A shock to cryptocurrency, to which Musk himself had contributed with strong approval in recent months. A reversal brought on by environmental concerns over the use of coal in the production of Bitcoin.
According to what Cnbc reports, the value of the cryptocurrency market was $ 2.430 billion at the time of the tweet. Three hours later, it was $ 2.06 trillion, or 365 billion less.
“We are concerned about the rapid increase in the use of fossil fuels for Bitcoin mining and transactions, particularly coal, which has the worst emissions of all fuels.”, Write the Tesla CEO Elon Musk, which however specifies that he will not sell the Bitcoins in his possession.
The Tesla Group will prefer all other cryptocurrencies that generate less pollution.
“Cryptocurrency is a good idea on many levels and we believe it has a bright future, but it can’t come at a cost to the environment.”Musk adds.
the Chief Financial Officer of Tesla, Zach Kirkhorn, said the company chose to invest in Bitcoin when looking for a place to store money it didn’t immediately need, in order to preserve liquidity while earning a return.
Bitcoin’s approval in recent months
In early 2021, Musk himself announced the ability to accept Bitcoin payments, bet on cryptocurrencies, and buy $ 1.5 billion in the first quarter. The simple insertion of the word “Bitcoin
Questions about Bitcoin’s environmental footprint are largely related to the how cryptocurrency is created. The generation process involves solving extremely complex calculations that require very powerful networks of connected but independent computers that process transactions in exchange for newly minted bitcoins and high performance processors (with highly efficient cooling systems to prevent overheating. ). the Bitcoin “ mining ”, literally mining cryptocurrency, stems from an energy intensive competition to solve a random math puzzle and earn Bitcoin. The more computers there are on the network, the more difficult the puzzle will be, the more energy it will take to beat the other computers, consuming more electricity.
How much does Bitcoin mining, or rather mining, cost in terms of energy?
Bitcoin mining consumes around 148 terawatt hours of energy per year, according to estimates by Cambridge Center for Alternative Finance. This is more than what Sweden uses in a year. However, the center also claims that the energy used by Bitcoin equates to about 1.5 years of wasted energy in the United States just from devices left plugged into outlets.
And if the company examines other cryptocurrencies, which consume less energy, it is not certain that they will not be able to use the cryptocurrency for transactions in the future, obviously “as soon as the mining will switch to more sustainable energy.
Thousands of comments and shares, although some bitcoin advocates dispute the high energy waste, as evidenced by his reviews and Musk’s tweet.
Bitcoin’s volatility has limited its adoption for payments, prompting some entrepreneurs to create stablecoins – cryptocurrencies tied to assets like the US dollar. However, the recent placement of a probe in the most popular stablecoin, tether, shows the need for transparency in a growing industry.