Elon Musk in May 2021 created a cataclysm by announcing on Twitter that Tesla would no longer accept bitcoin payments for the purchase of its cars.
The murderous tweet came just over three months after the electric vehicle maker announced it would accept bitcoin and invest in bitcoin.
“Tesla has suspended purchases of vehicles using Bitcoin,” the billionaire said on May 12, 2021. We are concerned about the rapid increase in the use of fossil fuels for Bitcoin mining and transactions, especially coal , which has the worst emissions of all fuels.
“Cryptocurrency is a good idea on many levels and we believe it has a bright future, but it can’t cost the environment dearly (…) We are also looking at other cryptocurrencies that use
A big change
That day, bitcoin prices crashed by more than 20%.
But most concerning in the crypto sphere was that Musk’s message would shine a light on the environmental impact of cryptocurrencies. From that moment, the media began to investigate the energy consumption of the transaction block validation process on the Bitcoin blockchain and other blockchains. The process is called proof of work.
Researchers have found that most blockchains consume significantly more power than many countries. The timing was bad because it was all happening at a time when the young industry was trying to attract beyond its aficionados.
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All of this is not good for crypto which presents itself as a breakthrough technology of the future. How to belong to the future when we participate in polluting the planet? This is a question that has been haunting the crypto space for several months now.
One of the consequences is that some institutional investors have preferred to stay away for fear of being accused of violating ESG – environment, social and corporate governance – the fashionable acronym in business circles. .
The wait will soon be over as Ethereum, the #2 blockchain behind Bitcoin, has just successfully completed a software update that is expected to reduce its power consumption by 99.95%. This feat was achieved by changing the way things are done. Basically, transactions will now be validated by a new mechanism, proof-of-stake, which does not require the use of several computers at the same time as with proof-of-work.
It’s not as technical as it sounds. What crypto fans want to tell us is that we can now invest in ether, the native token of Ethereum, buy and create the famous non-fungible tokens (NFT) or acquire a loan via a firm of crypto in good conscience since the platform’s CO2 emissions have been greatly reduced.
Ethereum makes it possible to reconcile defense of climate change and crypto. Investing in projects carried out on Ethereum is being a friend of the planet. Basically, a crypto investor is also socially conscious. There is no doubt that hesitant and cautious institutional investors now have a good excuse to get into crypto. It’s chic and responsible in a restaurant in town to say that they are investing in an innovative, hype and eco-friendly asset.
If all this serves to do us any good, the problem is that Bitcoin, Ethereum’s rival, will continue to operate as if nothing had happened. It is therefore difficult to really believe that the crypto sphere will suddenly become eco-responsible when bitcoin (BTC), which represents 37.4% of the crypto market, according to the data firm CoinGeckocontinues to consume a lot of energy.