The cryptocurrency Bitcoin has experienced an unprecedented soar in the last few months. The price rose to never-seen-before heights, but the predicted crash also followed promptly. There was a man who was responsible for the price increase and the fall. A US billionaire Elon Musk has an eventful past behind him. As a co-founder of the payment service PayPal, he revolutionized the way people pay on the internet today. As a space pioneer, he amazes the world at what is possible through private initiative. On top of that, he is a carmaker and the owner of Tesla, which gave global electric mobility a considerable boost.

When he announced that Tesla will accept Bitcoins as a payment method, the digital currency experienced a considerable boom. But the good news was not long lived as Musk has brought the environmental problem of Bitcoin to the forefront with another statement. According to Musk, mining the currency consumes too much electricity. Therefore, Tesla will no longer allow Bitcoin as a means of payment in the future. In the statement, he expressed concern about the rapidly increasing use of fossil fuels for mining Bitcoin and, in his opinion, the energy consumption is insane. Tesla has not sold its Bitcoins but does not want to use them again until production of the cryptocurrency has switched to environmentally friendly energy.

70 Percent Comes from China

Currently, the production of Bitcoin and the transactions require large computing capacities. The electricity for this mainly comes from power plants that use fossil fuels. Because electricity can be expensive, you can find server farms located in countries with low electricity prices. The great interest in digital currencies has also caused the energy demand to rise sharply. Research shows that the global production of Bitcoin requires as much electricity as the consumption of the Netherlands . Around a half of a percent of global electricity consumption is due to Bitcoin.

70 Percent Comes from China
Bitcoin

Experts assume that China mines around 70% of the currency in the world. However, a lot of electricity is generated from coal-fired power plants there. Researchers have calculated that carbon dioxide emissions for mining Bitcoin correspond to that of a country like Sri Lanka or Jordan. But you can hardly reduce Bitcoin’s ecological fingerprint at the moment. In countries like China, fossil fuels are cheap by comparison. Therefore, there are no incentives to convert those power plants to use renewable resources.

One solution to the problem could be to switch to other forms of energy. A solution could be trading in emissions certificates that could create incentives to switch to renewable energies. Even experts already discuss other manufacturing processes. But these seem unrealistic; after all, many miners have invested a lot of money in their technology and the majority are currently against change. That suggests that we will not find an environmentally friendly solution to the creation of Bitcoin anytime soon. Instead, one has to assume the opposite. The rise in prices in recent months has increasingly brought cryptocurrencies into the headlines worldwide. Increasing prices encourage even more people to be enthusiastic about the currency, which in return produces further heat emissions and energy consumption. Elon Musk briefly turned the spotlight to the environmentally harmful business of Bitcoin and there is no end in sight to its popularity.