This week Elon Musk announced that Tesla would not, in fact, be accepting Bitcoin as payment for Tesla cars, citing concerns over how much energy Bitcoin mining uses. For those keeping score this announcement comes only 3 months after Musk announced that Tesla would accept Bitcoin.
According to estimates from Cambridge University, Bitcoin does indeed use an enormous amount of energy — about 150TwH annually according to their estimate. Were Bitcoin a country it would rank 25th in energy consumption, ahead of Egypt, Sweden and Pakistan to name but a few countries.
Why is Bitcoin so energy intensive?
For those unfamiliar with the process, in order to get new Bitcoin, computers are tasked with authenticating Bitcoin transactions, and their reward for doing so is the possibility of receiving some Bitcoin themselves. The way these transactions are authenticated is essentially by solving lots and lots of mathematical puzzles — with entire warehouses of electricity-hungry computers being tasked to solve them.
Musk's concerns about Bitcoin have merit. The strange thing is that his concerns were arguably similarly valid back in February. What changed, Elon?
