The Narrative Around Bitcoin’s Hefty Carbon Footprint Is Headed Toward a Seminal Shift as Block, Tesla, and Blockstream Collaborate on a Green Mining Initiative
Bitcoin (BTC), the world's largest cryptocurrency by market capitalization, might just be able to flip the narrative around its carbon footprint should the latest collaboration between Block (NYSE:SQ), Tesla (NASDAQ:TSLA), and Blockstream bear fruit.
Readers would remember that the world's premier cryptocurrency was hammered last year when Elon Musk terminated Tesla's acceptance of the cryptocurrency, citing Bitcoin's soaring carbon footprint.
To put Bitcoin's energy use into perspective, let's take a look at a recent report by Crypto Carbon Ratings Institute (CCRI). A typical US household consumes 10,600 kWh of electricity per year. Bitcoin, with its vast network of decentralized nodes, consumes an average of 89.78 billion kWh of electricity per year, often exceeding the yearly energy output of some middle-income nations.
However, the wider crypto world has continued to push against this simplistic narrative, citing the fact that a significant proportion of Bitcoin's mining activity utilizes renewable energy, which means that the network's energy consumption is not equal to its carbon footprint. In fact, in September 2020, the University of Cambridge estimated that around 39 percent of Bitcoin's total energy consumption was carbon neutral, with this figure likely to skew to the upside since then in light of the laser-like focus on this issue. Moreover, proponents also argue that the global banking and finance industry uses energy that is orders of magnitude higher.
Block, Tesla, and Blockstream are now Slated to Spearhead a Carbon-neutral Bitcoin Mining Project
This brings us to the crux of the matter. As per the comments by Blockstream CEO Adam Back at the Bitcoin 2022 conference in Miami, Block, Tesla, and Blockstream are now slated to collaborate on a carbon-neutral Bitcoin mining project. The project is expected to go live later this year in Texas and will utilize the solar panels and the attendant energy storage technology sourced from Tesla.
Neil Jorgensen, the global ESG lead at Block (SQ) and project lead for Block's Bitcoin Clean Energy Initiative, noted:
"By collaborating on this full-stack, 100% solar-powered bitcoin mining project with Blockstream, using solar and storage technology from Tesla (TSLA), we aim to further accelerate bitcoin's synergy with renewables."
Of course, this is a significant development. It would demonstrably establish the financial viability of mining Bitcoin using green technologies. Moreover, should the pilot project prove to be successful, it would pave the way for a much more active role of Tesla and Elon Musk in Bitcoin's future trajectory. After all, Musk has already demonstrated his hold over cryptocurrencies such as Dogecoin by precipitating outsized gains and losses via a well-timed tweet.
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