Tesla suspends bitcoin payments for vehicle purchases over the negative environmental impact of cryptocurrency mining
Allana AkhtarMay 13, 2021, 06:54 IST
Insider
Tesla has suspended vehicle purchases made using bitcoin, according to a tweet from CEO Elon Musk.
Crypto is a good idea . but this cannot come at great cost to the environment, Musk said.
Tesla reported buying $1.5 billion worth of bitcoin in February.
Tesla has suspended vehicle purchases made using bitcoin, according to a tweet from CEO Elon Musk. We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel, Musk said in a tweet Wednesday.
Can you love Bitcoin and the environment at the same time? The digital currency depends on so-called miners whose high-powered computers run day and night, soaking up electricity to perform the calculations used to verify transactions. Since almost two-thirds of mining takes place in China, where coal is the biggest source of electricity, that means more emissions. Supporters argue that Bitcoin’s carbon output is a drop in the global bucket, and that a switch to pollution-free power sources is a
Elon Musk. Kirstine Rosas/Pixabay
When electric car maker Tesla said in February it would buy US$1.5-billion worth of bitcoin and start accepting it as payment, billionaire boss Elon Musk had little to say about the cryptocurrency’s wasteful energy consumption despite the obvious inconsistency with his firm’s green credentials.
And when fellow bitcoin bulls Jack Dorsey and Cathie Wood last month backed a report claiming that combining cryptocurrency mining and renewable energy projects could be good for the environment, Musk praised the paper as “true”, even though its optimistic and overconfident assumptions smacked of greenwashing.
So, while it’s an encouraging development to see Musk’s latest tweet acknowledging bitcoin’s inconvenient truth, namely that energy-inefficient mining algorithms by some measures consume more power than entire countries, the speed of his overnight conversion is a little discombobulating. Not least for the crypto fans hanging on Musk’
Can you love bitcoin and the environment at the same time? The digital currency depends on so-called miners whose high-powered computers run day and night, soaking up electricity to perform the calculations used to verify transactions. Since almost two-thirds of mining takes place in China, where coal is the biggest source of electricity, that means more emissions. Supporters argue that bitcoin’s carbon output is a drop in the global bucket, and that a switch to pollution-free power sources is already underway and likely to accelerate.
1. How much power is involved?
That’s hard to say. In 2018, BloombergNEF pegged the amount consumed by activities related to bitcoin at 20.5 terawatt-hours of electricity a year. At about the same time, Morgan Stanley was estimating as much as 140TWh. The Cambridge Centre for Alternative Finance keeps a running estimate of annualised use: It jumped from 6.6TWh at the start of 2017 to 67TWh in October 2020 to 121.9TWh in early February as prices s