In a white paper published on Wednesday, Mr Dorsey’s payments company Square and cryptocurrency investor Ark Invest argued that Bitcoin miners are the “key” to increasing the world’s renewable energy capacity by making solar and wind power more lucrative.
Mr Dorsey retweeted the paper with the comment “Bitcoin incentivises renewable energy”, to which Mr Musk replied: “True.” Ark’s chief executive Cathie Wood said the research “debunk[s] the myth that Bitcoin mining is damaging the environment”.
But academics and analysts specialising in renewable power questioned those claims, warning that they relied on dubious assumptions or cautioning that many other technologies could achieve the same goal.
Lucas Davis, a senior professor at Berkeley’s Haas School of Business who studies energy markets, told the Telegraph: “This article vastly overstates the role of Bitcoin…
In order to incentivize renewables further, crypto miners could sign long-term agreements to buy green electricity. That’s what major companies like Amazon.com Inc. do to help cut their carbon footprints.
It’s helped fuel a boom in renewable power assets in the U.S.
In their research, ARK and Square proposed that a renewable power project could be built without a grid connection, just to power a Bitcoin operation. That would speed up development, but also make the project riskier in the eyes of a lender as the grid connection might never materialize, making a development completely dependent on mining.
But part of the rapid decline in the price of renewables has also been thanks to cheap financing.
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The stand-off between the two is much more rewarding as Dorsey and Musk have been extremely vocal about Bitcoin, the latter reversing his favorable perception of the token due to environmental issues, which is no longer accepted as payment for Tesla.
On the Flipside
- Celsius Network’s CEO claimed Elon Musk is “a tourist in crypto” given his social media antics.
- The outcome of the meeting is likely to influence the price of Bitcoin, at least in the short term.
- The cryptocurrency community no longer wishes to associate with Elon Musk because of the impact his social media activity has on Bitcoin.
Billionaires Share Opinions on What Does Not View Them
Bitcoin is a store of value in the digital era, and some argue it is a hedge against inflation.
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There are so many existing incentives that the International Energy Agency expects wind and solar to account for around 12% of electricity demand by 2030, up from 5% in 2019.Wood says the new research ideas — in a paper by her ARK Investment Management LLC and Dorsey’s Square Inc. — “debunk the myth” that Bitcoin mining is damaging the environment. On Twitter, Dorsey said Bitcoin “incentivizes renewable energy.” Musk responded with one word: “True.”
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But there’s still the fact that the mining devours massive amounts of power.
Bitcoin mining now uses 66 times more electricity than in 2015, Citigroup Inc. said in a recent report.
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A bank would probably want to charge a higher interest rate on a project that plans to sell power to a Bitcoin miner than it would if the customer were Google.
“I don’t know how you’d assess the risk profile of a Bitcoin mining operation,” said Albert Cheung, head of analysis at BNEF. “You kind of want your offtaker to be around for 20 years, or at least 10.”
For now, lots of Bitcoin is being produced by the most-polluting source of electricity. Research from the Centre for Alternative Finance shows that Bitcoin mining is dominated by China, a country currently driving a boom in new coal plants.
In the second quarter of 2020, the latest data available, the world’s biggest polluter mined as much as 65% of the coins.
By comparison, Iceland and other Nordic nations, once seen as a green haven for Bitcoin, were producing less than 1% of the coins each.
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Thus, its ability to perform currency functions has been challenged both by researchers and investors. However, tech millionaires have used their position to infer positive undertones to crypto.
Jack Dorsey claimed in an article for London’s newspaper The Times, Bitcoin will be the only currency in 2030.
Similarly, Elon Musk proclaimed himself as the DogeFather, and through his market splash actions of allowing Tesla to accept BTC as payment, he was “chief” of Bitcoin.
However, Musk disassociated himself from Bitcoin but remained connected to Dogecoin.
In a string of tweets Elon Musk and Jack Dorsey, Twitter’s CEO, outlined a meet-up during the B Word event.
The Pro Bitcoin and the Former Pro Bitcoin
Tech billionaires Elon Musk and Jack Dorsey have agreed to discuss Bitcoin and other “Bicuriosities” during cryptocurrency events. Square, Ark Invest, and Paradigm support the B-Word event to help debunk Bitcoin myths promoted by mainstream media.
B Word’s primary goal is to educate and “explain how institutions can and should embrace” Bitcoin while raising awareness of areas that need improvements.
Elon Musk replied to the B word analogy tweet by Jack Dorsey. Dorsey invited Musk to present his curiosities during the event, and a date was set there and then.
Insider reported that this is the first instance the two will share the same stage in public.
Bitcoin has escaped the grey area of technology and is a decentralized innovation that creates a feeling of excitement as well as hopelessness. 7 of the 10 highest listed tech companies are juggling blockchain technologies. Tesla (NASDAQ:TSLA) was the first to adopt Bitcoin as a payment method before Elon Musk brought forth a probable environmental issue concern.
By William Mathis and Lars Paulsson A trio of Jack Dorsey, Cathie Wood and Elon Musk are promoting the idea that Bitcoin mining can be good for the planet actually. That’s not exactly true.
The basis of the idea is that mining crypto currencies uses a lot of power and can be deployed at any time.
That could help a developer make money minting coins at a time when there’s lots of wind or sunshine, but not much electricity demand. Making better use of wind and solar, where power generation can be intermittent, increases efficiency, lowers prices and helps encourage the green transition.
The theory is based on trends that are already happening, regardless of crypto.
The cost of renewable power is plummeting and an increasing share of energy is being supplied by electricity.
The price of bitcoin, which had dropped below US$30,000 this week, spiked to over US$32,000 afterwards.
But Musk again denied his public pronouncements on cryptocurrencies were trying to influence the price.
“The three things I own outside of SpaceX and Tesla of any significance are bitcoin by far and some ethereum and some doge,” he said, referring to three of the most popular cryptocurrencies.
“If the price of bitcoin goes down, I lose money. I might pump, but I don’t dump. I definitely do not believe in getting the price high and selling or anything like that.”
Meanwhile Dorsey, who is also CEO of Square – a US financial services and digital payments company – said he believes cryptocurrencies can bring about a peaceful planet.
“My hope is that it creates world peace or helps create world peace,” Dorsey told Musk.
Their traditional surplus of geothermal, hydro and wind power is rapidly shrinking. Iceland’s biggest utility said that no one would build more power capacity just to feed Bitcoin mining.
And by using coal to generate most of its power, harmful carbon emissions keep going up.
Pollution from mining coins in China is expected to peak in 2024, releasing as much carbon dioxide as all of Italy, according to a study published in Nature Communications this month.
Plus, there may also be better uses for renewable power than making Bitcoin, like decarbonizing existing energy demand that relies on burning fossil fuels. As Teslas and other electric vehicles replace gas-burning cars, they will need a lot more electricity.