(ABC4) – “Tesla has suspended automobile purchases utilizing Bitcoin. We’re involved about quickly growing use of fossil fuels for Bitcoin mining and transactions, particularly coal, which has the worst emissions of any gas.”
That was the message posted to Twitter on Wednesday by Tesla CEO Elon Musk, a frequent and vocal advocate for cryptocurrency.
“Cryptocurrency is a good suggestion on many ranges and we imagine it has a promising future, however this can’t come at nice value to the atmosphere,” Musk continues, saying Tesla will not sell any Bitcoin, however “intend to make use of it for transactions as quickly as mining transitions to extra sustainable vitality.”
In the event you’re unfamiliar with cryptocurrency, let’s break this down.
Cryptocurrency has been round for over a decade. It’s a non-tangible monetary asset, a “digital illustration,” kind of like a inventory – you possibly can’t maintain it, however you should utilize it like cash, buying automobiles and tickets to sporting occasions, and even making donations to nonprofits. The digital coin has attracted full communities, like those invested in Dogecoin, a cryptocurrency primarily based on a meme that Musk can be related with.
In keeping with Bitcoin, there are three main methods to acquire the digital foreign money: shopping for on an change, accepting them for items and providers (like shopping for a Tesla), and mining new ones.
No, you don’t want a pickaxe to mine bitcoin.
Let’s say you purchase a Tesla out of your neighbor, Steve, with bitcoin. To ensure your bitcoin is a real bitcoin, miners start to confirm the transaction. The entire transactions that people are attempting to confirm are gathered into containers with a digital padlock on them – “block chains.”
As Bitcoin explains, miners run software program to seek out the important thing to open that padlock. As soon as it’s discovered, the field opens and the transaction is verified. In case your good friend Jane is the miner that finds that key, they obtain a reward of newly generated bitcoins.
Presently, Blockchain.com – which presents the newest, real-time bitcoin transactions – stories it takes over 25 trillion makes an attempt to seek out that “needle in a haystack” key.
So whereas there are not any folks heading to bodily mines to gather Bitcoin, it wouldn’t be attainable with out actual miners.
To mine Bitcoin, and do just about something with cryptocurrency, you want electrical energy.
In keeping with the University of Cambridge Centre for Alternative Finance, Bitcoin – using, the mining of – makes use of an estimated 13.81 gigawatts of electrical energy yearly. In October 2015, when the college started monitoring Bitcoin’s electrical energy consumption, that annual estimated utilization was round 2.25 gigawatts.
How a lot is a gigawatt?
Whereas Doc Brown’s DeLorean in “Again to the Future Half II” wanted 1.21 gigawatts to journey by way of time, the U.S. Office of Energy Efficiency & Renewable Energy presents a greater understanding of how a lot one gigawatt of energy is: a watt is a measure of energy (and defensive finish for the Arizona Cardinals) and there are one billion watts in a single gigawatt.
Listed below are examples of how a lot energy is one gigawatt:
- 3.125 million photo voltaic panels
- 412 wind generators
- 110 million LEDs
- Roughly 1.3 million horses (if you happen to desire horsepower)
- 2,000 Corvette Z06s
To know how a lot coal is required to energy one gigawatt, we have to do some fast math. To measure coal consumption, we use kilowatt-hours. A kilowatt-hour is a unit of measurement to know how a lot vitality you’ll use if you happen to saved a 1,000-watt equipment operating for an hour. So, it will take 10 hours of a 100 watt mild bulb being on to rack up one kilowatt-hour.
To generate a kilowatt-hour of electrical energy, you’d want about 1.13 kilos of coal, in line with the U.S. Energy Information Administration.
Now, what number of kilowatt-hours are equal to at least one gigawatt hour? One million.
Meaning for one gigawatt-hour, you want about 1.13 million kilos of coal. To fulfill Bitcoin’s present vitality wants, you’d want about 15.6 million kilos of coal.
Musk says they’re “taking a look at different cryptocurrencies that use <1$ of Bitcoin’s vitality/transaction.” That might be 0.1381 gigawatts or about 0.16 kilos of coal.
Whereas Musk has expressed issues over Bitcoin’s vitality consumption, one other billionaire, proprietor of the Dallas Mavericks Mark Cuban, says the staff will proceed accepting Bitcoin and different cryptocurrencies “as a result of we all know that changing Gold as a retailer of worth will assist the atmosphere.”
Cuban references a 2021 article from MoneyWeek that explains that whereas Bitcoin does devour a terrific chunk of vitality, it could be extra environment friendly than conventional financial assets like banks and related political actions.
When you may not have the ability to flip your Bitcoin right into a Tesla, it’s possible you’ll quickly have the ability to use one other up-and-coming cryptocurrency – Dogecoin. Musk, dubbed the Dogefather, not too long ago requested his Twitter followers if his firm ought to settle for the digital coin primarily based on a meme.
Musk has also stated he’s “working with Doge [developers] to enhance system transaction effectivity.”