Back in 2018, there was a study that estimated that the world was collectively spending more energy to mine Bitcoin (BTC 1.21%) than was being produced by all of the solar panels on the planet combined. Some of those conclusions have since been disputed, in part because the solar industry as evolved considerably since then, but it’s still no secret that mining Bitcoin is tremendously energy intensive.
A more recent estimate suggests that Bitcoin mining already consumes more energy than Argentina and could soon eclipse the entire continent of Australia in terms of energy usage. There have been innumerable studies around this topic over the past decade, so this should not be news to anyone. Especially someone like Elon Musk.
Image source: Getty Images.
A quick 180
Tesla (TSLA 8.22%) made waves a few months ago when it disclosed that it had invested some of its corporate cash into the dominant cryptocurrency and would even start accepting Bitcoin as payment for vehicle orders.
The move was widely seen as validation that perhaps Bitcoin could actually become a form of payment for goods and services, a milestone that has remained largely elusive to mainstream consumers to date. Many have also pointed out that Tesla made more money trading Bitcoin in the first quarter than it did manufacturing and selling actual electric vehicles (EVs).
Yesterday evening, Musk made the surprise announcement that Tesla would be reversing course and no longer accept Bitcoin for payment due to environmental concerns.
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” the eccentric billionaire and meme enthusiast tweeted in what resembles a press statement. “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.”
One could argue that adopting Bitcoin undermines the very principles of why Tesla was started in the first place.
Flippancy with Earth hanging in the balance
It’s been roughly 3 months since Tesla touted Bitcoin as a payment option, but the environmental costs of the leading cryptocurrency have been known for years. There is no new information here.
Meanwhile, Musk just proclaimed that SpaceX would accept Dogecoin (DOGE -1.01%) as payment to fund a mission to launch a satellite dubbed Doge-1 to the moon. While Dogecoin may not have comparable environmental impacts, the cryptocurrency that was started as a joke is still hardly a viable medium of exchange for mere mortals.
Musk is notoriously impulsive, and these are hardly among his most reckless decisions. Do you remember when he announced that Tesla would close almost all of its retail stores in favor of online sales back in early 2019, only to backtrack just a couple weeks later after realizing the financial ramifications of breaking a bunch of commercial leases?
I guess this is sort of like that?
