Bitcoin will use more renewable energy, but will Tesla adopt it again?

It's been four years since Tesla stopped accepting Bitcoin citing environmental concerns. While the Bitcoin mining industry has reportedly increased its share of renewable energy consumption, Tesla doesn't seem ready to return to Bitcoin payments anytime soon.

In the year

Tesla CEO Elon Musk has decided to include the cryptocurrency in the company's treasury and started accepting BTC as a form of payment for the company's electric vehicles.

In May. In the year 13, 2021, esla stopped accepting Bitcoin as a payment method due to concerns over the rapid increase in Bitcoin mining and transactions from fossil fuels, especially coal.

While Tesla has stopped accepting BTC, it says it will accept Bitcoin as its encryption becomes more sustainable.

June 13, 2021 Musk says he will allow BTC transactions if Tesla can be sure that at least 50% of the energy used by miners is clean and sustainable.

Since 2021, many Bitcoin dynamics have changed. There has been indirect institutional adoption in spot Bitcoin exchange-traded funds (ETFs), such as the adoption of legal tender, technological advances in the protocol, and improvements in renewable energy usage rates for crypto mining.

According to the graph below, created by Climate Tech Capitalist Daniel Batten and data analyst Willie Woo, Bitcoin mining's sustainable energy usage is currently peaking at over 55%. The growth is part of an ongoing positive trend from mid-2021.

Both of the conditions required by Musk appear to be met, so will he and Tesla keep their promises and restore Bitcoin payments?

Bitcoin miners claim wild renewable energy

Major decisions such as accepting cryptocurrency for payments in multi-billion dollar businesses require proven and robust data. But is the information on Bitcoin mining power enough?

Alex de Vries, data analyst and researcher at Vrije Universiteit Amsterdam and De Nederlandsche Bank, told Cointelegraph that Bitcoin miners' power statements lack transparency and certainty.

“The Bitcoin mining industry likes to talk about transparency until they ask for some data.”

He believes that regulations such as the European market's Crypto-Assets Regulation (MiCA) reveal the lack of transparency of these companies, as the MiCA calls for “robust, systematic, objective, verifiable and consistently enforced information disclosure.” He said.

Soon: Europe's crypto industry can ‘sleep better at night' with new parliament

De Vries pointed out how the United States Energy Information Administration (EIA) had some experience with this when it tried to collect data from crypto miners.

A group of crypto miners, including Riot Platforms and the Texas Blockchain Council, previously accused EIN of an “invasive” request to collect power usage data on crypto miners in 2024. The EIA eventually lost in court and agreed to destroy all the information it received.

De Vries said miners have made some “wild claims” about using renewable energy. Digital asset company CoinShares In 2019, 78% of miners used renewable energy and “years later they had to swallow that question,” he recalled.

Musk believes that it is “a well-known” data fraud, which could cause Musk to stop accepting Bitcoin.

Accurate power data for Bitcoin mining

Like many industries, getting the right data for Bitcoin mining is complicated. Biased researchers may find it useful to adjust data metrics to their own agenda, as was the case in the mid-20th century when tobacco companies funded research that drew false conclusions about the link between smoking and cancer.

Alexander Nummüller, head of research at the Cambridge Center for Alternative Finance (CCAF) – which studies power consumption crypto – told Cointelegraph that data recovery is constantly improving.

However, “current methods for producing electrical hybrids are still based on many assumptions or are subject to some biases,” he said.

To avoid this, researchers should try to use a rigorous method to collect data.

They combined the upper and lower bounds to calculate Bitcoin's electricity consumption and created an estimate from multiple data points, now creating the Cambridge Bitcoin Electricity Consumption Index (CBCI).

However, the key is to know which energy sources the miners are using. According to CBCI, the use of coal remained stable and decreased from 40% to 36%.

If gas and nuclear were included as renewable energies, Bitcoin mining's renewable energy usage rate would be 63%, with gas leading the way. However, if both are removed from the calculation, the rate drops to 28%.

Neumüller pointed to other studies from the Bitcoin Mining Council (BMC), which are based on surveys instead of estimates. According to a BMC report released by mid-2023, the world's mining industry's sustainable electricity use will increase to 59.9%. This data comes from a study of miners in North America.

The CCAF survey is carried out by an independent body, while the BMC is an industry body set up by miners. For Batten, this gives CCAF more credibility, as he explained in his introduction to the research model Bitcoin Energy and Emissions Sustainability Tracker.

Despite CCAF's scientific approach, Batin noted that there is a lack of data on off-grid mining, which is linked to sustainable energy sources that are not part of the traditional electricity grid. These include solar, wind, hydroelectric power and natural gas.

