Bitcoin guzzles energy. Therefore, it’s bad for the environment. That’s how the story often goes in media outlets like The New York Times. Not knowing much about how Bitcoin works (or, indeed, how even energy works!), the public is likely to agree with a blanket statement like this.

But those who have studied the relationship between Bitcoin and the environment beg to differ. At a recent webinar on cryptocurrency and energy, Brianna Lee Welsh of Reneum and Adrian Chng of Fintonia Group did just that, sharing their industry insights on the reality of Bitcoin mining and its usage today.

Could Bitcoin turn out to be good for the environment after all? Let’s take a closer look at the issue.

Is Bitcoin good for the environment?

It’s true that Bitcoin consumes the most energy among all the cryptocurrencies in the world. Running the Bitcoin network costs us an estimated 130 terawatt-hours (TWh) of electricity per year, enough to power a small country, as the oft-bandied-about comparison goes.

Also Read: “We want to facilitate organisations’ Web3 transition from bits to atoms”: Brinc CEO Manav Gupta

One reason is that Bitcoin, being the world’s largest and oldest public blockchain network, is more widely used than any other.

But more importantly, mining Bitcoin uses Proof of Work (PoW) validation, a computational method that gets increasingly energy-intensive the closer we get to the total supply cap of 21 million BTC. It is this unique structure that guarantees Bitcoin’s resilience as a store of value.

Those are the facts of the matter. But, even as we acknowledge their truth, we maintain that Bitcoin can be good for the environment.

Why? Firstly, Bitcoin uses significantly less energy than traditional banking. The global banking infrastructure is vast, yet its energy usage has gone largely unscrutinised. However, new research shows it is a much more energy-intensive enterprise than Bitcoin.

Second, renewable energy makes up a large share of the energy used to run Bitcoin. In fact, Bitcoin can and does drive renewable energy adoption, which most people would agree is good for the environment.

Bitcoin vs traditional banking: which uses less energy?

Rather than comparing Bitcoin energy consumption with that of countries, it is perhaps fairer to compare it against the existing banking infrastructure.

Now, quantifying the total energy consumption of the global financial industry is a huge undertaking, and this field of research is still in its nascent stages.

Nonetheless, a few attempts have been made to estimate the industry’s energy use.

A May 2021 report by Galaxy Digital estimates 263.72 TWh per year, more than twice what Bitcoin consumes.

More recently, in June 2022, Michel Khazzaka produced an even more damning report about the state of banking. Khazzaka put the energy consumption estimate at close to 5,000 TWh a year, or 38 times Bitcoin’s 130 TWh!

Even without the data, it’s not hard to imagine that the global banking ecosystem is hugely energy-intensive.

“All we can say with confidence is that the global financial sector has a significant environmental cost,” writes Forbes’ contributor Martin Rivers.

“Its skyscrapers, computer systems and jet-setting bankers are not helping climate change. We can also safely assume that central banks and their money printers are no greener.”

On the other hand, Bitcoin allows financial transactions to be carried out with much greater efficiency and potentially less cost to the environment.

With traditional banking, there would be numerous entities and layers involved in checking, cross-checking, and confirming the transaction. But with Bitcoin, all the necessary validation is computed nearly instantaneously, making it less energy-intensive as a system.

Using clean energy to mine Bitcoins

Comparing total energy consumption is important, but it is not the only metric that counts today. In our fight against climate change, the source of energy is an important dimension to look at as well.

All things being equal, we would naturally choose renewable or clean energy (such as wind, hydro, or solar power) over non-renewable fossil fuels.

And it turns out that Bitcoin is one of the world’s industry leaders in green energy adoption. As of Q4 2021, nearly 60 per cent of the global Bitcoin industry ran on renewable energy, according to the Bitcoin Mining Council.

The surprising synergy between Bitcoin and clean energy boils down to two features:

First, Bitcoin mining is location-agnostic. Because the work is done by computers, it’s possible to set up a mining farm next to a clean power source (typically outside the city). Also, Bitcoin mining can take place around the clock, which reduces energy wastage.

