We’ve all been scouring the news websites in search of Elon Musk’s latest crypto-related Tweet or how his previous social announcements have been affecting the crypto markets. A few words from the Tesla CEO and self-proclaimed “Dogefather” can swing markets and the opinions of the general public in a heartbeat.
This, and lesser factors, have plunged the world’s most popular cryptocurrency, Bitcoin, into a pool of fluctuating prices and moral uncertainty, as Musk’s concerns of negative environmental impacts caused by Bitcoin mining have recently been voiced.
Musk had announced Tesla’s decision to stop accepting Bitcoin as payment due to these environmental concerns earlier in May. This came not too long after the electric car manufacturer welcomed crypto payments in March. These decisions seem to be as volatile as the crypto markets, as Musk’s
But on Monday, another Tweet from Musk came with “potentially promising” news, as a meeting between himself, a few top Bitcoin miners, and CEO of MicroStrategy Michael Saylor took place over the weekend in hopes of forming a Bitcoin Mining Council.
The meeting had focused on forming an organization to initiate reporting standards and ESG goals on Bitcoin mining to promote sustainability. The forming of a Bitcoin Mining Council would “standardize energy reporting, pursue industry ESG goals, and educate and grow the marketplace” according to Saylor.
The Bitcoin price climbed about 4% shortly after Musk tweeted his involvement in the discussions among top Bitcoin miners regarding the sustainability of the digital currency. At one stage, prices jumped from about $38,000 to $39,600 and dropped to $39,000 – showcasing the power of a Musk tweet.
Blockcap, a Texas-based miner, responded to Saylor’s tweet announcing the council with emphasis on their use of clean energy by stating that “56% of our electricity comes from carbon-free sources, & we will continue to work together with energy innovators & providers to constantly increase that amount.”
According to an estimate from the University of Cambridge, the mining of Bitcoin consumes more than 113 terawatt hours per year, which can be compared to some entire countries, such as the Netherlands using slightly less at 110 terawatt hours per year.
When comparing energy consumption at this level, it’s clear that Tesla’s concerns over environmental impacts are certainly valid. However, arguments have been made that although Bitcoin mining does consume a lot of energy, a large portion of it may be renewable energy and that the consumption related to the production and operations of fiat currencies far outweigh that of Bitcoin.
According to a Money Week article earlier this year, “Half of global mining now takes place in one region of China – Sichuan. Why? Hydroelectricity. During the rainy season, its electricity prices are as low as anywhere in the world. Roughly 5% of Sichuan bitcoin mining power comes from nuclear or burning coal. 95% is from renewables.”
If a Bitcoin Mining Council were to form, it could have a positive impact not only on the environmental impact of Bitcoin mining and clean energy consumption, but could also sway the general public’s perception of cryptocurrency and its general sustainability.