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Is it true that Musk said that Bitcoin wastes resources and pollutes the environment?



Bitcoin "supporter" and Tesla founder Elon Musk tweeted in the early morning, saying that Bitcoin consumes too much energy, uses too much non-renewable energy and causes adverse environmental impacts, so Tesla stops Bitcoin as a means of payment. Bitcoin fell by 15% in response, and the entire network liquidated more than 2 billion US dollars. The leeks who woke up were confused, what happened that night? After recovering, the community launched a siege against Musk. Why is the energy consumption of Bitcoin brought up again? Musk immediately cites CCFA data to back it up. But in fact, people have too many misunderstandings about Bitcoin's energy consumption. Image source: CCFA Nic Carter, as a top VC and researcher in the encryption circle, has recently devoted a lot of time and energy to educate users inside and outside the circle on the issue of Bitcoin energy consumption. This "How Much Energy Does Bitcoin Actually Consume?" analysis is very thorough. Rhythm BlockBeats translated the full text for everyone: How much energy should an industry consume? Organizations around the world are currently facing restrictions on non-renewable energy consumption as well as carbon emissions caps. But it is very difficult to determine how much consumption is too much, which is closely related to the order of society's priorities for different things. After all, which goods and services are "worth" how much resources to spend is a question of value. With the growing importance of cryptocurrencies, especially Bitcoin, the discussion of energy use has become a question of who actually benefits from it. Musk: Twitter added 1.6 million daily active-zce users last week, a record high: Golden Finance reported that Tesla CEO Elon Musk, who has acquired Twitter, said that Twitter added 1.6 million daily active-zce users last week, a record high. [2022/11/22 7:55:17] On the face of it, energy use is a fair question. According to the Cambridge Center for Alternative Finance (CCAF), Bitcoin currently consumes about 110 terawatt-hours of electricity per year, accounting for 0.55% of global electricity generation and roughly equal to the annual energy consumption of small countries like Malaysia or Sweden. Of course, that does sound like a lot to consume. But how much energy is reasonable for a monetary system? Your answer may depend more on how you feel about Bitcoin. If you think that Bitcoin is merely a tool for Ponzi schemes or money laundering, then any energy consumed by Bitcoin is wasted. But if you are one of the tens of millions of people in the world who use Bitcoin as a tool to circumvent monetary repression, inflation or capital controls, then you will probably think that the energy consumed is well worth it. The total amount of social resources you think Bitcoin should consume depends entirely on how much value you think Bitcoin can create for society. To continue this debate, we should at least be clear about how Bitcoin actually consumes energy. Understanding bitcoin's energy consumption may not answer the question of bitcoin's usefulness, but it can help people understand what impact bitcoin has on the environment. Specifically, we need to clear up some serious misconceptions. Musk may face a lawsuit similar to Ripple’s for Dogecoin: On May 28th, Crypto-Law founder John Deaton tweeted to warn Musk that if he frequently tweets and promotes Dogecoin, it may bring him peace. Similar legal troubles for Ripple. John Deaton responded to a tweet from Twitter user @JayBlessed901. @JayBlessed901 said that it is unfair to SEC Chairman Gary Gensler's long-term lawsuit against Ripple. Ripple has more than 300 large financial companies among its customers outside the United States. Musk, on the other hand, can tweet to push the price of DOGE up. In this regard, John Deaton said that the SEC is likely to sue Musk for this. Gary Gensler and the SEC may decide that Musk and his company are investing in Dogecoin. (U.Today) [2022/5/29 3:47:51] First of all, there is a big difference between the energy consumed by a system and its carbon emissions. While pretty straightforward from an energy consumption standpoint, you don't know the different carbon footprints of different combinations of energy consumption, specifically, the mix of energy used by bitcoin mining computers. For example, each unit of hydropower energy has a much lower environmental impact than the same unit of coal energy. Estimating Bitcoin's energy consumption is actually not that hard: you can look at its hash rate (the total computing power used to mine Bitcoins and process transactions) and then make an educated guess about the energy requirements of the hardware used by miners. But its carbon emissions are hard to estimate. Mining is a highly competitive industry, and miners do not pay much attention to operational details. CCAF gives the best estimate of the geographical location of energy production (from which energy distribution can be inferred), and CCAF works with major mining pools to aggregate anonymized data on miner locations. Musk