Also Read: As the demand for energy soars, climate tech is here to save the day

In combination, these two factors explain why clean energy often works out to be one of the cheapest and most efficient power sources for Bitcoin mining.

Some proponents believe that Bitcoin mining actually incentivises clean energy adoption by driving demand and rewarding investments in renewable energy infrastructure.

How Bitcoin can help us fight climate change

Bitcoin has been unfairly vilified in popular media as an energy hog and an environmental disaster. But, in reality, this isn’t the case.

Not only is the Bitcoin network much more energy-efficient than the global financial infrastructure, but much of the power it consumes also comes from clean energy sources. Furthermore, Bitcoin can help fight climate change by incentivising clean energy adoption.

As ESG (environmental, social, and governance) concerns become ever more pressing, Bitcoin is surely a worthy addition to any responsible-minded investor’s portfolio.

Yet there are significant risks and challenges around investing in Bitcoin, as most professional investors would know.

Fintonia Group created the Fintonia Bitcoin Physical Fund as a solution for wealth managers, trustees, and other professional investors.

Managed by a regulated fund manager with licenses in Singapore and Dubai, the Fund is an institutional-grade product that eliminates most of the regulatory and security risks around investing in Bitcoin.

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Startups in Southeast Asia should focus on growing with good fundamentals rather than chasing valuation only, according to Carmen Yuen, General Partner at Vertex Ventures SE Asia & India.

“Companies to be mindful of margins and expenses, whether in good or bad times. At the end of the day, they need to demonstrate that they are running a good business so that even in a challenging environment like this, they can still raise funds to continue their growth plans,” Yuen said in an interview with e27.

Also Read: ‘Economic crises become less important when investing with a longer-term mindset’: Qin En Looi

She also feels that Southeast Asia needs to grow together and produce more quality unicorns. The region, as fragmented as it is, has slightly more than 50 unicorns, whereas India has already surpassed 100 unicorns. Depending on their performances, some of the region’s unicorns could even fall off the unicorn horse.”

“The purpose of a business is to achieve profitability. This is a discipline that all companies should have, regardless of macroeconomic conditions. It should not be a behavioural change only when there is a crisis,” she cautioned.

Based in Singapore, Vertex Ventures SE Asia & India is an early-stage investor and one of Southeast Asia’s oldest VC funds. It has invested in nearly 80 startups at their seed and Series A/B rounds. Vertex’s portfolio companies include Grab, Patsnap, Nium, FirstCry, Licious, Aruna, the Parentinc, and Sunday.

Carmen noted that despite the prevailing funding winter, Vertex has not slowed down its investment pace. Neither did it invest more during the last 18 months, when funding activity was exuberant, and valuations were sky-high.

“We have found a cadence that works for us; that’s about 12 new companies a year. We believe this is a good time to find gems at a fair valuation with the market correction.”

Also Read: ‘The next generation of unicorns will be from greentech’: Wavemaker Impact’s Steve Melhuish

The Vertex GP, who earlier held various key roles at EDBI and Spring Singapore, also touched upon the climate tech sector in the region during the interview. Southeast Asia contributes to environmental damage, yet the region stands to gain by participating in climate tech opportunities from an economic angle. 

“We will suffer from the impact of climate change, which includes floods that disrupt our coastal communities given the sizeable shorelines and low-lying areas in Southeast Asia. This year, we have already witnessed floods in Indonesia, including Aceh, where more than 18,000 people were displaced,” she remarked.

“Our region is young, with an average age of 29, many aspire to live a better life contributed by good GDP growth leading to higher discretionary consumption. This includes electrifying our homes, owning motorbikes or cars, and embracing air travel. In 2019 alone, we contributed 1,600 MtCO2 to the environment. Left unchecked, this could balloon in no time,” Yuen warned.

