Written by Erik Weijers 4 months ago

Bitcoin Magazine in open letter: Elon, reconsider Bitcoin

In an open letter, three editors of Bitcoin Magazine ask Elon Musk to reconsider his position on Bitcoin and the environment. The crux of their argument: the effect of Bitcoin mining on the energy market is that it will increase the production capacity of renewable energy. This is entirely aligned with Tesla's mission.

The writers of the open letter said they were disappointed when Tesla announced in May 2021 that it would no longer accept Bitcoin as a means of payment - just a few months after starting to accept it. Both Tesla's acceptance and subsequent refusal were significant symbolic gestures, which had a significant effect on the price of Bitcoin. Elon Musk stated at the time, "Tesla's mission is accelerating the interest of sustainable energy. We can't be the company that does that and also not do appropriate diligence on the energy usage of Bitcoin."

But according to the writers of the open letter, Bitcoin mining is an incentive for sustainable energy: it makes the production of renewable energy profitable under varying conditions. Indeed, the problem with renewable energy production is that peak production is often much higher than demand. By integrating Bitcoin mining into the production facility, a renewable project can be profitable even when there is low demand for energy. This makes it more interesting for investors to finance renewable projects.

Percentage sustainable

Musk Tweeted in May 2021 that he would like to see at least 50% of Bitcoin mining done sustainably and that the trend should move in the right direction. The authors of the letter claim that currently 56% of the energy from Bitcoin mining is generated sustainably. Moreover, Bitcoin miners are increasingly leaning toward renewable energy. Not because they are such decent fellas, but simply because sustainability is usually the cheapest source of energy.

By the way, compare the mentioned 56% with the 20% renewable energy that comes out of the wall socket of the average American household. So that's the energy mix that Tesla's run on.

Comparing apples with apples

A final point from the writers is that too few fundamental questions have been asked and answered about the comparison between normal money (fiat) and Bitcoin. Too often a crude and contextless comparison is made: 'Bitcoin uses as much energy as country X'. Whereas the comparison should be between different money systems. The traditional money system also has a carbon footprint. Map that out and compare it to Bitcoin.

The letter writers suggest that such a comparative study should be conducted by neutral and esteemed researchers, acceptable to people from the pro and anti Bitcoin camp.

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