s How the “Green” Crypto Miners Compare
Below are miners who get most (or all) of their electricity from clean energy – and how their stock ratings compare in our Portfolio Grader:
Stocks like CleanSpark (NASDAQ:CLSK) and HIVE Blockchain (NASDAQ:HIVE) are struggling with their Quantitative Grades. This reflects money flow into the shares from big institutional players, and it’s the single most important factor in the Portfolio Grades. So, even when companies have great fundamentals like HIVE, it can hold them back from an overall “Buy” rating.
TeraWulf (NASDAQ:WULF), on the other hand, gets a solid “B” for its Quant Grade. But on its Report Card, you can see that the eight Fundamental Scores are right down the middle of the road:
Digihost (NASDAQ:DGHI) earns a “B” for both its Quant Grade and Fundamental Grade. While it’s pretty tiny, at $70 million market cap and $25 million annual revenues, Digihost is growing fast. And that’s expected to continue, with forward revenues estimated at more than $75 million.
This adds up to an “A” for Sales Growth. Most of the other fundamentals rate a “C,” although Digihost does get a “B” for Earnings Momentum:
As for cryptocurrencies themselves: Some big names have been adopting Algorand (ALGO-USD) lately – citing environmental friendliness.
Algorand: The Green Crypto?
Algorand has some cool projects going on. Vesta Equity and Lofty AI, for example, both let you invest in fractional real estate that’s been tokenized on the Algorand blockchain.
ALGO’s also been a staple of our Ultimate Crypto portfolio since April 2020 for four specific reasons:
- “Its fast payment processing speeds are better than the largest financial firms around the globe. And they will be secure and can scale in size.”
- “It is decentralized, which is a must for any legitimate altcoin.” That’s more than can be said for leading “Ethereum killer” Solana (SOL-USD), critics say.
- “It will offer full completion of the transaction without having to branch out to other networks.”
- “The blockchain project is working with well-respected and large global institutions.”
Most recently, those global institutions include FIFA, which organizes World Cup soccer. According to Monday’s announcement, Algorand will provide FIFA with “cutting-edge, sustainable technology,” most likely involving NFTs.
Days before, Algorand took over Times Square for Earth Day to promote its new carbon-offset programming:
Algorand’s new self-sustaining smart contract automatically offsets minimal carbon emissions! Leveraging @ClimateTrade, the smart contract allocates a portion of every transaction fee to purchase verified carbon credits. More via @Cointelegraph 👇 https://t.co/NCgh0TfGvx
— Algorand (@Algorand) April 23, 2022
Buying carbon credits is, of course, not the same as actually having zero carbon emissions to begin with. But proof-of-stake blockchains like Algorand are often seen as more eco-friendly than proof-of-work predecessors – since they don’t suck up electrical power to validate transactions.
“The one-hour takeover [of Times Square] is estimated to represent 350 million finalized transactions on the Algorand blockchain chain and 90 hours of running the network. In comparison, it would equate to only six finalized transactions on the Bitcoin network running for just 1.5 seconds,” Algorand boasted in its Earth Day press release.
Even before the Earth Day stunt, those carbon-offsets made Algorand an appealing choice for Air Europa, too.
Air travel is notoriously carbon-intensive…but now the Spanish airline can help clean up its image with sustainable “NFTickets” on Algorand. The first auction – a business-class ticket from Madrid to Miami – sold for a cool $1 million in USD Coin (USDC-USD) stablecoin.
“We are very bullish on the overall tokenization theme, and these funds on Algorand’s blockchain are another example of what’s coming,” as our analysts conclude in Ultimate Crypto.
Like the crypto miners, ALGO is well off its highs – but high demand for “green” investments in the New Digital World could be just the catalyst long-term investors are looking for.
On the date of publication, Ashley Cassell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. To have more news from The New Digital World sent to your inbox, click here to sign up for the newsletter.