Elon Musk’s statements that Tesla will no longer accept Bitcoin as a means of payment have once again turned the spotlight on the topic of Bitcoin’s impact on the environment.
The words of Tesla’s CEO made specific reference to the consumption of polluting energy, in particular coal.
The impact of Bitcoin on the environment
The Bitcoin mining process has a high impact on the environment and requires a lot of energy. In fact, mining bitcoins is not at all convenient for a private citizen. The costs to solve the complex algorithms that underlie the blockchain consensus mechanism require real mining farms, rooms used with computers with particularly high performance processors which consume electricity, both to undermine and to validate the transactions, and ultimately also to cool the machines.
But how much does Bitcoin mining consume?
According to recent research by the University of Cambridge, which has released a special index called the Cambridge Bitcoin Electricity Consumption Index , Bitcoin mining requires more energy than that used by entire countries. Against this, a crusade has started.
To the New York Times, Bill Gates said:
“Bitcoin uses more electricity for each transaction than any other method known to mankind, so it’s not a big thing for the climate”
And while it’s true that a Bitcoin transaction consumes as much as 735 Visa transactions or 55,280 hours of YouTube video, it’s also true that on average a Bitcoin transaction is worth $ 16,000, while a Visa transition is worth $ 46.
But precisely this data must have embarrassed Tesla. After all, what is the sense that a company that produces electric cars, considered one of the solutions to pollution, then accepts a currency that pollutes? This was one of the arguments of HBO host and comedian Bill Maher. In reality, the issue has other aspects to address.
Bitcoin and energy consumption, the remedies
Does Bitcoin consume energy? Yes sure. But those who support Bitcoin are not necessarily an unscrupulous polluter. Bitcoin’s energy consumption is changing and evolving in favor of renewable resources.
Anthony Pompliano explained in recent days how progress is being made from this point of view. For example, Mongolia has banned mining in China , due to its high consumption of coal. Another region of China, Xinjiang, known for its high coal consumption, is now consuming 40-50% renewable energy. In Sichuan and Yunnan , Bitcoin mining farms run on hydroelectricity.
In addition, China is progressively losing its dominance in Bitcoin mining. Canada and the United States are also dominant in this sector , where energy from renewable sources is mostly used.
In addition, there are projects undertaken by leading players, such as Jack Dorsey’s Square and Cathie Wood’s 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 active in the search for a solution.
However, a 2018 Ark Invest research debunked this myth that Bitcoin is the killer of the world’s environmental system for its excessive energy consumption. Because more than Bitcoin consumes gold mining. And it is surprising instead to see the consumption of the traditional banking system, much higher than that of BTC . But no one seems to be scandalized by this.