Elon Musk, the founder of electric car manufacturer Tesla, has taken a u-turn on his decision to accept bitcoin for payment of electric vehicles, which has pushed the cryptocurrency’s energy usage into the spotlight. Some of the Tesla inventors, alongside environmentalists, have been very critical of the way bitcoin is “mined” using enormous quantities of electricity generated with fossil fuels, reported Reuters.
Musk on Wednesday said that he backed the concern shown by the inventors and environmentalists, mainly about the usage of coal, which he said had the worst emissions of any fuel.
Unlike conventional currencies, bitcoin is not concrete and not made of paper or plastic. It is created using high-powered computers across the world, making it consume a lot of power.
With such current rates, the “mining” eats up about the same amount of energy annually as the Netherlands did in 2019, says a study from the University of Cambridge and the International Energy Agency, reported Reuters. In addition to that, with millions of employees using computers in air-conditioned offices also contributes to the large amount of energy consumed.
Production of the cryptocurrency is also estimated to generate between 22 and 22.9 million metric tons of emissions of carbon dioxide annually, which is between the levels produced by Sri Lanka and Jordan, according to a 2019 study from a scientific journal called Joule.
There are increasing attempts to keep the industry’s environmental harm of mining in check. Some experts have said that companies could buy carbon credits to make up for the impact, reported Reuters.