Elon Musk is playing on the nerves of bitcoin investors. After promoting cryptocurrency on several occasions, the billionaire announced Wednesday evening that Tesla would no longer accept it as a form of payment, citing environmental reasons. An announcement that, as often, could be part of a strategy to increase profits.
“We are concerned about the increasing use of fossil fuels, especially coal, in the bitcoin mining process and in transactions (…)
Cryptocurrency is a good idea in many ways, but it cannot be at the expense of the environment, ”Elon Musk wrote on Twitter. In the process, the price of bitcoin fell from around $ 56,000 to $ 46,000 in a few hours.
Elon Musk, however, clarified that Tesla was not going to sell the bitcoin the company owns and that it would resume transactions as soon as the energy source issue was resolved. He also indicated that Tesla would turn to other cryptocurrencies that consume less energy.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP— Elon Musk (@elonmusk) May 12, 2021
The billionaire put it on a few hours later, believing that bitcoin’s energy consumption in recent months was “crazy”.
Elon Musk’s announcement surprised many, especially since he posted a message appearing to contradict this view just a few weeks ago, in response to Twitter CEO Jack Dorsey, who claimed that bitcoin encouraged the development of renewable energies.
But Elon Musk is not his first contradiction. In recent weeks, he had actively promoted Dogecoin, a cryptocurrency initially thought of as a joke and which has seen phenomenal growth.
Before declaring Sunday, during Saturday Night Live, of which he was the special guest, that this same Dogecoin was a scam … then to mention two days later the possibility of buying Tesla with this cryptocurrency .
From there to conclude that the billionaire takes advantage of the variations in the price of bitcoin and cryptocurrencies that he himself causes to increase his wealth, by buying lower, there is only one step.
Unless he has another idea in mind. No sooner had he posted his first tweet when Reuters revealed that Tesla intended to enter the US renewable fuel credit market.
Elon Musk would thus wish to take advantage of the initiatives of the Biden administration to reduce CO2 emissions, and thus potentially pocket billions of profits by reselling credits to companies emitting greenhouse gases, in particular those from the oil sector. It would thus be in his best interest to show a “green” paw at this time.
Another hypothesis mentioned is the fact that he plans to mine bitcoin via Tesla, using renewable energies.
BITCOIN, AN ENERGY CONSUMER
The fact that bitcoin consumes a significant amount of energy remains, however, a reality.
Mining, or the creation of bitcoin, as well as transactions, is based on complex calculations that consume a large amount of energy via the computers on which these calculations take place.
According to a study published by Harvard University , until recently bitcoin consumed nearly 110 Terawatts per year, which represents 0.55% of global electricity production, or the equivalent of the energy used in one year by countries like Sweden or Malaysia.
However, if we consider that cryptocurrency aims to become a full-fledged international financial system, these figures must be put into perspective.
Thus, total energy consumption is only a fraction of the energy consumed by the traditional international financial system, and even less than gold mining, which bitcoin is often compared to as a safe haven.
And the real issue is not so much how much energy is used, but how it is produced. One of the criticisms that comes up often is that much of bitcoin mining takes place in China, where the use of energy from coal, one of the most important sources of Co2, is predominant.
But studies have shown that in reality, between 39% and 73% (an estimate that varies greatly from study to study, it is true) of the energy used by bitcoin comes from renewables.
All bitcoin and cryptocurrency promoters, however, agree, as Elon Musk did in his post, that reducing the environmental impact is one of the main challenges, especially if the growth of bitcoin continues at this rate.
And while many are already working on this issue, many cryptocurrency projects promise to use clean energy, such as Power Ledger , which offers to allow individuals, via its blockchain, to sell their green energy directly ( produce with solar panels for example) to neighboring households, without going through suppliers.
Until the problem is resolved, bitcoin should remain subject to criticism, with its detractors at least as numerous as its promoters, as is usually the case with any new technology.