Southeast Asia is in a unique position from a supply perspective. Although the region covers only four per cent of the earth’s land surface area, it comprises six of the world’s 25 biodiversity hotspots, is responsible for 15 per cent of the world’s fish production, and harbours extensive seagrass beds, coral reefs and mangrove mass. 

“Consequently, our region is in a prime position to be a major global supplier of nature-based carbon credits,” she said.

In her opinion, offline events such as Echelon provide an avenue for founders to take a pause from their daily grind and meet with and hear from investors and gather feedback regarding their businesses. It allows them to access intelligence to connect the dots better. This could perhaps lead to more sound decisions being made.

Also Read: Nothing can truly replace the offline element of community building: Yinglan Tan

These events are also platforms for VCs to interact with peers; the last two years were challenging as we mostly met via Zoom and rushed through many investment opportunities. This is an excellent time to catch up, exchange notes and discern which innovations we want to back.

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Carmen Yuen will speak about the state of Southeast Asia’s tech startup ecosystem today and what’s in it for 2023 in a panel discussion at Echelon Asia 2022, which aims to provide intimate and focused discussions on key topics and business matching services to facilitate business-driven connections during the two-day event. 

e27 has curated and invited key stakeholders of startups, investors, corporates, and ecosystem enablers to drive towards fruitful business outcomes at Echelon. Here’s the full list of the speakers for the 2022 edition, which will be co-located with SWITCH at Resorts World Sentosa from 27 to 28 October 2022. Learn more here. 

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Blibli set to raise US$528M in local IPO at US$3.5B valuation
The listing is slated for November 7; It is the third Indonesian unicorn going public on the local exchange IDX, following Bukalapak and GoTo Group.

Indonesia edutech firm Binar Academy lays off 20% of employees
The decision is attributed to an uncertain global economy; According to CEO Alamanda Shantika, Binar plans to strengthen its core business, streamline operations, and optimise investment efforts.

Indonesian quick commerce firm Bananas to shut shop, plans to pivot
Bananas says it couldn’t find unit economics that worked for the company; It has also laid off 36 employees; The company is pivoting to a new business outside the e-grocery space; The firm is backed by East Ventures, YC, and MDI Ventures.

PropertyGuru forays into home services with Sendhelper acquisition
With the Sendhelper deal, PropertyGuru.com.sg will become a one-stop destination for property seekers to find, finance, own, manage and maintain their homes.

Japan’s Tokio Marine leads insurtech unicorn bolttech’s Series B round
The round values bolttech at approximately US$1.5B; bolttech, which quotes ~US$50B worth of annualised premiums through its technology-enabled insurance exchange, will use the money for global growth.

Endowus acquires Hong Kong multi-family office Carret Private Investments
With this acquisition, the Endowus group of companies will now vertically integrate to serve the needs of different client segments and look to provide superior investment and advisory solutions.

HK’s voice AI company Fano Labs nets funding from Gobi Partners-led fund
Fano Labs’s AI voice analytics system Callinter analyses all the banks’ audio records and automatically flag recordings that might contain mistakes, and misconducts; Callinter can process audio 100x faster than humans.

Love, Bonito acquires Singapore-based activewear label Butter
The deal follows Love Bonito’s series C funding last year where it raised US$50M led by a Chinese VC giant Primavera; Love, Bonito has also bought a minority stake in healthcare startup Moom Health.

Asia-focused SPAC TenX Keane raises US$60M in US IPO
The SPAC, led by Xiaofeng Yuan, who is currently the chairman of Shaanxi 38Fule Technology, will look for target businesses with valuation between US$200M and US$600M.

HK-based chat management firm ImBee bags US$5M Series A funding
The lead investor is DCM Ventures; A SaaS company, ImBee provides one central inbox for instant communication channels with business tools and workflow automation, helping brands communicate with their customers and teams.

