Elon Musk's statements that Tesla will no longer accept bitcoin as a means of payment have once again highlighted the problem of Bitcoin's impact on the environment.
The words of the CEO of Tesla referred specifically to the consumption of polluting energy, in particular to coal.
The impact of Bitcoin on the environment
The Bitcoin mining process has a high impact on the environment and it requires a lot of energy. In fact, bitcoin mining is not convenient for a private citizen. The costs of solving the complex algorithms behind the blockchain consensus mechanism require mining farms, rooms with high-performance computer processors that consume electricity, both to mine and to validate transactions, and ultimately to cool the machines. .
But how much does Bitcoin mining consume?
According to recent research from the University of Cambridge, which has compiled a special index called the Cambridge Bitcoin Electricity Consumption Index, mining Bitcoin requires more energy than entire countries use. And against this, a crusade has begun.
In the New York Times, Bill Gates stated:
"Bitcoin uses more electricity per transaction than any other method known to mankind, so it's not a big climate thing."
And while it is true that a Bitcoin transaction consumes up to 735 Visa transactions or 55,280 hours of YouTube videos, it is also true that on average a Bitcoin transaction is worth $ 16,000, while a Visa transaction is worth $ 46.
But it is precisely these numbers that must have put Tesla to shame. After all, what is the point of a company that produces electric cars, considered one of the solutions to pollution, then accepts a polluting currency? That was one of the theses of HBO host and comedian Bill Maher. Actually, there are other aspects of the question.
Bitcoin and energy consumption, the solutions
Does Bitcoin consume energy? If it does. But Bitcoin supporters are not necessarily unscrupulous polluters. Bitcoin's energy consumption is changing and evolving in favor of renewable resources.
Anthony Pompliano explained in recent days how progress is being made in this regard. For example, in China, Mongolia has banned miningprecisely because of its high carbon consumption. Another region of China, Xinjiang, known for its high consumption of coal, currently consumes between a 40% and 50% renewable energy. On Sichuan and Yunnan, Bitcoin mining farms run on hydroelectric power.
Furthermore, China is gradually losing its dominance in Bitcoin mining. Canada and United States They are also entering this sector in a big way, with most of the energy used coming from renewable sources.
In addition, there are projects undertaken by important actors, such as Jack Dorsey of Square and Cathie Wood of Ark Investment, which support the production of Bitcoin with renewable energy as a means of ecological transition.
In short, Bitcoin's "stakeholders" are well aware of the environmental problem and are also actively looking for a solution.
In any case, Ark Invest research in 2018 dismantled this myth that Bitcoin is the killer of the global environmental system due to its excessive consumption of energy. This is because gold mining consumes more than Bitcoin. More surprisingly, the consumption of the traditional banking system is much higher than that of BTC. But no one seems to be surprised by this.
The entry Bitcoin, energy and the environment: why BTC is not bad was published first in Crypto report.