Tesla to pull back Bitcoin investment over sustainability issues

Tesla to pull back Bitcoin investment over sustainability issues

In a recent twitter post, Tesla CEO and business magnate- Elon Musk announced that suspension of the feature of purchasing its electric vehicles using Bitcoin owing to the rapid consumption of fossil fuels, especially coal, during electronic mining of the cryptocurrency.

Although, he added that the company will not be selling its USD 2.48 billion holding in the digital currency and instead would use it once the mining operations become sustainable.

The news comes few days after Musk commented on Dogecoin on TV show- Saturday Night Live and asked his followers on Twitter whether he should accept payments in the form of Shiba-Inu led digital token.

It is worth noting that, digital currencies such as Bitcoin are neither fossil-based nor sustainable-powered. Similar to other electricity users, they purchase their power from a grid that has several generators attached to it.

Seemingly, through the IP address data of the computers that are connected to leading Bitcoin mining pools, the location of global crypto mines have been traced. So far in 2021, nearly 69% of the operations were carried out in China, with almost 50% of them in Xinjiang-which is a coal-fired region. 

Moreover, coal-heavy regions like inner Mongolia and hydropower-centric Yunnan and Sichuan have also shown prominence of mining.

As per a report by Nature Communications in April 2021, Bitcoin accounts for approximately 5.4% of the total electricity demand in China and is likely to consume about 350 TWh of electricity through 2024.

In the past, there have been claims that Chinese renewable energy was being curtailed due to the lack of grid capacity. In such situations, Bitcoin could have used the power which would have otherwise been wasted.

Citing sources, currently there is no shortage of electricity being transported where required. Long-distance transmission of energy has risen by nearly 44% in the last three years to 613 TWh in the year 2020- which is eight times than that consumed by Bitcoin, globally.  

Source Credit: https://www.livemint.com/opinion/columns/tesla-may-have-to-hold-its-big-hoard-of-bitcoin-for-decades-11621188988926.html