Tesla CEO Elon Musk cutting ties with BTC due to its “rapidly increasing use of fossil fuels for Bitcoin mining and transactions,” which started off with the company not accepting BTC payments for its automobiles, may have resulted in the costliest breakup of all time. Not only did the price of BTC drop by over 40% that led to a loss of $365 billion within the digital currency market, but Musk’s series of tweets drove people to question the sustainability of digital currencies as a whole. This is because Bitcoin mining uses Proof of Work (PoW) that utilizes a massive amount of electricity.
— Elon Musk (@elonmusk) JUNE 4, 2021
The topic of whether or not Bitcoin is green has been the talk of the town since then, and one of the panel discussions during the CoinGeek Conference held in Zurich, Switzerland last June delves into this issue with experts in the field. The panelists include leading blockchain solutions firm nChain CTO Steve Shadders, BSV-focused venture company Unbounded Capital Managing Partner Zach Resnick, UK-based digital wallet Zumo Environmental & Sustainability Advisor to the Board Kirsteen Harrison, and TAAL Distributed Information Technologies executive board member and CMO Angela Holowaychuk.
“I think what [Elon] got right is that BTC is not efficient and it does not, I think, have a good ratio of what it costs to use and the environmental cost relative to its utility. I think what people get wrong though is then that’s true for all proof-of-work blockchains, that’s true for all versions of Bitcoin, that’s true for crypto in general,” Resnick pointed out.
“You cannot just look at the power consumption in isolation, you have to look at what is the utility, what is this thing providing and how much power does that cost, and looking at the net metric—not just how much power, which I think is a pretty horrible metric for analyzing this,” Resnick added.
It certainly does not follow that just because PoW uses up a huge amount of electricity that it is inefficient and wastes energy. It all depends on the benefits and uses of this amount of energy. To mine one Bitcoin, it takes at least 5,500 kilowatt-hours, which is what an average American household consumes in a year. This is a lot, and it is definitely a waste of energy for BTC to consume this much with its network only processing five to seven transactions per second (tps). Furthermore, BTC has no other utility except as a speculative investment, where a small number of wealthy people keep it until the value goes up and it is time to sell it.
“I think proof of work is very much equated to BTC and I think what happens then is that people see this direct line between electricity use, the value that Bitcoin creates and that sits directly with the holder of that Bitcoin. So, in terms of benefit to society, I think that it has been difficult for the general public and those not involved in the crypto sector or with a particular interest in crypto to see what the wider benefits are,” Harrison explained.
Now, compare this to BSV that processes an average of 5,124 tps; and with the release of Teranode later this year, the network’s capacity will increase to over 50,000 tps. As BSV continues to scale, the numbers can even reach millions, trumping the VISA network when it comes to efficiency. On top of this, the BSV blockchain has unlimited potential for use across all industries, like government, healthcare, supply chain management, banking and finance, iGaming, eSports, and many others.
“And that’s where BTC falls down because no one actually sees any utility there. They just see a ton of money being thrown around for no comprehensible reason. But the connection between that utility and Proof of Work is a challenge, I think, for us in explaining why BSV can actually provide huge benefits to society at large at a cost that is justifiable,” Shadders concluded.