- Tesla will no longer accept Bitcoin as a form of payment.
- Mining Bitcoin uses 149.6TWh yearly according to the Cambridge Bitcoin Energy Consumption Index (CBECI) – this equivalent to the amount of electricity consumed by Egypt.
- Bitcoin miners in the US eyeballs flared natural gas as a possible power source.
Owners and miners of the cryptocurrency were in for a rude awakening on Monday, 16 May, when Bitcoin lost nearly 8% of its value. The decision from Tesla’s CEO sparked fresh scrutiny into the cryptocurrency’s environmental impact. Due to concerns over the “rapidly increasing use of fossil fuels for Bitcoin mining and transactions,” Tesla has stopped purchases of its vehicles with Bitcoin. Tesla is depicted as a bastion against fossil fuel driven climate change, and Musk noted that they, “are looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”
The automaker won’t sell its Bitcoin at present and is estimated to have $2.5 billion worth of digital currency. The intention is to resume transactions with Bitcoin once mining transitions to more sustainable energy, according to Musk. “Cryptocurrency is good on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” the Tesla CEO stated.
“I love Elon, because he’s the first person in my opinion to really gain notoriety in this generation for going beyond what NASA even dreamt imaginable. I hope he focuses one day on the ocean as well, just as much as his curiosity for space,” the South Florida personal trainer Adriana, who has a passion for the environment, shared.
How Bitcoin Use Energy
In theory Bitcoins are produced through solving an increasingly complex computer riddle, which requires constantly increasing computing power to solve. This process is called mining. Successful miners are awarded a supply of Bitcoins and the frenzy for mining the last few Bitcoins is intensifying as an estimated 18.7 of the 21 million available Bitcoins has already been mined. The amount of energy required to run mining computers is often compared to entire countries, but it is not only the level of consumption that is of concern, but the energy source as well.
It is estimated that 65% of all Bitcoin mining occurs in China. Roughly 86% of China’s energy consumption comes from non-renewable sources and this is massively polluting. Of this 58% comes from coal, 20% from oil and 8% from natural gas. According to the Sierra Club global temperatures could increase by as much as 2 degrees Celsius over 30 years due to carbon dioxide produced by Bitcoin mining activities. This could have a dramatic impact on the environment.
Flared Natural Gas as Possible Power Source
Natural gas flaring is the controlled burn of natural gas at the wellhead using a flare which ignites the methane component in natural gas. Oil producers flare natural gas if they can’t find a way to process it.
“Miners tend to be based around areas where there tends to be surplus power. What is new…is this whole concept of taking gas flaring,” Jason Deane, Bitcoin analyst at Quantum Economics, shared.
Flaring burns off many of the greenhouse gasses in natural gas, but the International Energy Agency states that during 2019 the approximate 150 billion cubic meters of natural gas flared worldwide produced the amount of carbon dioxide as Italy. Using flared gas to power Bitcoin mining activities will not end emissions, but will put to use energy that is otherwise going to waste.
A Dirty Currency
“Bitcoin alone consumes as much electricity as a medium-sed European country. This is a stunning amount of electricity. It’s a dirty business. It’s a dirty currency.” Professor Brian Lucey at Trinity College Dublin stated. This sentiment is echoed by other economic authorities. The European Central Bank described the “exorbitant carbon footprint,” of crypto assets as “grounds for concern”, while Italy’s central bank maintains that TIPS (an instant payment system in Europe) had a carbon footprint that is 40,000 times smaller than that of Bitcoin in 2019.
Bitcoin’s price has risen by almost 70% this year so far. As it is increasing in value, the revenue for miners also increases, prompting more participants to mine the cryptocurrency. However, Musk is not the only one who is speaking out about the environmental impact Bitcoin could have. Treasury Secretary Janet Yellen noted that the digital currency is very inefficient for making transactions and uses a “staggering” amount of power.
