Published in El Pais, 20 May 2021.
The crypto world has had better days. Last week Musk shocked the world and announced that Tesla would no longer be accepting Bitcoin as payment due to his concern about its impact on the environment, a complete about face to his previous praise of Bitcoin and Dogecoin. As controversial as his statement was it is no secret that mining requires a lot of energy and googling pictures of mining set ups will always show power stations next to it, so his concerns are not without merit. He reiterated his importance for cryptocurrency however and opened the possibility of accepting a greener coin and claims is working with dogecoin developers to make it more environmentally friendly but the question is, is that possible?
Blockchains can be hard forked which is when a developer drastically changes it so it is possible though unlikely to change Bitcoin though any changes will have negligible impact on the environment. So instead of focusing on the power consumption we should be focusing on where the power comes from. There are lots of renewable energy sources that miners can tap into and studies show that is exactly what they are doing. Roughly 70% of all Bitcoin is mined with renewable energy and if Musk is really concerned with the energy use of Bitcoin, he should be using his influence to convince governments to provide incentives for miners to use renewable resources rather than coal and gas.
There are also other cryptocurrencies using proof of stake which is significantly more environmentally friendly as you use existing coins to mint new ones rather than expensive mining equipment and electricity that Musk and other environmentalists should be more pleased with.
Bitcoin can be an energy drain but to outright dismiss it after pumping it up for the past few months is just negligible and market manipulative and shows just how little he understands the technology. We should praise those who work towards greener blockchain technologies without outright dismissing it altogether.