[ad_1]
Tesla just gave bitcoin a boost that will likely result in more greenhouse gas emissions from the energy-hungry cryptocurrency. After Tesla bought $ 1.5 billion in bitcoin and announced that it would accept bitcoin as a payment method in the future, the price of bitcoin hit an all-time high.
“It’s hard to imagine, frankly a more credible endorsement than that coming from people like Elon [Musk] who invent the future, ”says Garrick Hileman, head of research at crypto asset firm blockchain.com and visiting scholar at the London School of Economics.
When prices are high, bitcoin “mining” – creating new coins by verifying transactions – increases. But even though this mining activity occurs virtually, it results in greenhouse gas emissions that fuel a real-world climate crisis. This contradicts Tesla’s mission to “accelerate the world’s transition to sustainable energy.” With its adoption of bitcoin, it is accelerating the rise of a cryptocurrency that gobbles up energy in quite unsustainable, or at least inefficient, ways. intentionally.
Bitcoin was created to eliminate the need for a third party, such as a bank, to oversee financial transactions. But without a bank’s security systems, Bitcoin records are kept safe and accurate by forcing miners to solve ultra-complex digital problems. Miners need energy-hungry machines to solve these problems, which is the root cause of the climate pollution associated with bitcoin. It’s a system called “proof of work” that is deliberately difficult to deter people from trying to take back or corrupt records. It is also expensive to mine bitcoin because of the cost of the machines and all the energy they consume.
“It should be more profitable to play by the rules than to cheat, that’s really the whole idea behind it,” says Michel Rauchs, an affiliate researcher at the Cambridge Center for Alternative Finance. “And the only way to reliably do it online is to burn electricity through these computer puzzles.”
If bitcoin were a country, its annual electricity consumption would rank 30th globally. It would use a little less than the amount of energy that Norway consumes and a little more than Argentina, according to the Cambridge Center for Alternative Finance, which maintains an up-to-date estimate of Bitcoin’s energy consumption. Bitcoin’s energy consumption has increased steadily since October as the price of bitcoin has skyrocketed. That bubble might burst, but Tesla’s bid on bitcoin has given the price of bitcoin – and its carbon dioxide emissions – a further rise.
“I think this is worrying given that there does not seem to be any instrument to reduce the impact, other than the price,” says Susanne Köhler, a doctoral student at the Danish University of Aalborg who published a 2019 article on the environmental impact of bitcoin. Machines that mine bitcoin have become more efficient over time, but that hasn’t solved bitcoin’s energy problem. Because bitcoin was built on the principle of inefficiency, its puzzles get harder and harder as devices get better at solving them.
“This is something that, as long as this ‘proof of work’ mechanism is not changed, this situation will not change in the future either,” says Rauchs. “The higher the price of bitcoin, the more profitable it is to mine it. Thus, the more miners want to participate in this contest, the more electricity will be burned, regardless of the energy efficiency of the underlying equipment.
Other cryptocurrencies have started to move away from using “proof of work” as a kind of security system, Köhler points out. Emerging alternatives do not drain as much energy. A model called “proof of stake”, for example, does not require as many complex puzzles to validate transactions. Climate-conscious consumers may want to keep these kinds of differences in mind, whether they’re interested in cryptocurrencies or electric vehicles.
Buyers concerned about climate change might want to consider electric vehicles from other automakers, says John Quiggin, professor of economics at the University of Queensland who called Tesla’s move “environmental vandalism” in an email. . “If you’re concerned about the energy transition, maybe you should look to General Motors, who might be late for the party, but at least you can’t imagine they’re going to get into bitcoin.” , Quiggin said in an interview.
Tesla’s $ 1.5 billion purchase of Bitcoin would technically increase Tesla’s carbon footprint as a company. If it were considered an investment, it would be part of the company’s “indirect” emissions. Indirect emissions also include pollution along the supply chain and the use of its products. These indirect emissions already represent the majority of Tesla’s carbon footprint, as it does for many companies, according to its 2018 sustainability report. However, it did not publish figures on its indirect emissions as a company in its 2019 report.
Determining bitcoin’s total carbon footprint is even trickier. Miners are often on the move, looking for cheap electricity wherever they can get it. The source of this electricity can be difficult to trace. Most bitcoin is mined in China, where it can be powered by dirty coal or abundant renewable hydroelectric power during the country’s rainy season.
Bitcoin’s future carbon footprint is also difficult to analyze. New rules and policies – such as setting deadlines to increase clean energy or imposing a carbon tax on Bitcoin mining – could ultimately minimize the impact of bitcoin on the climate. But without a coordinated global effort to tackle climate change, miners could move on to evade regulations on bitcoin and its energy use.
Fortunately, the most terrible predictions of a bitcoin-based energy apocalypse did not come true. A 2017 study predicted that bitcoin mining would consume all the energy in the world by 2020. While 2020 had a lot of issues, this was not one of them.
[ad_2]
Source link