What About the Carbon Footprint of Fiat Money, Elon Musk?

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(24 May 2021) On May 12, 2021, Elon Musk announced that Tesla had suspended accepting payments in bitcoin for its cars because of environmental concerns related to bitcoin mining. 

  • Since the first block of bitcoin was mined back in 2009, the consumption of electricity energy need to mine bitcoins has increased to estimated 150 TWh per year — which exceeds the electricity consumption of such countries as the Netherlands, the Philippines, and Kazakstan. 
  • An extrapolation from bitcoin mining trends even suggests that bitcoin emissions alone could push global warming above 2°C.  But even if this projection proves accurate, it is not expected to happen until sometime between 2040 and 2050.
  • Another study comparing the sustainability of different currencies systems shows that today, bitcoin is much more environmentally friendly than paper money, represented by notes and digital banking deposits.
  • The maintenance of modern fiat money system, including banking deposits and paper money, produces almost 400 million metric tons of CO2 each year, which exceeds the amount of CO2 produced by bitcoin mining by more than four times.

Given Elon Musk's environmental concerns, should Tesla consider giving its cars for free? Since fiat money produces even more emissions than bitcoin, a truly sustainable option may be hard to find.

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