Elon Musk recently set the cryptocurrency community ablaze when he announced Tesla’s withdrawal in accepting Bitcoin as a payment medium.
The company’s sole reason for backpedaling on its decision to accept Bitcoin is tied to the asset’s level of energy consumption which Tesla believes is highly unsustainable despite Bitcoin being a promising digital currency in the market. However, Musk just might be wrong about Bitcoin’s energy consumption pattern.
Is Musk wrong about Bitcoin’s energy consumption levels?
Following the many backlashes the Billionaire has been receiving from the Bitcoin community, Musk referenced the increase in Bitcoin’s electricity usage this year as revealed in a research published by Cambridge University.
Musk’s viewpoints imitate that of the U.S Treasury secretary Janet Yellen, who although noted the use of crypto-currencies, is convinced that Bitcoin consumes a staggering amount of energy, one that doesn’t position the asset as an efficient one in the future.
However, if we go by Jack Dorsey’s findings, Elon Musk just might have it all wrong about Bitcoin. According to the memo published by Jack Dorsey’s payment platform Square, Bitcoin opens doors to an abundance of clean energy in the future.
Excerpts of the memo explaining how Bitcoin mining is not damaging to the environment in the way that critics try to portray it reads:
“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. These combined qualities constitute an extraordinary asset.” This adds to claims that over 70% of Bitcoin mining is carried out using renewable energy.
Is the ESG the real reason behind Tesla’s new stance?
It is surprising to many that Musk is taking a different stance on Bitcoin, after previously tweeting “true” to Jack Dorsey saying “bitcoin incentivizes renewable energy” back in April. The guess from proponents is that a bigger factor is propelling the new development.
In line with this, a financial analyst at investment firm AJ Bell is insisting that Tesla’s decision to halt Bitcoin payment be the result of the company trying to stay in the good books of the Environmental, Social and Corporate Governance (ESG), an industry trend that focuses on technologies that generally pay off for the environment.
Laith Khalaf asserted this saying:
“Tesla’s decision certainly puts pressure on other big companies who accept Bitcoin to review their practices, because boardrooms will now be wary about getting it in the ear from ESG investors on the shareholder register.”