Audits Could Rectify Crypto Energy Debate, Says Musk

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In Brief
  • Elon Musk said energy audits of large bitcoin miners could help solve the debate around cryptocurrency’s environmental impact.

  • The message was in reply to a ARK Invest analysts saying how bitcoin mining could enable battery power to scale.

  • In partnership with Square, ARK Invest published a whitepaper last month claiming bitcoin could incentivize renewable energy.

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Tesla CEO Elon Musk has said energy audits of large bitcoin (BTC) miners could help solve the debate around cryptocurrency’s environmental impact.

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The comment came as a caveat to Musk’s reply to a post by ARK Invest analysts. ARK Invest director of research Brett Winton shared an update of research he conducted with colleagues of his. 

The research concerned a model ARK Invest analysts created. It showed how bitcoin would have performed under different market conditions, if renewable energy had powered its mining. According to Winton, “bitcoin minting could allow solar and battery systems to economically scale to provide a larger share of grid energy across different historical bitcoin pricing/hash timeframes.”

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Musk largely agreed with the argument, saying that it could be done over time. However, he added that bitcoin’s recent growth in energy usage could not have been done as fast with renewable energy. Ultimately, he concluded, the question could be resolved “if the top ten hashing orgs just post audited numbers of renewable energy.”

Considering Musk’s penchant for dogecoin (DOGE), other Twitter users were curious about his perspective regarding the altcoin’s energy usage. In a separate thread citing dogecoin, one user asked Musk’s opinion about a coin’s ideal energy usage. “Ideally 0.1 kWh, calculated as total energy used by system divided by max transaction rate,” Musk replied.

ARK’s sustainability whitepaper

According to a contributor of ARK’s bitcoin model, a key takeaway from the research is that bitcoin mining could incentivize additional solar and battery installations. ARK Invest previously promoted this idea in a whitepaper it published in partnership with Square Inc.

The study purports that cryptocurrency mining could drive investment in renewable energy, while making more energy available to the grid. “A world with bitcoin is a world that, at equilibrium, generates more electricity from renewable carbon-free sources,” the study says.

Notably, Musk seemed to support idea himself. When Square CEO Jack Dorsey tweeted this notion in sharing the whitepaper, Musk simply replied “True.”

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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