Twitter’s CEO, Jack Dorsey, and Tesla’s CEO, Elon Musk both support cryptocurrencies. They also believe that Bitcoin can help reduce greenhouse gas emissions and thus stop global warming. However, this view is doubted by many renewable energy experts.
In a white paper, Dorsey’s digital payment company Square and cryptocurrency investor Ark Invest jointly argued that Bitcoin miners are the “key” to increase global renewable energy production capacity. This will therefore enable solar and wind power generation to become more profitable.
Dorsey tweeted the paper titled “Bitcoin Incentives for the Development of Renewable Energy”. Well, another cryptocurrency enthusiast, Elon Musk gave a positive reaction. Ark Invest CEO, Cathie Wood, claims that the research “Debunk the myth that Bitcoin mining is destroying the environment.”
However, scholars and analysts who specialize in renewable energy have serious questions about these claims. They warn that these claims rely on dubious assumptions.
Renewable energy experts strongly opposes Dorsey and Musk
Lucas Davis, a senior professor of energy market research at Berkeley Haas School of Business, said: “This paper exaggerates the role of Bitcoin. I don’t believe Bitcoin is the best solution, nor do I believe that Bitcoin is the best solution. It’s a “critical technology”. California, Europe, and the world have been recording a substantial increase in renewable energy generation, but this is not from Bitcoin.”
Ravi Manghani, director of solar research at energy consulting firm Wood Mackenzie, said that the argument of the paper is a bit “exaggerated”. He says that Bitcoin is a technology that can help increase renewable energy generation. However, it is unlikely to play a major role alone.
Bitcoin critic, David Gerard, believes that this article is “helping Bitcoin laundering”. He claims that “the Bitcoin mining process is so terrible and the impact is bad…”
There is little evidence that crypto miners prefer to use renewable energy to generate electricity. A report this month by Wood Mackenzie, a world-renowned energy consulting firm, found that the United States has not successfully launched solar or wind energy projects through the Bitcoin mining agreement. However, there are predictions that this will happen in the future.
This disconnect has sparked a lot of ridicule on Dorsey on Twitter. Bitcoin critics likened his logic to “arson incentivize building houses”, “gunshots incentivize gunshot wound treatment”, and “fuel-guzzlers incentivize buying electric cars”.
Davis, a senior professor of energy markets at Berkeley Haas School of Business, said: “Bitcoin miners will go to any place in the world where they can buy the cheapest electricity, regardless of the environmental consequences of this electricity. “
Realistically, cryptocurrency is also far from the only way to reduce emissions. Other companies are experimenting with the use of surplus electricity to produce hydrogen fuel for trading.