Tesla boss Elon Musk’s claim to be working tirelessly towards a zero emissions future took a knock when his electric car company opted to spend $1.5 billion in order to buy bitcoins. Because private investors in the cryptocurrency are financing climate change, every bit as much as if they were purchasing shares in the most Neanderthal oil companies.
Environmental damage rises in lockstep with bitcoin prices, and these have practically doubled this year. The higher the price, the more demand for mining to release new coins into circulation. The more coins are mined, the more complex the proof-of-work algorithm, the more processing power required.
Bitcoin miners often opt to move closer to places with cheap electricity. In China, home of more such mining than any other country, this can mean coal-heavy regions. Bitcoin consumes 111.67 terawatt hours of electricity each year, creating 53.32 metric tonnes of carbon dioxide – the same as the whole of Austria.
Bitcoin is a collective and interdependent effort. So, each investor is responsible for a carbon output proportionate to their outlay. Thus, when you ‘invest’ just $10,000, you become liable for the same percentage of Bitcoin’s annual carbon emissions, equivalent to 505kg of CO2 per year. That is 10% of the average American’s annual emissions.
So, that single $1.5 billion purchase by Musk is the equivalent of adding 15,000 brand-new substantial American polluters into the mix. Definitely an added fuel for Tesla’s many detractors.