Note to Elon: Crypto Miners Are Part of the Solution to Curbing Greenhouse Gas Emissions
And just like that, Elon Musk has turned on Bitcoin.
In a tweet on Wednesday, the self-proclaimed “Technoking of Tesla” said his company—which announced in February that it bought $1.5 billion in Bitcoin—would be suspending vehicle purchases using the cryptocurrency. Musk cited crypto miners’ “increasing” use of fossil fuels, particularly coal, “which has the worst emissions of any fuel.”
The price of Bitcoin responded by dipping below $50,000, ending the day down more than 12%, its worst trading session since January.
Musk’s tweet comes a week after a new bill in New York was introduced that proposes to halt operations at all cryptocurrency mining facilities in the state for up to three years while an environmental impact study is conducted.
According to the legislation, individual crypto mining centers would be permitted to return to normal operations only if they’re found not to interfere with the state’s decarbonization goals.
I don’t question Elon Musk’s or the New York legislature’s good intentions, but I respectfully disagree with the underlying insinuation that crypto miners in particular are a threat to the climate.
Don’t get me wrong: The computer processing power needed to mine Bitcoin, Ether and other digital tokens is not insignificant. The University of Cambridge’s Bitcoin Electricity Consumption Index (CBEI) estimates that the global Bitcoin network, running at full capacity, uses about 147.8 terawatt hours (TWh) on an annualized basis, or almost as much as Sweden consumes every year.
That’s a big number, but it doesn’t take into account the percentage of Bitcoin mining that uses renewable energy. In a December 2019 report, CoinShares believed it to be 73%. Last month, ARK Invest’s Yassine Elmandjra said it was closer to 76%.
If those figures are accurate, then there really shouldn’t be any concern about crypto mining as it relates to greenhouses gas emissions. I believe New York lawmakers will find that to be the case, should the bill become law.\