Thread by @DSBatten

While not investment advice, this is my opinion as a fund manager on the ESG case for Bitcoin after 2 months due diligence.

If you’re a manager of fund where #bitcoin is an investment candidate: failure to consider #BTC in the mix is gross negligence to your ESG obligations

If you’re a private investor, not investing in #BTC because it “uses energy” is like not investing in solar because it “uses energy” (coal in solar’s case) in it's manufacture: a 101 level cost-accounting fail. We must look at cost & benefit to asset an asset's net ESG position

First some background. As well as being an ESG fund manager, I’ve been an investing into novel technologies since 2000. Our first 2 funds focused on deep-tech solutions that remove carbon out of industrial processes. The impact of those technologies will be felt from 2035 onwards

Reading the latest IPCC and UNEP reports made us realise that we, and by extension any ESG fund, has an urgent obligation to look at technologies that can have a more immediate impact on climate change.

The result of our research: we're now looking at making ESG Fund-3 a special-purpose Bitcoin mining fund. We’re also looking at how we help other ESG funds show their wholesale investors that #BTC’s ESG story justifies large capital allocations!)

Here’s why:

We are particularly impressed that Bitcoin has reached 58.4% renewable energy usage. This is not only higher than any other industry sector, it is higher than any other any other large industrialised country.

It has achieved this in just 14 years, and our research revealed a renewable growth rate of 59% since Q1 2021, and ~383% from 2013. This matters because it can be a “Roger Bannister” to other industries by showing a seemingly impossible speed is in fact possible.

Bitcoin mining’s renewable adoption story can inspiring already fast-moving industry sectors as to what’s possible, and removing the excuse from slow-moving industries that rapid transition to renewables is impossible.

More importantly though from an #ESG cost accounting viewpoint, we are interested in the net environmental benefits of Bitcoin mining. That means looking at how Bitcoin mining can accelerate rapid measures to reduce climate change

We see two use-cases here:
1.Using BTC’s unique time-of-day agnostic features to facilitate a faster build-out of the renewable grid.
2.Using BTC’s location-agnostic features to slash methane emissions from both flared/vented gas and landfills

These I’ve covered in separate twitter threads.

Accelerating the renewable grid build-out:

https://twitter.com/DSBatten/status/1514072998881665027?s=20&t=KPKUOFrI3zXGdaBnSbTk5w

Reducing methane emissions:

https://twitter.com/DSBatten/status/1519902364819685376?s=20&t=KPKUOFrI3zXGdaBnSbTk5w

(We’ll be sharing models and calculations over the coming months).

In driving ESG innovations now used elsewhere, #BTC Mining again impresses. Eg: Lancium's “suspended animation” software which tasks when grid demand is high. The software has attracted attention of traditional datacenters seeking CO2 emission reduction bit.ly/39Ln1Ey

We also looked for evidence that the ESG case for #BTC can grow exponentially. We again found plenty of evidence. A year ago, there was 1 bitcoin mining company helping remove flared methane gas. Now there are 8 (6 removing methane in oil&gas), 2 removing methane from landfills

Most importantly, we asked ourselves whether other technologies or processes could do the job that Bitcoin does. For example, could flared methane be used for other good? Could flaring be reduced by better regulation?

We found no technology other than #BTC mining could economically use flared gas, as that would require build-out of high-voltage pylons @ $1M/mile, or gas pipelines @ $2M+/mile. Further, govt regulation of flaring had in some cases caused more venting: a far worse climate problem

This is a twitter-summary of a 2-months DD (due diligence). I know that not everyone has time for that, so we’re happy to share our models and research with other funds, fund managers and private investors who are looking to make sensible ESG decisions regarding #Bitcoin.