Indonesian agritech firm Beleaf raises US$2M seed funding
The investors include Alpha JWC, Sembrani Nusantara Fund, and Arise; Beleaf sells produce such as leafy greens and melons directly to restaurants as well as individuals through supermarkets and e-commerce platforms.

East Ventures leads pre-seed round of Indonesian fintech firm Pocket
Mostly catering to young families, the Pocket platform allows for digital accounts and connected cards to be allocated to different family members with their own spending limits, reporting, and analytics.

Singapore Web3 fitness app Gritti bags US$1.7M in seed money
The investors include Lingfeng Innovation Fund, Youbi Capital, and Bixin Ventures; Gritti is a move-to-earn app that incentivises users to exercise and maintain a healthy lifestyle.

What is a Web3 browser and how does it work?
Web3 browsers like Brave allow users to access DApps, integrate cryptocurrencies and surf over the decentralized web with greater privacy and security.

How Neliti aims to help improve accessibility to scientific knowledge in Indonesia
Neliti builds a free-to-use website builder and content management system that creates web interfaces for academic content providers.

‘SEA needs to grow together and produce more quality unicorns’
Vertex Ventures SEA & India General Partner Carmen Yuen the purpose of a business is to achieve profitability. This is a discipline that all companies should have, regardless of macroeconomic conditions.

How can design-thinking promote consumer trust in the digital world
By adopting design thinking as a practice, platforms can keep themselves grounded on their users and fulfil their users’ needs for trust.

The race of Web3 and crypto infrastructure vs big tech
For Web3 to mature, there must be recognition of the value of sovereignty, and UX must continue to improve.

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The post Ecosystem Roundup: Blibli set to raise US$528M in local IPO, Binar Academy lays off staff, East Ventures-funded Bananas to shut shop appeared first on e27.

At e27, we have kickstarted a new articles series called work-life balance to learn more about tech enablers and executives and their lives beyond working hours.

Bernadette Cho oversees the Singapore office and cohort at Entrepreneur First in Singapore, enabling the most ambitious and talented people to build startups from scratch.

Before Entrepreneur First, Cho served as the Chief of Staff at Funding Societies and Chief of Staff to the Co-Founder at Grab. She was the first product marketing hire at Grab and was previously the Head of Product Marketing for APAC Talent Solutions at Linkedin.

You can read Cho’s thought leadership articles here. 

In this candid interview, Cho talks about her personal and professional life.

How would you explain what you do to a five-year-old?

Entrepreneur First builds companies through talent investing, which means we identify brilliant people with the potential to become founders even before they’ve decided on a startup idea and set them up with the best platform to succeed.

What has been the biggest highlight/challenge of your career so far?

The biggest highlight (and challenge!) was starting my role at Entrepreneur First a few months before COVID-19 struck, and we had to pivot to a fully-remote model. It was inspiring to see the team pull together to serve our founders and reimagine how we ran and recruited our cohorts.

Similarly, it was equally exciting to see founders reinvent their business models, work around a lack of lab access, and still continue to drive outsized outcomes!

How do you envision the next five years of your career?

Hopefully, similar to the last five — working with driven, curious people who are looking to make things better than when they found them!

Also Read: What makes Desmond Yong thrive in ambiguous situations

What’s something about you or your job that would surprise us?

Early-stage professionals make for some of the strongest founders. They have fewer fixed beliefs and are willing to challenge existing ways of working and thinking, which enables them to design more future-focused and customer-centric solutions.

Do you prefer WFH or WFO, or hybrid?

I enjoy hybrid! Maybe it’s a result of the past few years, but I find a balance of home and office work is more fulfilling than only one or the other.

What would you tell your younger self?

Don’t chase titles; chase curiosity and let that lead you instead.

Can you describe yourself in three words?

Idealistic, impatient, learning.

What are you most likely to be doing if not working?

Exploring, but specifically places that are friendly for dogs and newborns!

What are you currently reading/listening to/ watching?

Crossroads by Jonathan Franzen (late to the party!) and Drop the Ball by Tiffany Dufu.

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