Cryptocurrency enthusiasts regard Tesla boss Elon Musk as a champion, but this week he questioned the future of digital assets and particularly criticized the carbon emissions of Bitcoin mining, which shocked the world .

“The energy usage trends in the past few months have been crazy,” Musk tweeted on Thursday, sharing a chart of the Cambridge Bitcoin Electricity Consumption Index (CBECI), which was his most recent sympathetic irony that caused the price of Bitcoin to fall.

Obtaining Bitcoin (price in India) is an energy-intensive task. The graph shows the evolution of its electricity consumption, which has been increasing since 2016, and will increase sharply at an accelerating rate every year in 2020, reaching the current level. 149 MWh (TWh) level. , A record high.

According to the International Energy Agency (IEA) analyst George Kamiya (George Kamiya), this is the same as Google’s overall energy consumption of 12.2TWh and the approximately 200TWh consumed by all data centers in the world (data centers that mine Bitcoin). ratio.

Deutsche Bank analysts said in a report: “If Bitcoin is a country, it will consume the same amount of electricity as Switzerland’s total each year.”

In fact, the International Energy Agency (IEA) predicts that the situation may deteriorate: if miners use the most energy-consuming equipment, its consumption may increase to 500 TWh.

Musk cited its energy consumption on Wednesday, especially the energy consumption of coal miners, saying that Tesla will no longer accept Bitcoin as a payment method for its electric cars.

This announcement dropped the value of the cryptocurrency by 15% to a two-and-a-half-month low, contrary to the situation at the end of March, when Tesla announced that it would accept the figure at a price of US$1.5 billion (approximately Rs 10,930 crore). currency. Invest in Bitcoin.

See also  The governor of the Central Bank of Nigeria says "digital currency will be reborn" but attacks variable cryptocurrencies – Emerging Markets Bitcoin News

prosperous profits
The promise of juicy rewards drove the rise of giant data centers dedicated to Bitcoin, which reached a market value of US$1 trillion (about Rs 73,365,550 crore) earlier this year and then fell back.

Cryptocurrency is earned by network participants called “miners” who use brute force processing capabilities under so-called “proof of work” protocols to solve deliberately complex equations.

“Proof of Work” is one of the basic principles of the most well-known cryptocurrency. The anonymous currency or anonymous organization created this cryptocurrency in 2008. The person wants to use a decentralized digital currency.

The system is designed so that every 10 minutes the network will reward someone who successfully solves the problem with some bitcoins.

But as the price of Bitcoin increases, people’s interest in acquiring Bitcoin and power consumption follow.

Last month, the scientific journal Nature published a study suggesting that emissions from China’s mining industry, which powers nearly 80% of the world’s cryptocurrency trade, could harm the country’s climate goals.

The country relies on lignite, a particularly polluting coal, to power some of its mining.

Bloomberg predicts that China will not be able to meet the needs of its cryptocurrency industry through renewable energy until 2060.

‘morning Call’
One way to reduce energy consumption is to get rid of the processor-intensive “proof of work” model, similar to the changes being considered for the Ethereum (Indian price) cryptocurrency.

But it is hard to imagine that Bitcoin will make such a change, which may reduce the security and decentralization of its network.

Laith Khalaf, a financial analyst at AJ Bell, said: “Tesla’s move may be a wake-up call for businesses and consumers who use Bitcoin, and so far they have not considered its carbon footprint.”

See also  Major Israeli investment banks invested US$100 million in Grayscale Bitcoin Trust Fund in December 2020 – Finance Bitcoin News

“This highlights that companies, consumers and investors still have a high degree of uncertainty regarding the long-term adoption of cryptocurrencies.”


(This story was not edited by NDTV staff, but was automatically generated from a syndicated feed.)