The reason Tesla ended its support for vehicle purchases with BTC was because of the company’s concerns about the “rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal.” Sounds reasonable for a company that develops electric cars, doesn’t it?
First of all, the question of whether BTC is a waste of energy is not new and has been discussed by industry experts for a long time. Meanwhile, the mainstream media – the New York Times, Financial Times, and Bloomberg, to name a few – made headlines after Musk’s comments, blaming crypto for its huge energy consumption. They referred to the Bitcoin Electricity Consumption Index from Cambridge University, where the global total electricity consumption of Bitcoin miners is currently around 113 terawatt hours per year. What they failed to mention – intentionally or unintentionally – is that the latest study by the Cambridge Center for Alternative Finance found that 39% of all energy used in BTC mining comes from renewable sources.
Interestingly, Galaxy Digital released a report entitled “On Bitcoin’s Energy Consumption: A Quantitative Approach to a Subjective Question,” in which the company estimates traditional finance energy consumption to be around 260 terawatt hours per year, more than twice that Bitcoin industry. However, the estimates are only based on available data, so the actual number is significantly higher.
Another important note is that after the COVID-19 outbreak and the enormous global change towards digitization, we have to put the problem of crypto energy consumption in the broader context of internet use. As the media director of Greenpeace USA, Travis Nichols, emphasized:
“As web services grow and become more complex, the need for computing power will continue to increase over the next few years, and that will require a lot more energy.”
Also, Mark Cuban, billionaire investor and owner of the Dallas Mavericks, decided not to withdraw support for Bitcoin payments, arguing with Elon Musk:
“We know that replacing gold as a store of value will help the environment. […] The decline in the use of big banks and coins will benefit society and the environment. “
If we get back to Musk’s allegations against Bitcoin, they have had a negative impact on the industry. For example, a green bill in New York state would impose a three-year moratorium on crypto mining if passed by the state’s Senate. But every cloud has a silver lining, as they say. The good thing is that space can move faster towards sustainability by raising awareness of the crypto industry’s carbon footprints, as was the case with the global pandemic that forced governments around the world to turn greener amid COVID-19 Energy to work.
Cointelegraph reached out to experts in the crypto and blockchain industry to ask their opinion on the following question: How are all of these comments from Elon Musk affecting the entire crypto space?