Bitcoin and Tesla seem to have become two terms that can’t get away from each other. After pumping up the price in February due to their $1.5 billion investment into the cryptocurrency, only to cause a dip in March due to a 10% sell off of their portfolio, Tesla has certainly had an influence on the market. Last week the electric car company announced that they would stop accepting Bitcoin payments due to the fact that it had such a high carbon footprint and many miners are not taking advantage of renewable energy. While no one can deny this, with a little digging we found a few initiatives that indicate that Bitcoin is moving into greener pastures. According to a tweet by crypto insider, Scott Melker (also known as Wolf Of All Streets) pointed out that crypto miners primarily use renewable energy.
Why Bitcoin Has A Heavy Carbon Footprint
Due to the nature of Bitcoin mining, the process demands a substantial amount of electricity, and in areas where there is little renewable energy available (either through solar, wind, geothermal, etc. sources), this creates a stronger demand for fossil fuels. When fossil fuels are burned to create electricity, harmful pollutants are released into the environment that have damaging effects on everything it comes into contact with (including humans).
Mining Bitcoin by nature is an energy-intensive exercise as each miner on the network is using a large amount of electricity to solve the necessary complex cryptographic puzzle. Only one miner will inevitably solve it, however, hundreds of thousands of miners are using the same amounts of electrical power in their attempts. According to a BBC article, Bitcoin mining uses more electricity per year than Argentina.
Why Tesla Pulled The Plug In Support Of Renewable Energy
Understandably, this high energy consumption practice does not align with Tesla’s environmental values. The company is behind one of the first electric cars, using renewable energy sources to fuel it instead of environmentally damaging fossil fuels. Tesla CEO, Elon Musk, confirmed in a statement that they had canceled the Bitcoin payment option, citing concerns over its energy consumption and where the energy is coming from:
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.”
Why There’s Hope Beyond Elon Musk Affecting The Bitcoin Markets
In an interaction on Twitter, Musk and Jack Dorsey, co-founder of Twitter, had a conversation over the potential green initiatives Bitcoin could take in the foreseeable future. Dorsey commented that Bitcoin miners should strive to work hand-in-hand with renewable energy firms, ensuring that the power being used to mine Bitcoin the biggest cryptocurrency comes with greater eco-friendly benefits.
A whitepaper recently released by Dorsey’s company continues this sentiment, adding “By combining miners with renewables and storage projects, we believe it could improve the returns for project investors and developers, moving more solar and wind projects into profitable territory.”
Efforts across the Bitcoin and crypto mining industry have been put into motion, with many pools looking to greener options. A large portion of Bitcoin mining in China (where 75% of Bitcoin’s mining takes place, and over 60% of all power is powered by fossil fuels) has been moved to areas that use hydroelectric power sources like Norway, Iceland and Canada. Other Bitcoin miners have started utilising surplus natural gas that would otherwise be burnt to be disposed of. There are options out there, and many Bitcoin miners are taking them on.
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