Elon Musk sent Bitcoin tumbling below $50K after announcing that Tesla would no longer accept Bitcoin until “Bitcoin becomes more green.” Setting aside the poor business sense of creating a direct to wallet in house Bitcoin payment solution and then immediately dumping it, setting aside the market manipulation that he is trying to do in Bitcoin and Dogecoin, setting aside how un-green SpaceX is; this move is based on false assumptions about bitcoin.
Bitcoin is actually a lot more green than people think. Yes, Bitcoin uses a lot of energy, no one is disputing that. And it is a problem that has to be addressed, no one is disputing that either. But Bitcoin is already working to solve that problem; and is largely more than people give it credit for.
Somewhere in America, a lump of coal is burned every time a book is ordered on-line.
That was an actual quote from a 1999 Forbes article. The same arguments against Bitcoin were being used by people when the internet was a baby. Now again, there were energy problems that were address in the internet, just as there are energy problems with Bitcoin. But the benefits far outweigh the negatives, and the negatives can and are being fixed.
Where would we be today without the internet? The internet has connected the world, increased education opportunities, and made it easy to post dank memes. We would not be the world we are today without the benefits the internet has provided. Bitcoin is the same. Bitcoin provides transaction stability to countries suffering from high inflation. Bitcoin allows companies to sell products worldwide quickly and easily without dealing with currency conversions and big banks. Bitcoin allows everyday users to relax knowing their money is secure.
Bitcoin provides benefits to the world, it gives hope to people, it allows people to fight back against Big Bank and Wall Street. Surely, just as the internet was, that gives Bitcoin a little leeway as it experiences its growing pains?
And the truth is, Bitcoin is already fairly green. Although there is some skepticism, there are many reports that over 70% of Bitcoin mining uses green energy, such as these two studies performed in 2019, by the International Energy Agency and CoinShares.
Although much of Bitcoin’s mining comes from China, known for its less-than-green energy, the mining centers are located in remote regions and are largely powered by hydroelectricity. Iceland and Norway have also made advances as Bitcoin mining hubs, again thanks to hydroelectricity.
And Green Energy will only become more entrenched as Bitcoin grows. Jack Dorsey, Twitter’s boss, released a white paper recently arguing this:
“By combining miners with renewables and storage projects, we believe it could improve the returns for project investors and developers, moving more solar and wind projects into profitable territory,”
The white paper argues that Bitcoin miners are unique thanks to their relatively flexible operation. They can move around if needed, all they really require is an internet connection. This can incentivize governments to build more green energy, as Bitcoin miners can provide the push for the initial investments, and can be attracted with cheap clean energy. Some places, like Quebec, are already doing this.
Bitcoin miners themselves are incentivized to use clean energy because it is so cheap and efficient. Mining involves getting the most out of a kilowatt hour, and clean energy allows miners to do that. They can mine more off of renewables like hydroelectric and solar, so they want to choose those over coal.
And Elon Musk agreed with this. When Jack Dorsey shared his white paper, Elon Musk tweeted in agreement.
What does this mean? Elon Musk clearly had an ulterior motive. Bitcoin is green, and it is getting greener. And it deserves some leeway because of the many benefits it brings. Elon Musk himself knows this. What was the real reason he suddenly turned against Bitcoin then?
I think we can all guess.