Djoann Fal

May 16, 2021

8 min read

🍂 The Week Bitcoin farted. 🗯 Data from the CIA about the🔌 sustainability of Bitcoin & more.

Last week, what was the common point between Tesla, Vitalik, India, COVID, and ESG? Bitcoin!

Quick Snapshot

Wednesday, Vitalik donated cryptocurrency worth $1 billion to support covid-19 relief work in India, possibly the single-largest philanthropic contribution to help covid-stricken Indians from any country or individual in history.

On the other end, bad news for all crypto holders: while the recent fall has dented Musk’s fortune, bitcoin also poses a threat to the company’s mission toward a “zero-emission future” and poses serious questions for governments and corporations looking to curb their own carbon footprints.

Bitcoin mining — the process in which a bitcoin is awarded to a computer that solves a complex series of algorithms — is a deeply energy-intensive process.

“Mining” bitcoin involves solving complex math problems in order to create new bitcoins. Miners are rewarded in bitcoin.

Earlier in bitcoin’s relatively short history — the currency was created in 2009 — one could mine bitcoin on an average computer. But the way bitcoin mining has been set up by its creator (or creators — no one really knows for sure who created it) is that there is a finite number of bitcoins that can be mined: 21m. The more bitcoin that is mined, the harder the algorithms that must be solved to get a bitcoin become.

Now that over 18.5m bitcoin has been mined, the average computer can no longer mine bitcoins. Instead, mining now requires special computer equipment that can handle the intense processing power needed to get bitcoin today. And, of course, these special computers need a lot of electricity to run.

The week Bitcoin farted

Prompting speculation among some experts about whether he had a plan to wean the crypto industry off the fossil fuels that power “mining,” the energy-intensive process that creates coins.

Tesla could itself take an active role in helping make bitcoin greener by investing in new projects aimed at boosting the use of renewable energy in mining, according to more than a dozen cryptocurrency specialists interviewed by Reuters.

“Musk and Tesla certainly have the resources to support existing efforts to fully move bitcoin to renewable energy,” said Diana Biggs, CEO of crypto startup Valour.

But such ventures could take years to get off the ground.

Another potential route is for Tesla to shift from bitcoin to more eco-friendly digital currencies that don’t rely on mega-computers spawning new tokens, according to the experts.

As of April 2020, 75% of the mining of bitcoin is concentrated in China, whose economy is still heavily reliant on coal. The mining pool statistics are obtained from

Bitcoin’s price has risen almost 70% so far this year. As it goes up in price, the revenue to miners also increases, incentivizing more participants to mine the cryptocurrency.

Last month, a coal mine in the Xinjiang region flooded and shut down. This took nearly a quarter of bitcoin’s hash rate — or computing power — offline, according to crypto industry publication CoinDesk.

According to one source, a single bitcoin transaction uses the same amount of power that the average American household consumes in a month.

In March, China’s Inner Mongolia region said it would shut down cryptocurrency mining operations in the region due to concerns over energy consumption.


Yet environmentalists have criticized bitcoin’s energy consumption and its reliance on fossil fuels for years, not months.

The bitcoin network is responsible for 55 million metric tons of CO2 annually. Bitcoin mining uses about the same amount of energy annually as Sweden, or Malaysia, or Egypt, data from the University of Cambridge shows. read more

Annual energy consumption and ranking by countries a are obtained from (, carbon emission and ranking by countries b are collected from global carbonatlas (

Much of it is powered by coal, the dirtiest of all fossil fuels. Chinese miners accounted for about 70% of production, data from the university shows. Many use fossil fuels, switching to renewables like hydropower during the rainy summer months.

In theory, blockchain experts have said, it would be possible to track which bitcoins have been produced sustainably, also giving Tesla an option to only accept greener bitcoins.

Last month, Jack Dorsey’s fintech company, Square, and Cathie Wood’s Ark Invest put out a memo claiming that bitcoin will actually drive renewable energy innovation. However, critics said they had a vested interest in doing so.

Alexander said the debate around bitcoin’s environmental impact was misguided as most transactions with the digital asset aren’t happening on the blockchain.

