Bitcoin Tanks as Tesla Suspends Bitcoin Payments Citing Environmental Concerns
Tesla's CEO Elon Musk was back on his favorite platform, Twitter, on Thursday, May 13 to inform the world of the EV maker's decision to suspend accepting Bitcoin as a form of payment.
In his Twitter post, Musk explained the move was environmentally focused, citing worries over the "rapidly increasing use of fossil fuels for Bitcoin mining transactions, especially coal, which has the worst emissions of any fuel."
Musk assured his followers that he is still a cryptocurrency fan: "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."
He finished by explaining that "Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies to use <1% of Bitcoin's energy/transaction."
After Musk's post, TradingView shared the staggering details of how quickly Bitcoin tanked:
Musk has clearly been doing more homework on the effects of Bitcoin on our planet, given just in March he'd said Tesla was accepting Bitcoin as payment for the company's EVs.
Musk's recent post raises a number of questions regarding cryptocurrency mining, and just how bad it might be for the environment.
If we compare different cryptocurrencies' energy consumption, Dogecoin has been marked as the second-least power-hungry cryptocurrency, consuming 0.12 Kilowatt/hour (KWh) per transaction, as Benziga reports. Compare that with Ethereum and Bitcoin that consume 62.56 KWh and 707 KWh per transaction, respectively, and you understand Musk's concern.
The environmental concerns around Bitcoin mining
You might not think that cryptocurrencies require huge amounts of energy to work. Given they're all virtual, why would you? However, as the Sierra Club pointed out, their environmental impact is huge.
The reason their impact is so big is down to their mining process. Digital currency mining requires solving complex mathematical problems that are only possible through specialized computer software on high-powered computers. And these computers need a lot of power to run, burning loads of fossil fuels, notably coal, in the process.
One clear-cut example of Bitcoin mining's huge environmental impact is that it consumes more energy than entire countries, like Argentina. Another study we covered recently explained that this energy-sapping process could generate as much as 130.50 million tons of CO2 annually in China alone. China currently hosts over 3/4th of the global cryptocurrency mining operations.
The Sierra Club study pointed out that if Bitcoin mining processes carry on the way they are, in 30 years' time they could increase the world's temperatures by 3.6 degrees Fahrenheit (two degrees Celcius). The environmental impact would be catastrophic.
With these facts in mind, it's easy to understand Musk's desire to stop using the cryptocurrency. However, that's not to say there aren't solutions, as Musk himself stated that as soon as new, more environmentally-friendly, methods of Bitcoin mining are put in place, that Tesla would reconsider accepting it.
Companies like Highwire Energy Partners in the U.S. are turning to harvesting natural gas to power these complex, high-powered cryptocurrency-mining computers. There are solutions out there, they just need to be put into place.