In a move that shouldn’t have surprised anyone, Elon Musk recently flip-flopped on his support for Bitcoin, announcing Tesla’s withdrawal from accepting the cryptocurrency as payment. In an odd tweet entitled “Tesla & Bitcoin”, he criticizes Bitcoin’s “rapidly increasing use of fossil fuels” and yet simultaneously states that Tesla will not be selling any Bitcoin (?).
Naturally, the news ruffled the feathers of a small portion of newbie crypto investors, bringing Bitcoin’s price down by a few percent and knocking $240 billion of the market. Recovery has been swift though, with the market already back to early May levels and coins like Cardano (ADA) and Polkadot (DOT) enjoying particularly impressive gains.
Wait, Musk Didn’t Know Bitcoin uses Electricity?
Clearly, the genius scientist Elon Musk would not have supported Bitcoin in the first place if he felt the energy consumption was untenable. As popular Twitter voice Preston Pysh points out “Did someone get yelled at by the government who pays you massive subsidies so you can stay in business each quarter?”. More likely, the entire stunt was simply part of Tesla’s green marketing campaign, an opinion echoed by Barrons in this article.
Irrelevant of Musk’s true reasons for ditching Bitcoin, the energy argument is so old now that most crypto OGs are bored of discussing it. The long-suffering Nic Carter has even changed his Twitter profile to “bitcoin energy guy” due to his commitment to Bitcoin energy education. He provides a seemingly inexhaustible tome of research debunking misguided energy criticism and explaining how Bitcoin uses mostly renewable or excess energy.
It’s a complex topic that even Carter admits lacks enough data to deliver exact numbers. However, the main point to note is that Bitcoin’s per transaction electricity cost is not representative of its energy usage or carbon footprint. Unlike the electricity used by Tesla recharging stations, for example, Bitcoin miners almost exclusively use renewable or excess electricity that would have otherwise gone to waste.
Since 59% of the U.S electricity used by Tesla comes from fossil fuel sources like coal and gas, it seems a bit disingenuous for Musk to criticize a network that derives the majority of its power from wind and hydroelectric plants in China.