CEO of Tesla and SpaceX founder, Elon Musk, has again ruffled the crypto world by tweeting his plans for Bitcoin mining. He says there are more concerns about the amount of energy consumed in the mining process, which comes at a cost to the environment.
On Monday evening, Musk tweeted, “Spoke with North American Bitcoin miners. They committed to publish current & planned renewable usage & to ask miners WW to do so. Potentially promising.” It received a better response than his announcement on the 12th of May that Tesla would be suspending Bitcoin as a payment method for their vehicles.
Elon Musk is constantly finding ways to use more renewable energy through his businesses. With cryptocurrencies, it is no different. He explains in a tweeted statement that he is concerned about the number of fossil fuels used for Bitcoin mining and crypto transactions. He claims it has the worst emissions of any fossil fuel. Musk says that he believes cryptocurrency is a good idea. However, it cannot come at a significant cost to the environment if it wants to have a promising future.
Recently, Musk has been open about his preferred cryptocurrency, Dogecoin. He tweeted on the 13th of May, “Working with Doge devs to improve system transaction efficiency. Potentially promising.” In the crypto world, digital currencies like the second most popular, Ethereum, and the meme-inspired, Dogecoin, are challenging Bitcoin. They are the alternatives and are finding ways to improve transaction times and even offer lower fees, making them more popular in the market.
As cryptocurrencies are growing, the blockchain is growing even longer, meaning crypto mining is becoming more complex. Miners are essentially racing to solve highly complex mathematical calculations and, in the hope of solving it first, being rewarded with a lucrative coin. The process is becoming more complicated, so supercomputers are now being used to help tackle these equations every second of the day worldwide.
Musk is right to voice his concern about how unsustainable crypto mining is to the environment. Cryptocurrency farms that have vast amounts of computers can operate 24 hours a day. According to Digiconomist founder Alex De Vries, he estimated from March 2021, the amount of energy Bitcoin consumes is as much as the country of Norway.
Last weekend, the Chinese government began to crack down on using cryptocurrencies for payment, causing the dramatic Sunday slump. On Monday, major crypto exchange Huobi suspended its crypto mining facilities also. Around 65% of the global electricity used for mining is done in China, where coal generates electricity. It is the cheapest power globally, but it is rapidly increasing the carbon emissions as a result.
In terms of crypto mining as a renewable energy source, we should not expect a sudden change. Miners will generally seek the cheapest option because they want to gain maximum profit. But if one country starts to tackle this issue, others will soon follow.