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Tesla’s Bitcoin about-face is a warning for cryptocurrencies that ignore climate change

Don’t be lulled into thinking that Elon Musk is some sort of expeert on environmrent. He plans to continue with Bitcoin, as well as with a multitude of rockets and space satellites – all mpowered by – guess what” plutonium and other forms of nuclear energy

Tesla’s Bitcoin about-face is a warning for cryptocurrencies that ignore climate change, The ConversationJohn Hawkins, Senior Lecturer, Canberra School of Politics, Economics and Society and NATSEM, University of Canberra  17 May 21

 Over the weekend, Tesla chief executive Elon Musk suggested his company could sell off its Bitcoin holdings, sending the cryptocurrency plummeting.

It followed Musk’s announcement earlier this month that his company would no longer accept Bitcoin in payment for its electric cars, due to the fossil fuels needed to create the digital currency.

Bitcoin is created via high-powered computers solving complex mathematical equations. These computers use a lot of electricity, which is often generated by fossil fuels. Tesla’s about-face is a blow to Bitcoin, the value of which jumped when Tesla got on board.

Tesla’s stance is a big winner for both the climate, and the company’s “green” reputation. The development has also shone the spotlight further onto the carbon footprint of cryptocurrency – an issue that will not go away soon.

how, exactly, is Bitcoin – and many other cryptocurrencies – bad for the environment?

It all comes down to the energy used to create it. Before a Bitcoin transaction takes place, the person spending the coin must be verified as the valid owner. And once the transaction is complete it must be digitally recorded in a database known as a “blockchain” ledger.

Unlike a traditional bank where transactions are centrally verified and recorded, Bitcoin’s ledger comprises a distributed database of users. They verify transactions by running complex mathematical problems through high-powered computers. The first user to solve the calculation and add it to the blockchain is rewarded with Bitcoin. The process is termed “mining”.

Over time, the Bitcoin system increases the complexity of the problems as more computing power is applied to them. In the early days mining could be done by geeks in their bedrooms using home computers. Now it mostly done using vast rooms full of very expensive specialised equipment, which only companies can afford.

The process uses a lot of energy. The University of Cambridge recently estimated Bitcoin used more electricity each year than the entire economies of Argentina or Sweden.

Some of this electricity comes from renewables. But analyses suggest most Bitcoin mining occurs in China, and the main power source is coal. A recent study in Nature concluded Bitcoin operations in China are on track to produce 130 million tonnes of greenhouse gas emissions in 2024 – more than the entire economy of the Czech Republic……….

May 18, 2021 - Posted by | 2 WORLD, ENERGY

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