musk dorsey bitcoin incentivises renewable energy

The Centre for Alternative Finance at the University of Cambridge in the UK estimates that mining bitcoin uses more electricity than the Netherlands does in a year.

To further incentivise renewables, crypto miners could sign long-term agreements to buy green electricity. That’s what major companies like Amazon do to help cut their carbon footprint.

It has helped fuel a boom in renewable power assets in the US.

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 would also make the project riskier in the eyes of a lender as the grid connection might never materialise, 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.

Musk had tweeted just a single word “True” on April 22, 2021.

That word was in response to Twitter founder’s argument in support of bitcoin being a key driver for renewable energy’s future. Jack Dorsey stated that bitcoin incentivises renewable energy, and Musk tweeted in agreement.

That word has now become the tool used by other bitcoin supporters to tackle Musk’s decision to drop bitcoin as a payment option.

Bitcoin holders are asking why he made the comment in April and changed his stance a month after.

Some part of the bitcoin community believe the decision by Musk to drop bitcoin as payment option is a move to direct investors to Dogecoin, which is the new favourite of the billionaire.

Hours before the announcement was made, Musk had asked his followers on Twitter if Tesla should accept Dogecoin as payment.

Musk dorsey bitcoin incentivises renewable energy

Out of 3.92 million votes, 78 percent voted Dogecoin should become a payment option for Tesla, and 22 percent were against the idea.

This survey was one of the events that led to the announcement of bitcoin being unsuitable as payment option for Tesla vehicles, as Musk had also used SpaceX launch to promote Dogecoin three days before.

Ripple effect of Musk and Tesla decision down Bitcoin, Dogecoin

Musk is an influential figure in the cryptocurrency market, and any decision he makes usually have an impact on how crypto investors react. This was reflected in the price movement of bitcoin and Dogecoin in the early hours of Thursday.

Bitcoin price fell from $52,984 per coin to $47,720, with holders losing over $5,000, as some investors moved to protect their loss or engage in profit taking.

Musk dorsey bitcoin incentivises renewable energy-iv

To complement this work, ARK Invest has contributed an open source model that demonstrates how bitcoin mining could augment these renewable + storage systems to supply a larger percentage of a grid’s base-load energy demand for comparable or lower cost unit economics.

“Bitcoin miners are unique energy buyers in that they offer highly flexible and easily interruptible load, provide payout in a globally liquid cryptocurrency, and are completely location agnostic, requiring only an internet connection,” the paper read.

Bitcoin miners are an ideal complementary technology for renewables and storage.

“Combining generation with both storage and miners presents a better overall value proposition then building generation and storage alone,” the research paper noted.

Musk dorsey bitcoin incentivises renewable energy-vi

There have been debate about the role bitcoin plays in the increasing use of fossils fuels, especially coal, which produces the highest emissions. Fossil fuels is used to mine bitcoin to make it available for the cryptocurrency market.

In a bid to discourage the continued use, Musk and Tesla have decided to discontinue the acceptance of bitcoin as payment, “Cryptocurrency is a good idea on many levels, and we believe it has a promising future, but this can not come at a great loss to the environment.

“Tesla will not be selling any bitcoin, and we intend to use it for transactions as soon as mining transitions into more sustainable energy.” Musk said.

The statement seen by Ripples Nigeria, stated that Tesla is weighing cryptocurrency options to replace bitcoin.

Musk dorsey bitcoin incentivises renewable energy-x

The cost of renewable power is plummeting and an increasing share of energy is being supplied by renewable electricity.

There are so many existing incentives that the International Energy Agency expects wind and solar to account for about 12% of electricity demand by 2030, up from 5% in 2019.

Wood says new research ideas – published in a paper by her Ark Investment Management and Dorsey’s Square Inc – “debunk the myth” that bitcoin mining is damaging the environment.

READ:Taxman has an eye on your crypto profits

On Twitter, Dorsey said bitcoin “incentivises renewable energy”. Musk responded: “True.”

But there’s still the fact that the mining devours massive amounts of power.

BUSINESSJack Dorsey, Cathie Wood and Elon Musk are promoting the idea that bitcoin mining could be good for the planet. This is not exactly true.

The basis of the idea is that mining cryptocurrencies uses a lot of power and can be deployed at any time.

That could help a developer make money mining coin at a time when there’s lots of wind or sunshine, but not much electricity demand.

Making better use of wind and solar power, where electricity 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 cryptocurrencies.

But the company plans to use only the crypto that uses, “1% of bitcoin energy/transaction.” or only sustainable energy.

Old tweet resurfaces to hunt Elon Musk

Some of the critic of bitcoin and other cryptocurrencies have argued their points through the climate change angle since the ponzi scheme allegation has failed to have a negative impact on the crypto market.

They say since bitcoin and the digital assets became popular, there have been an increase use in fossil fuels, which is damaging the environment. This argument was experiencing a slow like that of the ponzi until Musk gave it life.

READ ALSO: Elon Musk-backed Dogecoin now more valuable than Nigerian stock market

Since he released the statement, a tweet from him admitting bitcoin encourages sustainable energy has been trending.

I don’t know how you’d assess the risk profile of a bitcoin mining operation. You want your offtaker to be around for 20 years, or at least 10.”

For now, lots of bitcoin are 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 the boom in new coal power plants.

In the second quarter of last year (the latest data available), the world’s biggest polluter mined as much as 65% of the currency.

READ:How social media networks are used to lure people into investment fraud

By comparison, Iceland and other Nordic nations, once seen as a green haven for bitcoin, were producing less than 1% of the currency each.

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.

Pollution from mining bitcoin in China is expected to peak in 2024, releasing as much carbon dioxide as all of Italy, according to a study published this month in open access journal Nature Communications. And by using coal to generate most of its power, harmful carbon emissions keep going up.

There may also be better uses for renewable power than making bitcoin, including decarbonising existing energy demand that relies on burning fossil fuels.

As Teslas and other electric vehicles replace petrol and diesel cars, they will need a lot more electricity.

Other major polluting industries such as steelmaking, chemical production and aviation could also potentially use the cheap green power to make hydrogen.

Similar Posts:

Leave a comment