Tuesday, 15 Jun 2021

Elon Musk lashes bitcoin’s ‘great cost to the environment’, sending prices falling

Billionaire Elon Musk has stepped up his attack on bitcoin, posting a string of critical tweets yesterday which sent prices crashing.

Taking to Twitter, the 49-year-old Tesla CEO shared a graph which showed bitcoin’s electricity usage had soared during 2021.

“Energy usage trend over past few months is insane,” he posted.

In a previous tweet, he had revealed Tesla had suspended vehicles purchased using bitcoin.

“We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” the statement reads.

“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.

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

“We are also looking at other cryptocurrencies that use less than one per cent of bitcoin’s energy/transaction.”

Musk’s stinging criticism stunned investors, given his vocal support of cryptocurrency, and his comments sent prices plunging, dropping 15 per cent at one point to les than $69,600.

Other cryptos, including ether and dogecoin, also fell and hundreds of billions of dollars was wiped from the total cryptocurrency market.

This morning, Musk again turned to Twitter to discuss crypto, tweeting that “It is high time there was a carbon tax!”

However, he then explained: “To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal.”

Bitcoin mining uses vast amounts of energy to power specialised computers solving complex but useless mathematical problems.

And according to a Citigroup report released last month, bitcoin mining is “consuming 66 times more electricity than it did back in late 2015, and the carbon emissions associated with it will likely face increasing scrutiny”.

“As of mid-April, global power demand by the bitcoin network probably reached an annualised 143 terawatt-hours, about 4 per cent higher than Argentina’s total electricity generation in 2019”, the report said.

Musk’s statement is especially shocking, given it comes just a few months after the world’s richest man announced that Tesla would invest $1.95 billion in the cryptocurrency as well as accept it as payment for cars and other products.

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