Tesla CEO Elon Musk recently reversed his stance on Bitcoin at the previous “The ₿ Word” event, saying that the all-electric carmaker may once again accept Bitcoin transactions as a payment method once the mining rate for the cryptocurrency reaches 50% renewables. “I wanted a little bit more due diligence to confirm that the percentage of renewable energy usage is most likely at or above 50% and that there is a trend towards increasing that number, and if so Tesla would resume accepting Bitcoin.” Just two months ago, Musk said on Twitter that Tesla would stop accepting Bitcoin for car purchases, citing environmental concerns.
Tesla’s change of heart surprises the market but also proves crypto mining’s green shift. According to the data report released by Bitcoin Mining Council (BMC) on July 1, its first voluntary survey has successfully collected information on renewable energy usage from 32 percent of the total hashrates of the Bitcoin network. The survey results show that 67% of the electricity resources currently used by BMC members and survey participants are renewable energy, and the renewable energy utilization rate of global digital mining can increase to about 56% by the second quarter of 2021.
Before this, due to the growing problem of global warming, there have been more and more discussions on carbon neutrality strategy around the world. One of the focuses is leveled at Bitcoin mining which has consumed huge electricity resources. Since its birth, the total carbon dioxide emissions generated by digital mining have reached 67.23 Mt, with a total power consumption of 141.54 TWh. Each year, electricity consumption in digital mining exceeds the annual power usage of Ukraine. Many Bitcoin mining companies have been suspended in China for carbon neutrality considerations.
At first, the idea that Bitcoin consumes too much energy did not capture popular opinion as many believed that that according to the value of Bitcoin itself, the energy consumption was within the acceptable range. However, Musk’s previous accusations of Bitcoin’s energy consumption issues and the impact of China’s “carbon neutrality” policy have triggered a new round of attention to renewable energy mining in the crypto industry. For some small and medium-sized miners, the shift from non-renewable to renewable energy mining means new costs, and the current volatility in the Bitcoin market further impeded changes in the existing mining methods, which are part of the reason why the advance of renewable energy mining has been slow so far.
However, with the rapid development of the encryption industry, the robust growth of the market volume, and the in-depth deployment of the “carbon neutrality” strategy, if the companies contest renewable energy mining, they will easily attract the attention of the local government as they develop, and will face rigid orders to comply with the carbon emission regulations. This is why some large-sized digital mining companies have turned to renewable energy for the sake of sustainable development and to avoid violations of environmental protection policies such as “carbon neutrality” in the future.
Last year, for example, the electronic payment company Square pledged $10 million to its newly-launched Bitcoin Clean Energy Initiative, which will support other mining companies in the ecosystem to adopt renewable energy in Bitcoin mining. And in March 2021, the well-known crypto mining company Blockchain announced the launch of Terra Pool, a mining pool powered by renewable energy, whereas Neptune Digital Assets and Link Global jointly signed a letter of intent on a solar, wind, and gas-powered mining facility in Canada. Many other crypto mining companies in North America are also working on new standards for energy mix reporting to take active actions.
The adoption of renewable energy in Bitcoin mining may cause a temporal increase in costs but will better ensure sustainable development as it integrates development and environment protection. Now that the transformation to renewable energy mining has begun, the proportion of non-renewable energy mining in the ecosystem will gradually dwindle, and non-renewable energy mining will eventually step down from the stage of history. At that time, it will be difficult for Elon Musk to criticize Bitcoin again on the excuse of energy conservation.