asked Changpeng Zhao: Dogecoin holders using Binance should be protected: On November 23, CoinDesk tweeted a related article "Binance seeks investment from global sovereign wealth funds". Musk commented on the tweet and said: @赵长鹏(CZ) said, “Hey, what’s the matter with your Doge customer? Sounds suspicious. Dogecoin holders using Binance should be protected from mistakes that are not their fault.” Previous news, Binance said that after the version update on November 10, it found a small problem with the DOGE coin withdrawal on Binance, and temporarily suspended the DOGE coin withdrawal. [2021/11/23 7:06:33] Based on these data, CCAF forecasts the energy used by miners by country (or province). But their data set does not include all mining pools, nor is it up to date, leaving us still largely unclear about Bitcoin's actual power consumption structure. In addition, many analysis reports summarize the energy structure at the national level, resulting in inaccurate descriptions of countries with extremely diverse energy structures such as China. As a result, estimates of the percentage of bitcoin mining using renewable energy vary widely. In December 2019, a report indicated that 73% of Bitcoin mining energy consumption is carbon-neutral, mainly due to the use of hydropower for mining in places such as Southwest China and Scandinavia. However, CCAF estimated in September 2020 that this figure dropped to 39%. However, while that figure has declined, it is still twice the size of the U.S. grid, showing that considering energy consumption alone is not a reliable way to determine Bitcoin’s carbon footprint. Musk: Now is not the time to pick technical winners or losers in cryptocurrency technology, and no crisis forces hasty legislation: Coinbase CEO Brian Armstrong said that there are several key moments that determine the future of encryption. One is the Senate's infrastructure bill, which Mark Warner and others subsequently proposed amendments to determine which underlying technologies can or cannot be used in encryption. In response, Musk replied agreeing that now is not the time to pick technical winners or losers in cryptocurrency technology, and there is no crisis that forces hasty legislation. Earlier news, the bipartisan infrastructure bill in the United States plans to raise about $28 billion through cryptocurrency taxes by applying new information reporting requirements on exchanges and other parties. The cryptoasset amendment to the bipartisan infrastructure bill in the U.S. Senate would raise about $23 billion through taxes. (Coindesk) [2021/8/7 1:40:20] Another key factor that makes Bitcoin’s energy consumption different from most other industries is that Bitcoin mining can be done anywhere. Almost all production energy use globally must consider distance from its end users, but Bitcoin has no such constraints, allowing miners to use energy that is unavailable to most other industries. Hydropower is the most typical example. During the rainy season in Sichuan and Yunnan, a large amount of renewable water energy is wasted every year. In these areas, productivity greatly exceeds local demand, and inadequate battery technology makes it not worth storing and transporting this energy to cities. These regions are likely the largest energy islands on earth, so it is no coincidence that these provinces are the heartland of China's mining industry, accounting for nearly 10% of global Bitcoin mining during the dry season and 10% during the wet season. 50% of the world's Bitcoin mining volume. Attorney John Deaton: Elon Musk has the best advertising campaign for XRP: Regardless of what Elon Musk thinks, he has the best advertising campaign for XRP, says attorney John Deaton, who is representing Ripple and its executives in the lawsuit publicity. He believes more mainstream coverage will now be devoted to sustainable cryptocurrencies. Ripple CEO Brad Garlinghouse and other executives have been vocal about Ripple's green credentials. In a recent interview, Garlinghouse claimed that XRP is 10,000 times more energy efficient than Bitcoin. Ripple co-founder Chris Larsen also suggested that Bitcoin should abandon the PoW consensus mechanism in order to maintain its dominant position. (U.Today) [2021/5/13 21:57:41] Another carbon-neutral mining solution is flare gas. Today, the oil extraction process releases large amounts of natural gas as a by-product, and this energy pollutes the environment instead of being used on the grid. Due to the remote location of oil wells, most traditional industries have historically been unable to efficiently utilize this energy source. But bitcoin miners from North Dakota to Siberia are already taking advantage of wasted resources, and some companies are even exploring more controlled ways to burn natural gas to further reduce emissions. Of course, in today's Bitcoin mining field, this is still not the most critical, but according to calculations, it is concluded that there is enough natural gas in the United States and Canada alone to maintain the operation of the entire Bitcoin network. To be fair, bitcoin mining using excess natural gas does still generate emissions, and some have argued that the