Tesla, an electric car company from Elon Musk, has the mission of energy sustainability. However, its recent $ 1.5 billion purchase in bitcoin (BTC) boosted the price of cryptocurrency and rocked the crypto market. Now, investors and experts criticize the company, saying that the rise of the digital currency also encourages its mining, which uses a lot of electricity and generates pollution.
The activity consumes a large amount of energy and, therefore, the company’s investment would go against its policy of protecting the environment. Most of the bitcoin mining comes from China, a country that uses mostly polluting sources in its plants, and its activity is intensified when the digital asset operates at a high level.
Tesla’s investment criticized
“Tesla believes that the sooner the world stops relying on fossil fuels and moves towards a zero-emission future, the better,” says the company in the description of its official website, demonstrating its mission with global energy sustainability. The company currently sells and develops electric cars, solar panels and also residential batteries under the mission of “accelerating the world’s transition to sustainable energy”.
However, an investor in the energy sector who declined to be identified told the TechCrunch that Tesla encourages bitcoin-driven fossil energy consumption. “There are people who have been doing this in Russia since 2018 and using coal as a source of electricity to run their mining operations,” he said. “The cost per transaction, from an energy point of view, only got more intense. Climate and cryptocurrency, I don’t see how these things come together ”, he concluded.
Garrick Hileman, head of research at crypto company Blockchain.com and visiting researcher at the London School of Economics, told the The Verge that the investment is at odds with Tesla’s mission. Additionally, the researcher says that the endorsement of Elon Musk, a large and reliable public figure, is another factor to consider in encouraging bitcoin mining.
Bitcoin price increases mining activity
As a general rule of thumb for any crypto, when the price of the currency in question is high, its mining activity increases worldwide, as it logically becomes more profitable. But mining cryptocurrencies is not an accessible operation across the globe, nor is it cheap. It depends directly on the local cost of electricity.
Equipment dedicated to mining is also expensive and usually needs to be purchased in quantity for the person or organization to actually be able to generate units of the crypto. Bitcoin is the most valued cryptocurrency in the world and has broken another price record after Tesla’s billionaire purchase.
Pollution is related to fossil energy sources
The biggest environmental problem surrounding crypto mining is high energy consumption. However, this in itself is not the central issue, but the source of energy used to do it.
The Bitcoin Electricity Consumption Index (CBECI), a Cambridge University project, analyzes energy consumption related to cryptocurrency mining. According to the index, China alone is responsible for 65% of all digital currency extraction in the world, followed by the United States and then Russia.
It turns out that China and Russia mainly use fossil energy sources in most of their plants, which in turn generate intense air pollution. This results in cheap electricity that attracts miners to operate in the country.
According to CBECI, bitcoin mining reached this Tuesday (09) the highest average level of energy consumption ever recorded in history, at 121.23 TWh (terawatt-hours). This index is higher than in countries like the Netherlands, the United Arab Emirates and Argentina. At the moment, cryptocurrency-related activity is equivalent to 0.58% of all electricity demand on the planet.
Elon Musk’s company positions itself in favor of an energetically sustainable future and for this reason it has been developing technologies for years that help society as a whole to approach this goal. Therefore, a company of such influence will inevitably be criticized at any time.
With information: TechCrunch, The Verge