Story at a glance:
- Bitcoin “mining” uses a tremendous amount of energy — the same amount of energy used in the Netherlands in 2019.
- Tesla is looking at alternative cryptocurrencies that use less energy.
- “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” Musk said.
Elon Musk's Tesla has suspended its users from making purchases with bitcoin, citing the environmental impact of the cryptocurrency.
Bitcoin uses electrical current from high-powered computers to produce solutions to complex mathematical puzzles against other machines, and in order to do bitcoin mining, electricity, even from fossil fuel, is used.
"We are also looking at other cryptocurrencies that use <1% of bitcoin’s energy/transaction,” Musk said.
The amount of energy used to mine for bitcoin is equal to energy used in the Netherlands in 2019, according to the data provided by the University of Cambridge and the International Energy Agency.
Bitcoin is the world’s biggest digital currency, but it fell 17 percent from its March projections after Musk’s tweet. As of now, a single bitcoin is less than $49,600.
Musk, who embraces online culture and memes, first allowed users to use bitcoin for Tesla-related purchases in March.
“The environmental impact from mining bitcoins was one of the biggest risks for the entire crypto market,” Edward Moya, a senior market analyst at currency trading firm OANDA said, reported The Guardian. “Over the past couple of months, everyone disregarded news that bitcoin uses more electricity than Argentina and Norway.”
Chris Weston, head of research at broker Pepperstone in Melbourne, said Musk’s tweet hurt bitcoin’s reputation but at the end, his priority is being mindful of his carbon footprint.
“Tesla has got an image of being environmentally friendly and bitcoin clearly is the opposite of that,” Weston said, reported The Guardian.
“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” Musk said.
Bitcoin might have taken a hit from the tweet, while dogecoin, bitcoin’s much sillier counterpart, is on the rise and still welcome in Musk’s business.
Musk plans on using dogecoins to finance his commercial rocket company SpaceX to launch a lunar mission next year.
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