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Tesla Ready to Accept Bitcoin Again as Clean BTC Mining Energy Breaches 50%

Published September 15, 2023 4:43 PM
James Morales
Published September 15, 2023 4:43 PM
Key Takeaways
  • Tesla stopped accepting Bitcoin payments in 2021, citing the mining operations’ high emissions.
  • At the time, Elon Musk said he would consider reinstating the option if clean energy accounted for half of Bitcoin mining.
  • With zero-emissions electricity increasingly available, some reports suggest the 50% threshold has been surpassed.

When Tesla suspended Bitcoin payments in 2021, citing environmental concerns, CEO Elon Musk said that when miners surpass 50% clean energy, he would reinstate the payment option.

Since peaking in mid-2021, Bitcoin emissions have declined by as much as 37.5%, and some analysts report that clean energy provides more than half of all the electricity used for Bitcoin mining globally. Could these developments see Tesla once more embrace BTC?

Analysts Spilt on Ratio of Clean Energy in Bitcoin Mining 

There are several sources of information on the prevalence of clean energy in Bitcoin mining, but they report significantly different results.

On the optimistic side, the Bitcoin Mining Council, whose members represent 43.4% of the global Bitcoin mining network, reported a figure of 59.9%  in August.

Meanwhile, in September 2022, researchers at the University of Cambridge’s Center for Alternative Finance (CCAF) concluded  that just 37.6% of the energy used by the Bitcoin blockchain comes from sustainable sources. 

Landing somewhere in the middle, a recent Batcoinz report  found that the Bitcoin network now uses a minimum of 52.6% zero-emission energy.

Bitcoin Greenhouse Gas Emissions No Longer Growing, But Are They Really Shrinking?

Recently, Bloomberg analyst Jamie Couts identified another way of framing the problem.

As he explained, if mining emissions are falling, yet the Bitcoin hash rate is increasing, the only conclusion is that Bitcoin mining is consuming more sustainable energy in its mix.

However, Couts based his analysis on Batcoinz data. The CCAF, on the other hand, observes that although the growth of greenhouse gas emissions created by Bitcoin may be slowing, it’s too early to say that they are declining.

BTC mining CO2 greenhouse gas emissions
  CCAF Bitcoin emissions data.

What Will it Take For Tesla to Accept Bitcoin Payments Again?

With so many conflicting opinions, Musk appears to have erected a difficult bar to meet for Tesla’s adoption of Bitcoin payments. 

What’s more, large Bitcoin mining operations are increasingly integrated into electricity grids in a way that “soaks up” additional energy during periods of low demand. 

In such instances, although the electricity itself may not have come from clean energy sources, if it would be wasted otherwise, does it really make sense to count it toward overall emissions?

So far, neither Tesla nor its CEO have commented on the claims of Batcoinz or the Bitcoin Mining Council, which have both reported that Bitcoin mining has passed the 50% clean energy threshold.

However, renewable energy investment is booming. 

The impact of billions of dollars of subsidies introduced by the US and the EU in recent years has yet to be felt on global energy markets. 

Nevertheless, the large-scale infrastructure projects currently in the pipeline promise to radically transform the ratio of clean versus fossil-fuel-generated electricity in the future. At some point, Musk may be forced to act on his previous commitment.

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