Over the past two years, the popularity of cryptocurrencies has increased drastically. In Indonesia itself, our people tend to be more familiar with Bitcoin. Many people have succeeded in making big profits from bitcoin, but not a few of them have also lost a lot. The most recent news regarding bitcoin comes from Elon Musk, the CEO of Tesla. On May 12, Elon Musk tweeted, "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."
The tweet is a continuation of the news that Tesla has bought $ 1.5 billion of Bitcoin. The company also said it would start accepting bitcoin as a payment method for its products. He even added the hashtag #bitcoin to his Twitter bio which helped push up the price of it by as much as 20%.
How Is It Related to the Environment?
In order for Bitcoin to keep working, it needs electricity, a lot of it, which makes it needs a great amount of energy and the energy comes from mining. As the price increases, so does the energy needed. In the past two years, the energy consumed for Bitcoin has grown by over 200%. There is already so much research about the energy consumption of Bitcoin. In February, BBC reported that Bitcoin consumes more electricity than Argentina. It said, “If Bitcoin was a country, it would be in the top 30 energy users worldwide.”
Business Insider reported that according to research by Bank of America, “Bitcoin's energy consumption is comparable to that of major corporations like American Airlines, which flies over 200 million passengers a year. And each $1 billion in inflows into bitcoin uses the same amount of energy as 1.2 million cars.” The Guardian also wrote that the amount of electricity used to mine bitcoin “has historically been more than [electricity used by] entire countries, like Ireland”, according to Benjamin Jones, a professor of economics at the University of New Mexico who has done research about Bitcoin’s impact on the environment.
Another problem is that much of the mining of Bitcoin is concentrated in China, whose economy still heavily relies on coal, which makes Bitcoin unsustainable because it is fueled by unsustainable fossil fuels. Furthermore, there still isn’t any government body or organization that specifically tracks and supervises where Bitcoin is being mined and what type of electricity miners are using, which makes us couldn’t have a way of knowing whether they are using renewable energy or fossil fuels.
Other than environmental problems, Bitcoin is often associated with money laundering and illegal transactions. During its early days, Bitcoin was widely associated with the Silk Road, an online darknet marketplace, where users could purchase weapons and illegal drugs anonymously, according to Forbes. Reuters also reported, “At least 13% of all criminal proceeds in bitcoin passed through privacy wallets - which make it harder to track cryptocurrency transactions - in 2020, up from 2% in 2019, according to a study by the digital currency forensics firm.”
It’s very reasonable why Elon Musk is concerned about Bitcoin and decided to halt using Bitcoin as payment method. Musk also worries that some Tesla shareholders may be worried that the company is betting big on Bitcoin while also claiming to be a green energy company. Not to mention that environmental issues are a big subject right now. If Tesla continues to go big on Bitcoin, this may provoke another problem that would screw the company.