Elon Musk wakes up to bitcoin’s fossil fuel issues

Elon Musk wakes up to bitcoin’s fossil fuel issues

Elon Musk, founder of Tesla, recently christened himself “technoking”, or king of tech. A better moniker might be “Wizard of Oz”.

The entrepreneur possesses a startling ability to tug the strings of the crypto world. In February, bitcoin prices leapt when Musk revealed that the company hadbought $1.5bnworth of the cryptocurrency. So did the price of dogecoin following similar Delphic tweets.

But last weekend dogecoin tumbled when Musk admitted on an American comedy show that the asset might be a “hustle”. And now bitcoin has tumbled too after yet another tweet, this time one revealing that Tesla will no longer accept bitcoin for purchases of electric cars. “We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal,” Musk said. 

Activists and journalists have, of course, been highlighting this issue for months. Two striking statistics encapsulate the problem.

First, it seems that two-thirds of bitcoin to date has been mined — created through computing algorithms — in China, using data centresreliant on electricity generated by coal. Indeed, bitcoin’s link with the black stuff is so tight that Alex Lipton, a crypto expert, notes that bitcoin prices move whenever accidents occur in Chinese coal mines.

Second, the $2tn crypto market