Tesla was right to dump Bitcoin, and they shouldn’t go back

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The relationship drama between Tesla and Bitcoin has developed over the past few months.

As with a bad (or good, whichever way you look at it) celebrity relationship, the initial coming together of the two technical “disruptors” was instantly controversial. Tesla began accepting Bitcoin as a purchase method for its cars in February 2021 after the company announced it had purchased $ 1.5 billion of the cryptocurrency.

A few short months later, on May 12, Tesla decided to stop accepting Bitcoin, with founder Elon Musk citing what many critics of the relationship had highlighted – Bitcoin’s dependence on fossil fuels and its impact on climate change.

“We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of all fuels,” announced Musk on Twitter.

There is some internet whispering that Musk and Tesla could reverse their decision in the near future. Musk himself has praised the concept of cryptocurrency, saying that Tesla “intends to use (cryptocurrency) for transactions once mining moves to more sustainable energies”.

That would be a bad name. Not just for the image of electric vehicles, but possibly for the entire planet.

The data is (finally) on the side of electric vehicles

You have probably heard at least one criticism of Tesla, or even the concept of lithium battery-powered electric vehicles as a whole.

Aside from consumer-facing concerns like range, charge, and running costs, many EV critics often boast that EVs are no more environmentally friendly than the average fossil-fueled vehicle – and in some cases could even be more carbon-intensive than conventional vehicles over the course of their life.

Most of the criticism is based on two points. The first is sourcing and refining the lithium for the batteries, which in itself is a carbon-intensive process, and the second is the power source to charge the vehicles themselves – when you need to burn coal to produce electricity to power your car it’s not exactly “green”.

These are arguments that we have all heard for at least the past decade. But while they had controversial merits in 2010, they now have very little merit.

As electric vehicle manufacturing has been scaled up, battery production has been localized, and electric vehicles are mainly charged from renewable sources such as hydropower and nuclear power, the data collected over the past three years for electric vehicles and their carbon footprint has been largely positive compared to traditional vehicles.

In 2020, studies from the Universities of Exeter, Nijmegen (in the Netherlands) and Cambridge (in the UK) showed that in 95 percent of the world driving an electric car is more climate-friendly than one that uses fossil fuels.

For example, if you were to buy a new Nissan Leaf EV in the UK in 2019, lifetime emissions (that’s the manufacture of the car plus 150,000 km of driving) would be about three times lower than the average new gasoline-powered car.

This has also been the case in other countries that have seen widespread adoption of electric vehicles, such as Norway and France, where almost all electricity comes from climate-neutral sources such as hydro or nuclear.

It’s true that around 50 percent of an electric vehicle’s carbon footprint is due to the manufacturing process alone. However, the carbon intensity of battery manufacturing has decreased as battery manufacturing becomes more localized and the factories themselves rely on renewable sources like the Tesla Gigafactory.

Independent studies, such as the one by Carbon Brief, have now come to the conclusion that an average electric vehicle produces between 100 and 150 grams of CO2 equivalent per kilometer (assuming 150,000 kilometers driven during the vehicle’s lifetime), while the average European car produces fossil fuels Fuel somewhere is around 250 grams of CO2 equivalent per kilometer.

That is all to say now that EVs are beginning to actually accomplish their mission of reducing CO2 emissions, and paying through a fossil fuel-reliant currency would be a huge step backwards.

Bitcoin is bad for the environment and that is unlikely to change

I am now very aware that half of the readers of this article will already angrily write a comment explaining how stupid, wrong, and indoctrinated I am about electric vehicles.

To that I would answer: “Grandpa, who let you on the computer again?”

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Whether you’re still clinging to an outdated and unsupported opinion because change is scary, or you’ve fallen completely in love with Big Daddy Musk’s plan to save us all with Mars-Spice, the point is that Bitcoin is bad for the environment and its use should be limited – especially by anyone who at least claims to reduce CO2 emissions.

In 2019, a study in the scientific journal Joule found that Bitcoin production is estimated to cause between 22 and 22.9 million tons of carbon dioxide emissions per year, which is somewhere between the levels of the entire countries of Jordan and Sri Lanka.

By 2020 that number had risen to 36.95 megatons of CO2 per year – a CO2 footprint comparable to that of New Zealand and an energy consumption comparable to that of the Netherlands.

Researchers from Cambridge now estimate that Bitcoin now accounts for around 0.5 percent of total global electricity consumption.

It is not an exaggeration to say that if Bitcoin continues to grow at this exponential rate, it could be among the most polluting things humans have ever invented.

Efforts are underway to make cryptocurrency “greener” – presumably (and hopefully) what Elon Musk is waiting for before accepting it again as a means of payment for Tesla.

Projects from Canada to Siberia have suggested Bitcoin becoming dependent on renewable sources like hydropower, and some sustainability experts have suggested that companies could buy “carbon credits” to offset the carbon footprint of the cryptocurrency.

However, the problem really lies in the design of Bitcoin.

Bitcoin is created when powerful computers compete against each other to solve complex math puzzles. It’s a very energy-intensive process – and one that relies mostly on fossil fuels, especially coal, which Elon Musk rightly pointed out, is the dirtiest source of energy of all.

Higher demand leads to higher Bitcoin prices which leads to higher demand which leads to higher prices …

As a result, more and more Bitcoin miners are using more and more powerful computers to compete against each other, which in turn require more and more energy.

Since it is becoming more and more popular, it naturally has to consume more energy, which makes the possibility of “sustainable crypto” with mass adoption unlikely, at least in the near future.

Could things change? Naturally. Humans are clever problem solvers and we keep coming up with opportunities to improve existing concepts. The very existence of EVs and cryptocurrencies are evidence of this.

But in 2021 you would be a pretty big hypocrite to buy your electric car with fun money on the internet.