Elon Musk has announced that Tesla is suspending the option to pay for its electric vehicles in Bitcoin due to concerns about its energy usage. According to a statement, the company is looking into more environmentally friendly alternative cryptocurrencies, often called “altcoins.”
Tesla had added the option to use Bitcoin to buy its electric vehicles in late March. Since then, cryptocurrency insiders have urged the company to consider accepting other cryptocurrencies like Dogecoin, which Elon Musk has often plugged both on Twitter and during his recent guest hosting appearance on Saturday Night Live. Selling points for other cryptocurrencies often include lower transaction fees, faster transaction times, and lower energy usage involved in processing blocks of transactions, usually called “mining.”
Elon Musk has indicated that the company would be willing to consider cryptocurrencies that use less than one percent the energy that Bitcoin does. This might require a deep dive into comparisons of the energy usage of top “mineable” cryptocurrencies. According to one comparison study published in September 2020, DASH, ZCash, Ethereum Classic, Bitcoin Gold, Decred, MonaCoin, Bytom, SiaCoin, DigiByte, Horizen, Komodo, and Bytecoin may be suitable if one judges by the rated power commanded by their networks among the top 20 coins that use “Proof of Work” algorithms. Peercoin also didn’t miss a chance to plug its own use of the more environmentally friendly “Proof of Stake” algorithm:
Mining of Bitcoin itself consumes 150 megawatt-hours a year, according to a recent analysis published by the University of Cambridge. According to Cambridge, it currently accounts for 0.59% of the world’s energy demand. This may back up some Bitcoin critics’ claim that Bitcoin itself is inefficient and unsuitable for becoming essentially the world’s preferred currency.
Critics have also blasted the failure of Bitcoin (BTC) to scale adequately. This has often been blamed on long-standing statements by Blockstream and its allies that scaling can be moved off the “blockchain layer” and onto other layers such as the Lightning Network. However, the critics say that the Lightning Network is too buggy to be usable and may lose users’ funds.
Many longtime cryptocurrency backers have already jumped to alternatives that they say are more suitable for using as cash and closer to Satoshi Nakamoto’s original vision of a secure form of digital cash that anyone can use. Roger Ver, for instance, has jumped to Bitcoin Cash (BCH), a fork of Bitcoin that its backers say is working on increasing the block size. Others have moved over to DASH for its low transaction fees.
Tesla’s current concern about Bitcoin is that 85% of the world still relies on coal for power. Using coal to produce electricity is at the top of the list for having the worst carbon emissions of any fuel. While this has also been a common criticism of Tesla’s electric cars, the company has pushed for its Superchargers to be powered with renewable sources like solar power.
Some Bitcoin miners say that they are working on the energy problem and this is backed up by many major Bitcoin miners seeking out inexpensive hydroelectric power. Norway is popular for its production of inexpensive “green” energy, although recent reports say that this has put a strain on its ability to keep up with demand.
Elon Musk has said that Tesla would consider using Bitcoin for transactions once most cryptocurrency mining activities move over to renewable sources. Some cryptocurrency supporters are likely to push for Tesla to accept multiple cryptocurrencies, or at least consider their favorites as they push for their holdings to go “to the moon” like the first Dogecoin-funded satellite mission, DOGE-1, is slated to.