practice even subsidizes the fossil fuel industry, incentivizing energy companies to invest more in oil extraction. But bitcoin miners’ earnings are a drop in the bucket compared with other industries that rely on fossil fuels, and the demand for fuel in those industries is unlikely to disappear anytime soon. Given that oil will continue to be extracted for the foreseeable short term, expanded use of natural gas by-products will have positive effects (and may even reduce environmental impact). Interestingly, the aluminum smelting industry is surprisingly similar to bitcoin mining. The process of converting natural bauxite into usable aluminum is energy-intensive and often inexpensive to transport, so many energy-surplus countries have built smelters to tap their excess resources. Regions where production capacity exceeds local consumption capacity, such as Iceland, Sichuan and Yunnan, have become net exporters of energy through aluminum. Today, the inherent advantages of these regions make these regions the first choice for Bitcoin mining. There are even many former aluminum smelters that have started bitcoin mining. Energy generation is only a small part of the equation. But another area where misconceptions are common is how bitcoin consumes energy and how it changes over time. Many journalists and academics talk about how high Bitcoin's "energy cost per transaction" is, but in fact this metric is misleading. The vast majority of Bitcoin's energy consumption occurs during mining. Once bitcoins are minted, very little energy is required to verify transactions. Therefore, it is unreasonable to just look at the total energy consumption of Bitcoin to date and divide it by the number of transactions. Most of the energy is used to mint Bitcoins, not to transfer transactions. This leads us to our final serious misunderstanding: the energy costs associated with Bitcoin mining will continue to increase exponentially. Because of how quickly Bitcoin's energy consumption is growing, it is sometimes thought that Bitcoin will eventually dominate the entire energy network. Recently, a research report cited by The New York Times reported shocking results that Bitcoin could warm the planet by 2 degrees Celsius. Yet we have every reason to believe this will not happen. First, as in many other industries, Bitcoin's energy-intensive structure relies less and less on carbon each year. In the U.S., a growing number of listed, ESG-focused miners have captured a significant market share, while China has also recently banned coal-fired mining in Inner Mongolia, one of the largest coal-fired mining regions in existence. At the same time, many organizations in the mining industry have also launched a "Crypto Climate Agreement" similar to the "Paris Climate Agreement" to advocate and work to reduce Bitcoin's carbon footprint. Of course, with the improvement of the efficiency of renewable energy such as solar energy, there will be more outlets for mining, and Bitcoin mining may eventually become an important driving force for the construction of these emerging technologies. Furthermore, it is unlikely that miners will continue to expand their operations at the current rate indefinitely. The Bitcoin protocol provides subsidies for mining, but these subsidies have built-in checks for their growth. Today, miners receive a small transaction fee (approximately 10% of a miner's income) for validating transactions when they mine, as well as the mined bitcoins as a profit. However, the protocol is set to halve miners' income from newly minted bitcoin every four years, so unless the price of bitcoin permanently doubles every four years (which economics says is basically bad for any currency) possible), otherwise the miner's minting share income will eventually decay to zero. In terms of transaction fees, Bitcoin has a natural limit to the number of transactions it can handle (less than one million transactions per day) coupled with users' limited ability to pay fees, which ultimately limits its growth as a source of income for miners potential. We can expect some miners to continue operating solely on transaction fees, but in reality, if profit margins decline, the economic incentive to invest in mining will naturally decrease. Of course, there are countless factors that can affect the environmental impact of Bitcoin, but the essence of all these factors is a question that is difficult to quantify in numbers: Is Bitcoin worth it? On top of that, many environmental concerns have been overblown, as well as misunderstandings and false assumptions about how the Bitcoin protocol works. This means that when we ask whether Bitcoin is worthy of its environmental impact, the actual negative impact may be much less than you think. However, it is undeniable that Bitcoin (like other products that add value to society) does consume social resources. Like every other energy-consuming industry, the crypto community must acknowledge and address these environmental concerns, work to reduce Bitcoin's carbon footprint, and ultimately demonstrate that Bitcoin provides far more social value than the social resources it requires.


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