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Though initially Tesla was strongly interested in Bitcoin, now the company will look for its “green” alternatives.
Electric vehicle company Tesla Inc (NASDAQ: TSLA) will no longer accept Bitcoin as a form of payment for its vehicles. Tesla CEO Elon Musk cited environmental concerns as the main reason for the move. He also revealed that the company was looking into more energy-efficient, “green” coins instead of Bitcoin.
According to the research conducted by Houston-based TGR Datacenters, Bitcoin uses an average of 707 Kilowatt-hours (KWh) of energy per transaction. In a May 13 Tweet, Musk explained that the EV company was “concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions”. He also assured that Tesla would not be selling its estimated 38,000 BTC – but would save it for use in transactions once Bitcoin had moved to more environmentally sound mining methods. Bitcoin prices took a 14% plummet following the news.
Meanwhile, Tesla is looking into other cryptocurrencies that use ‘less than 1% of Bitcoin’s energy per transaction’.
Online Speculation on Tesla’s ‘Green’ Bitcoin Alternative
The tweet set crypto social media ablaze with speculation on what “sustainable” alternatives Tesla might be looking at. Ether and XRP were the most commonly thrown around names.
Cointelegraph compiled a list of potential green Bitcoin alternatives.
Ethereum made the list largely due to the approaching upgrade to ETH 2.0. In its current state, the altcoin uses around 60KWh of energy per transaction, significantly less that than BTC. The issue is that the Ethereum network is secured via the very method that makes the Bitcoin network wasteful of energy – Proof-of-Work (PoW) consensus. This is easily remedied in ETH 2.0 which will employ a Proof-of-Stake (PoS) consensus instead. PoS has been proven to be about 99% more efficient than PoW.
This is true of arguably all coins running on PoS networks. Choosing an alternative on this touchstone alone would leave Tesla with a lot of options including Cardano, EOS, TRON and Solana.
XRP and Stellar Lumens (XLM) are also contenders based on the fact that all their tokens were pre-minted. XRP uses an estimated 0.0079 KWh per transaction while XLM uses the Stellar Consensus Protocol (SCP) for authentication.
Algorand, which as of 22 April is completely carbon-neutral, uses a Pure Proof-of-Stake method also made the list.
Dogecoin is also a close contender. And not only because of Musk’s endorsement. The coin’s mining occurs on the PoW Litecoin chain using the quick and energy-efficient Scrypt algorithm. It uses about 0.12 KWh per transaction. This knowledge coupled with Musk’s Twitter poll asking if Tesla should add Dogecoin to its payment methods could fuel speculation.
Do you want Tesla to accept Doge?
— Elon Musk (@elonmusk) May 11, 2021
Chia – the New ‘Green’ Crypto
One cryptocurrency that may not have featured in many conversations is the new “green” cryptocurrency Chia coin. Chia was created by BitTorrent founder Bram Cohen. As opposed to BTC and other forms of crypto, Chia uses a “Proof-of-Space-and-Time” system. This green coin is “farmed” not “mined”. Farming requires a large number of empty hard disks on which plots of blocks are then added depending on the amount of space.
However, while Chia farming does not use as much electricity as other coins, there are environmental implications to be addressed.
Aron Peterson, who works in the UK film industry says that “this results in mountains of electronic waste as hard drives will fail faster and more often. The poorest people in the world already live with mountains of e-waste pollution we dump on them and this is just going to add to that.”
Also, since Chia was announced in February, prices for 12TB drives have increased by 59% in China. Currently,y 3 million terabytes of disk space have been completely assigned to mining in the country.