Tesla, the environment and Bitcoin.
Updated: Feb 29
Tesla is a company that focuses on the design, manufacture, sale of electric cars, renewable energy, and its components: domestic batteries. In addition, it stands out for the development of certain sustainable technology for the work and home areas.
The recent purchase by Elon Musk through Tesla Motors of $1.5 billion in bitcoins and the existence of studies on the significant carbon emissions to the environment that the mining process of cryptocurrencies has, leaves in doubt the positive climate image of the company for many people.
A Massachusetts Institute of Technology (MIT) study entitled " The Carbon Footprint of Bitcoin " published on June 12, 2019 relates that the level of emissions produced by Bitcoin can be compared to the levels produced by the city of Las Vegas. And you may be wondering:
How is it possible for a currency that does not exist in a physical form to contaminate?
Although it may seem that bitcoin mining is more environmentally friendly than traditional mining, it is a large process that consumes a lot of electrical energy.
And with this it is understood that it is not the Bitcoin currency itself that pollutes, but the use of energy and the resources used for its utilization that cause this problem. Let's learn a little more about the process of cryptocurrencies to understand why they require so much energy:
The actions performed by bitcoin are recorded in a blockchain that is updated every time a new transaction is generated. Unlike a bank that has all the storage in a central location, bitcoin - and all cryptocurrencies - is fully decentralized and that is why it is distributed to thousands of computers around the world.
With no centralized source handling transactions, each person making a transaction plus each of the individual miners must provide power from their computers as each machine has access to the blockchain.
According to some current studies, it is estimated that some 150 quintillion equations are performed every second, which means millions and millions of computers that must run constantly. Following the cryptocurrency fever, electricity consumption has increased by about 30% in some cities around the world due to the amount of power needed by computers to mine cryptocurrencies.
Christian Stoll who is a researcher at the Center for Energy Markets at the Technical University of Munich, Germany and a researcher at MIT, then explains that this mining process produces immense energy consumption. And it is estimated that the world's bitcoin operations account for 0.2 % of the world's electricity consumption.
What does Tesla have to do with it?
The bitcoin price increased by 17% after the news made by Tesla Motors and the bitcoin was quoted at US$44,220 and therefore also the transactional use of the currency as a chain effect when the company enters the market. The worst part of all this is that the more bitcoin transactions increase, the more CO2 emissions will increase as a consequence of the required energy use. Hence the controversy is served with Tesla and its commitment to the environment.
This study talks about the emissions caused by the use of bitcoin, and gives an idea of how the mining process and carbon emissions affect the environment; but explains that it is difficult to project the real effect of the use of bitcoin on climate change, as well as alternatives in the mining process based on renewable energy.
Physical Currency vs Cryptocurrency:
However, not everything is negative in this regard because cryptocurrencies have the advantage of not needing to be printed and do not need ink, so no tree suffers for them and no energy is spent on all the machines involved in the complex assembly of a national banknote.
In short, their presence in the web world increases electricity consumption, but decreases the felling of trees, so it is necessary to make in-depth studies on the pros and cons of each case, and start thinking about applying measures of circular commendation from the technological perspective.
If you liked this article, don't forget to comment to generate debate around the topic. Tell us which currency you think is more sustainable, physical currency or cryptocurrencies.
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