Batten said CCAF uses outdated data, as their estimates are based on data from January 2022. 25%

Neumüller said that CCAF is currently adding a new data set, “directly from miners and actively looking for ways to enhance our current IP-based electricity mix estimates, adding more quality to the locations and energy sources used by miners.”

Crypto is an ever-evolving industry. Based on the evidence he has seen so far, Neumüller concludes, “emissions are expected to continue to decline significantly.” Mostly replaced by gas.”

The volatility in Bitcoin mining data is a fact; However, Batten definitely said that the rate is more than 50%.

“It's still statistically likely that mining is less than 50%, but I put this chance at less than one in a million.”

The percentage of renewable resources used by Bitcoin miners shows a consolidation of more than 50%, which meets one of the requirements of Mask. However, can BTC miners guarantee long-term growth in renewable energy adoption?

Stable regulation is essential for renewable energy.

One of the most significant changes in the dynamics of the Bitcoin mining industry has come from regulation: a fake ban on crypto mining in China. China has not directly banned crypto mining; It has banned coal-based Bitcoin mining and some large operations that move it outside the country.

Before the ban, 50–60% of the world's bitcoin mining capacity was based in China. The ban led to an exodus that has changed the face of the industry ever since.

Neumüller noted that significant declines in mining activity in China and Kazakhstan and the emergence of other countries have strengthened the US as a global mining hotspot with a total of 37.84% of Bitcoin's total hashrate.

The researcher said that this geographical change in the distribution of global mining activity has affected the estimation of electricity mix. The volatility of Bitcoin mining drives miners to look for the cheapest source of energy available. In the US, as in many developed countries, renewable energy is the most affordable form of energy.

Developed countries are subsidizing the United Nations' Sustainable Development Goals, one of which calls for the widespread use of renewable energy. Crypto miners can leverage renewable energy providers as they can use energy that is wasted due to the mismatch between renewable generation and demand.

Additionally, Bitcoin mining is location-agnostic, so miners can install their facilities wherever there is a renewable energy source. For example, many mining facilities have migrated to countries that do not have an abundance of hydropower, such as Paraguay, Uruguay, and Ethiopia.

China's case shows how crucial regulation can be for Bitcoin's mining power, with the US now debating how to regulate the industry.

The crypto industry says President Joe Biden's stance could kill the US Bitcoin mining industry, while former President Donald Trump supports “Made in the USA” Bitcoin.

Miners can always migrate to other countries if the regulations prevent them or make their business unprofitable. However, regulatory uncertainty may not help Tesla's decision to accept Bitcoin or not, as renewable energy rates can change dramatically depending on the directive.

Will Musk Bring Bitcoin Back To Tesla?

Mook may be a controversial figure, but the billionaire has shown little fear of public opposition when he has a goal in mind.

This was evident when he shared his embarrassing comments about Disney CEO Bob Iger following the ad boycott on X.

“I honestly don't think he's afraid of anyone but his mother!” Nick Cowan, CEO of fintech Valerem, told Cointelegraph.

Tesla is a company working to improve the environment by providing technological solutions and electric vehicles. The public perception that Bitcoin has a significant environmental impact was not consistent with its values. Although there are many data metrics that show that Bitcoin is not that harmful to the environment, it is not clear whether Musk can take that step. De Vries believes it could be detrimental to Tesla:

“Relying on any claims about Bitcoin mining at this point and any potential renewals will set Tesla up for another public relations risk.”

Oleg Fomenko, entrepreneur and founder of Lab Economy, believes that “Tesla as an electric vehicle manufacturer already does a lot for the environment” and therefore “there is no incentive for environmentalists to exert pressure.” “

Some segments of the public see no use for Bitcoin and “are frustrated with wasting precious resources doing calculations that are not useful for Bitcoin,” de Vries said. He believes that “no renewables can fix issues like e-waste generation.”

Recently: Donald Trump wants the US to buy the Bitcoin mining industry

Fomenko concludes that Muck must decide on “the cost of action and the cost of inaction.” When he doesn't act, “few of us reading this are disappointed that Elon didn't keep his word,” the results are less certain and more at risk.

He believes this depends largely on “Elon's willingness to take another post shot at Gary Gensler and the US Securities and Exchange Commission.”

As Tesla's CEO, Musk has the final say. If he were to bring back Bitcoin, he would have to be informed and prepared for the backlash, especially from green policy advocates.

Tesla did not respond to Cointelegraph's request for comment.