Elon Musk’s announcement that Telsa will stop accepting bitcoin payments for its electric vehicles due to environmental concerns is credited to lowering the price of bitcoin by more than 10 percent.
Musk rocked the cryptocurrency market when he tweeted on May 12 that he was “concerned about the rapidly increasing use of fossil fuels, particularly coal,” for bitcoin mining and transactions.
His concerns are not new. Environmentalists have long denounced the growing popularity of Bitcoin and were particularly vocal about it in the days leading up to Earth Day this year – because of its increased power consumption.
The environmental impact of Bitcoin and other cryptocurrency mining is perhaps the most controversial debate in the digital asset space in 2021. Many have so far accepted that Bitcoin mining is actually an environmental scourge due to the amount of energy it takes to function.
A decommissioned coal-fired power plant in New York state is coming back to life as cryptocurrency miners seek alternative sources of energy to operate. The company behind the coal-fired power plant plans to go public later this year and says it expects to become “the only publicly traded US Bitcoin mining company with its own power source.”
In China, the number of bitcoins mined fell significantly after a huge coal-fired power plant in Xinjiang flooded and shut down on the weekend of April 17-18. The blackout stopped at least a third of Bitcoin’s total global computing power.
Academics have been measuring the intensity of cryptocurrency mining and its impact on the environment for years. The bottom line is that it is harmful. Governments and banking institutions, including the European Central Bank and the Italian Central Bank, are beginning to listen.
It is estimated that Bitcoin could soon use more electricity than all of Australia and almost ten times more than Google, Microsoft and Facebook combined.
Some say Bitcoin could help the environment.
Following the concerns raised by Musk about Bitcoin’s energy consumption, global asset manager Ark Investment Management released a report arguing that the concerns were “misguided”.
Ark Invest insists that “the effects of Bitcoin mining could have a positive impact on the environment.”
Industry researchers have also pushed back, claiming that Bitcoin only contributes 2.3 percent of digital technology emissions.
Here are 25 quotes on how Bitcoin is affecting the environment.
Elon Musk, Tesla boss
“Cryptocurrency is a good idea in many ways and we believe it has a bright future, but it cannot come at great cost to the environment.” [SmartCompany]
Janet Yellen, US Treasury Secretary
“I don’t think Bitcoin… is widely used as a transaction mechanism. As far as it is used, I fear that it is often used for illegal finance. It is an extremely inefficient way to conduct transactions, and the energy consumption to process those transactions is staggering. ” [CNBC]
Charles Hoskinson, co-founder of Ethereum
“The more successful Bitcoin becomes, the higher the price rises; the higher the price, the more competition for Bitcoin; and therefore more energy is spent on mine. ” [CNBC]
Economist Nouriel ‘Dr. Downfall‘ Roubini
“Since the fundamental value of Bitcoin is zero and would be negative if a decent CO2 tax were levied on its massively polluting energy-consuming production, I predict that the current bubble will eventually end in another bankruptcy.” [Business Insider]
Andrew Yang, former presidential candidate now running for Mayor of New York
“As the mayor of NYC – the world’s financial capital – I would invest to make the city a hub for BTC and other cryptocurrencies” (Twitter)
As the mayor of NYC – the world’s financial capital – I would invest to make the city a hub for BTC and other cryptocurrencies.
– Andrew Yang🧢🗽🇺🇸 (@AndrewYang) February 11, 2021
Professor Brian Lucey, Trinity College Dublin
“Bitcoin alone consumes as much electricity as a medium-sized European country. That’s an amazing amount of electricity. It’s a dirty business. It’s a dirty currency. ” [FinanciaTimes]
Ark Invest on Bitcoin helps the environment
“In our view, the concerns about Bitcoin’s energy consumption are wrong. Contrary to consensus thinking, we believe that the impact of Bitcoin mining could have a positive impact on the environment … We show that renewable energies without Bitcoin mining could only meet 40% of the grid needs, but 99% related to the commercial ‘subsidies with Bitcoin mining. ” [Seeking Alpha]
Nic Carter, General Partner at Castle Island Ventures
“As with any other energy-consuming industry, it is up to the crypto community to recognize and address these environmental concerns, to work in good faith to reduce Bitcoin’s carbon footprint and ultimately to show that the social value that Bitcoin offers is worth the resources that are required to maintain it. ” [HBR]
Bill Gates, Microsoft founder
“Bitcoin uses more electricity per transaction than any other method known to man, so it’s not a great climate thing.”
“Bitcoin’s carbon footprint of 37 million tons of CO2 is still tiny compared to other digital industries. The total GHG emissions from digital technology are estimated at 1,600 million tons, with Bitcoin contributing around 2.3% of digital technology emissions. “(Twitter)
Bitcoin’s climate footprint of 37 million tons of CO2 is still tiny compared to other digital industries.