“Almost all the trading is not done on the blockchain,” she said. “It’s done on secondary markets, centralized exchanges. They’re not even recorded on the blockchain.”

Cryptocurrencies that consume less energy, such as the seventh-largest coin XRP, may present other concerns, experts said.

Investors have worried about XRP since U.S. regulators charged blockchain firm Ripple, a major backer of the cryptocurrency, with a $1.3 billion unregistered securities offering last year. Ripple has denied the charges.

Some have also suggested changing bitcoin’s protocol itself, to lower its power consumption. Yet getting all users in bitcoin’s decentralized network of miners, run by no oversight body, to agree would be challenging, experts warned.

“The whole bitcoin mining ecosystem has invested billions of dollars in hardware,” said Jack Liao, CEO of Chinese mining firm LightningAsic. “How can they change the protocol? Change means a loss of billions.”

Here is a list of Bitcoin alternatives if you are curious, I don’t know what to think of it personally so I let you have a look.


ESG, or environmental, social, and corporate governance, has become a growing trend in financial markets, with portfolio managers increasingly incorporating sustainable investments into their strategies.

Some Tesla shareholders may be worried that the company is betting big on bitcoin while also claiming to be a green energy company.

“Bitcoin backers will be wondering where this leaves the future of the cryptocurrency,” Laith Khalaf, a financial analyst at investment firm AJ Bell, said in a note Thursday.

“Environmental matters are an incredibly sensitive subject right now, and Tesla’s move might serve as a wake-up call to businesses and consumers using Bitcoin, who hadn’t hitherto considered its carbon footprint,” Khalaf added.

Bonus: 3 Myths about Bitcoin mining for your dinner conversation tonight.

“Even if, hypothetically speaking, this whole network was running on renewable energy. Still, it doesn’t solve the sustainability issues of bitcoin. Bitcoin uses excessive amounts of hardware. You have a bunch of specialized equipment that can only do bitcoin mining. The moment they become unprofitable, there’s nothing you can do with them. You can’t repurpose them, you can’t use them as a home computer. It’s trash. And they don’t last very long, on average maybe one and a half years. So you’ve got millions of devices that are becoming obsolete extremely fast. That just results in a big pile of electronic waste down the line. It’s already the case that a single bitcoin transaction is equivalent to throwing away an iPhone 12 mini in terms of materials, that’s already how bad it is.” Alex de Vries, a digital currency economist who has consistently called out bitcoin’s growing greenhouse gas emissions. He runs the blog Digiconomist, which keeps a running tab on bitcoin’s estimated energy use and emissions.

Myth one: bitcoin mining is becoming more efficient

Bitcoin’s carbon emissions are not the network’s only dirty secret. In 2011, competing miners could win the bitcoin bingo with an average laptop. Today, viable operations require investing in warehouses filled with specialized hardware known as Application Specific Integrated Circuits (ASIC). As the majority of mining costs come from energy to run these units, bitcoin miners are always careful to use the cheapest. To avoid wasting energy, the global arms race for bitcoin requires ASICs to be replaced with newer and more efficient models every year.

ASICs can’t be easily repurposed for general computing. Redundant units create around 11,500 tonnes of hazardous electronic waste each year, much of which is dumped on cities in the global south.

Myth two: bitcoin encourages investment in clean energy

Chinese hydroelectric power plants are popular spots for bitcoin mining. While China cracks down on the industry, 61% of bitcoin mining is powered by fossil fuels.

Cheap coal in Australia has found new buyers through bitcoin, as formerly redundant coal mines are reopened to power mining. Miners are willing to move anywhere for residual energy, increasing the profitability of natural gas in Siberia and supporting oil drilling in Texas.

Myth three: bitcoin replaces the need for gold mining

Gold mining is one of the world’s most destructive industries. Bitcoin was originally intended as a digital replacement for gold that was also a deflationary means of exchange, capable of rendering wasteful banks and regulators redundant.

But for many institutional investors, gold is being bought to hedge against bitcoin’s volatility. Tesla poured US$1.5 billion into bitcoin, but also declared an interest in gold. While bitcoin is currently experiencing all-time price highs, gold hit one of its own in 2020.

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