Some people are concerned that mining Bitcoin and other cryptocurrencies would have a negative effect on the setting. “We are concerned about the increasingly growing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Tesla CEO Elon Musk said.
Tesla CEO Elon Musk declared late Wednesday that he was reversing course on his decision to embrace Bitcoin as a form of payment for vehicle purchases, in what can only be described as a “U-turn.” Musk announced that the electric vehicle maker is halting cryptocurrency transactions due to climate change issues, throwing the cryptocurrency’s prices into free fall.
Elon Musk, Tesla’s CEO, issued a statement on Twitter, saying, “We are concerned about the increasingly growing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
Some people are concerned that mining Bitcoin and other cryptocurrencies would have a negative effect on the setting. The following is the gist of the argument:
Process that consumes a lot of energy
Bitcoin is a cryptocurrency, a decentralised digital currency that was developed as a reward for’mining,’ a process that involves using computers to solve complex mathematical algorithms. The algorithms became longer and more complicated as the currency was mined more and more, and ordinary computers couldn’t keep up. Bitcoin is now mined using supercomputers with massive computing capacity. Naturally, these use a significant amount of energy. It’s a very energy-intensive process that currently relies on electricity produced from fossil fuels, particularly coal. According to a University of Cambridge estimate from 2021, bitcoin consumes more than 178 (TWh) per year, placing it among the top 30 energy consumers if it were a nation.
Climate change has a negative effect on the world’s weather
Furthermore, studies say that Bitcoin has a good chance of driving global warming on its own, releasing enough carbon dioxide to raise global temperatures “above 2°C in less than three decades.”
According to the latest available data from the University of Cambridge and the International Energy Agency, bitcoin “mining” consumes about the same amount of energy annually as the Netherlands did in 2019.
Investors believe Musk’s tweets are “inevitable.”
Tesla’s acquisition of Bitcoin months ago has been questioned by a few investors, according to news agency Reuters.
Ben Dear, CEO of Osmosis Investment Management, said in February, shortly after Tesla’s bitcoin holdings became public, “We are of course very concerned about the level of carbon dioxide emissions caused by bitcoin mining.” Osmosis is a sustainable investment firm that manages $2.2 billion in assets and has Tesla stock in some of its portfolios.
According to currency traders, Musk’s tweets on Wednesday were unavoidable.
“One of the greatest threats for the entire crypto industry was the environmental effects from mining bitcoins,” said Edward Moya, a senior market analyst at currency trading firm OANDA. “Over the last few months, everyone has been oblivious to the fact that Bitcoin consumes more energy than Argentina and Norway combined.”
Mark Humphery-Jenner, an associate professor of finance at the University of New South Wales, expressed concern about Tesla management’s hasty decisions, noting that environmental risks were well-known “before Tesla embraced bitcoin.”
Elon Musk, on the other hand, insists that he is still a firm believer in cryptocurrency. He tweeted, “We are still looking at other cryptocurrencies that use 1% of bitcoin’s energy/transaction.”
Elon Musk had previously stated in February that Tesla had acquired $1.5 billion in Bitcoin and intended to accept it as payment for electric vehicle purchases. This gave the digital currency some credibility, which many people had been sceptical of up until then. Tesla’s unexpected launch served as a visible spark in the cryptocurrency movement, sending Bitcoin’s prices up 16 percent on the same day, the largest one-day increase in a long time. Many saw it as a sign of cryptocurrency’s growing popularity as a payment and investment option.
Elon Musk’s decision to suspend Bitcoin transactions for Tesla vehicles on Wednesday, an announcement as unexpected as the previous one, sent shockwaves through the group. This time, Bitcoin fell as much as 15% in Asian trading, falling below $50,000, before recovering some of the losses, according to Bloomberg. As of 10:53 a.m. in Tokyo, it was down about 8% to $50,190. As people hurried to sell, there were rumors of outages at digital-token exchanges.
This original article was published here
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