The digital technology’s total GHG emissions are estimated at 1,600 million tons, with Bitcoin about 2.3% of that
Emissions from digital technologies. pic.twitter.com/n3hWiFfpxm
– Arcane Research (@ArcaneResearch) February 16, 2021
Michel Rauchs, researcher at the Cambridge Center for Alternative Finance
“It is really by design that Bitcoin would use that much electricity. This won’t change in the future unless the Bitcoin price drops significantly. “
“While we agree that the amounts are ridiculous right now, that’s still half the amount of inactive home appliances used in the US.” [CNBC]
“It doesn’t matter whether there are new, more efficient machines on the market. You will just use more and more machines, but it will not decrease overall power consumption. ” [CNBC]
David Gerard, author of “Attack the 50 Foot Blockchain”‘
“Bitcoin is literally anti-efficient. So, more efficient mining hardware doesn’t help – it just competes with other efficient mining hardware. This means that Bitcoin’s energy consumption and thus its CO2 production only spiral outwards. It is very bad that all this energy is literally wasted in a lottery. ” [BBC]
Meltem Demirors, Chief Strategy Officer at CoinShares
“The energy consumption itself is not bad. Sending and saving e-mails consumes energy. However, we don’t assume that emails are bad because they use energy. ” [The Guardian]
“What we have here are people trying to decide what is good energy usage or not, and Bitcoin is incredibly transparent in its energy usage while other industries are much more opaque.” [CNBC]
Andrew Hatton, Head of IT at Greenpeace UK
“[The] The rapidly growing hunger for electricity is just an early symptom of an even bigger problem. As online services are getting bigger and more complex, the need for computing power will inevitably increase over the next few years, and more energy will be required for this. ” [CNBC]
Carol Alexander, Professor, University of Sussex Business School
“More and more electricity is being used. This means that the network difficulties will also increase (and) more miners will be added because the hash rate increases. ” [CNBC]
Laith Khalaf, Financial Analyst, AJ Bel
“Environmental issues are an incredibly sensitive issue right now, and Tesla’s move could serve as a wake-up call for businesses and consumers using Bitcoin who had previously ignored its carbon footprint.”
“Tesla’s decision is certainly putting pressure on other large companies that are accepting Bitcoin to review their practices, as boardrooms will now be wary of ESG investors in the shareholder register.” [CNBC]
Ben Dear, CEO, Osmose Investment Management
“We are of course very concerned about the level of carbon dioxide emissions generated by Bitcoin mining. We hope that once the Bitcoin projects are complete, Tesla will focus on measuring their full range of environmental factors and disclosing them to their market. ” [Reuters]
Sanna Setterwall, advisor at Corporate Sustainability Advisory South Pole
“It is (Bitcoin) not a sustainable investment and it is difficult to make it sustainable with the system on which it is built.”
SJ Oh, former Bitcoin trader, Hong Kong
“Mostly, I think the Bitcoin industry will make concerted efforts to be environmentally friendly. Tesla is one of the greenest companies in the world, so I’m sure they will find out. ” [Reuters]
Yves Bennaim, Founder, Switzerland-based 2B4CH
“It’s not that much bitcoin that’s the problem. People say it is energy intensive and therefore polluting, but that is simply the nature of the energy we use today. As Bitcoin goes up, there will be more incentives to invest in renewable energy sources. “
Sasja Beslik, Head of Sustainable Business Development, Bank J. Safra Sarasin, Zurich
“I still think that the big players will refrain from Bitcoin for these particular reasons – on the one hand because of the way in which it is mined, a very negative climate angle and on the other hand the associated compliance and ethical problems.”
Jack Liao, CEO of the Chinese mining company LightningAsic
“The goal of every miner is to make a profit, so they don’t care what kind of energy they use, whether it’s hydro, wind, solar or coal.”
Alex De Vries, Founder, Digiconomist Research Platform
“Renewable energies are extremely volatile and not ideal as a continuous form of electricity. The problem is, the miners who use cheap fossil fuel will last the longest, simply because it’s the cheapest and more stable source. “
Harald Vranken, Associate Professor, Faculty of Computer Science, Open University of the Netherlands
“There are only a few companies that offer Bitcoin mining systems. When governments restrict the manufacture or import of this equipment, they rob miners of the tools with which to suck up all that energy.
“If the (Bitcoin) price goes down, mining will be less profitable and miners will stop.” [Mic]
David Granzin, chairman of the planning committee that gave Greenidge, a coal-powered company that mines Bitcoin, a building permit in New York State
“We know Bitcoin is a huge waste of energy. But we are bound by the law. ” [The New Yorker]
Hear GHOGH Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, Bubbles and Biden. He talks about the risk factors for Bitcoin as an investment asset, including risk of origin, speculative market structure, regulation and environment. Are the broader financial markets in a massive speculative bubble?