Elon Musk released a statement that Tesla will no longer accept Bitcoin as a form of payment for its electric vehicles. The company said the decision was based on the increasing use of coal in Bitcoin mining.
“We are concerned about the rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
This coincided with a sharp decline in total crypto market capitalization, with $ 425 billion removed from valuations before bottoming at $ 2.06 trillion in the early hours of the morning (UTC). Bitcoin is down 10.5% in the past 24 hours.
The timing and overall message created confusion, leading to calls for publication of the source claiming increasing coal use in BTC mining.
Some have called this hypocritical because the mining of rare earth metals in the manufacture of lithium-ion batteries has an extremely harmful effect on the environment.
The Bitcoin energy myth has already been refuted
Tesla’s $ 1.5 billion Bitcoin purchase in February was a massive boost for the cryptocurrency industry. The company also announced that it would later start accepting BTC as payment for its vehicles, which it introduced about a month later.
Although Tesla’s adoption of BTC was fraught with multiple issues, including tax implications, the move was still viewed as a step forward in adopting cryptocurrencies.
For environmental reasons, Tesla has now withdrawn the option to buy with Bitcoin. They went on to say they won’t be selling Bitcoin and intend to use it once a more environmentally friendly source of energy is implemented.
Interestingly, the company also announced that they were dealing with other, less intense cryptocurrencies. Whether this applies to a payment option or a treasury asset is currently unknown.
“Tesla will not sell Bitcoin and we intend to use it once mining moves to more sustainable energy. We also look at other cryptocurrencies that consume <1% of Bitcoin's energy / transaction. "
In response, Bitcoin bull Anthony Pompliano pointed out that the majority of miners use renewable energy.
“Elon … you realize that 75% of miners use renewable energy, don’t you? This energy story has been exposed over and over again.“
The reason for this is simple economy. Hydropower is the cheapest source of electricity, and cost-conscious miners tend to flock to wherever cheaper electricity can be found.
Lithium-ion batteries are harmful to the environment
The tailpipe emissions from electric cars are indeed zero. However, the environmental impact of electric vehicles is felt further up the chain.
In an article titled “The Dirty Secret of Lithium Batteries: Manufacturing Leaves a Massive Carbon Footprint,” the authors claim that making lithium-ion batteries could emit 74% more CO2 than making a standard combustion car.
Added to this is the destruction and contamination of natural water systems resulting from the mining of earth metals, not to mention the resulting displacement of the indigenous people.
The head of the Asia research department of the German think tank SWP, Günther Hilpert, said the mining of rare earth elements is an extremely harmful and wasteful activity.
“Securing just one tonne of rare earth elements produces 2,000 tons of toxic waste and has devastated large regions of China.”
Bitcoin has an environment of high energy consumption. Most miners, however, use renewable sources. At the same time, making electric vehicles won’t save the planet.
Source: BTCUSD on TradingView.com