Elon Musk has recently tweeted out against carbon emissions of the Bitcoin mining sector and defined a different outlook for further investment plans. He criticized the use of fossil fuels in Bitcoin mining in some areas (possibly China) and has declared that no more investment in Bitcoin will be made for the time being and other lesser energy-intensive “green” cryptocurrencies are being considered.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
Currently, there is no definitive information on which “green” cryptocurrency Musk is leaning towards. Since Bitcoin has most of the resources of the cryptocurrency sector, it is in practice going to be much more environmentally dirty in absolute terms. Any other cryptocurrency is theoretically greener than Bitcoin itself, that is an important point to remember. However, the energy requirement for a mean transaction value is often considered a better metric for determining just a how energy-intensive the mining process really is.
However, in Musk’s tweet, he specifically mentions the energy-transaction cost. While Musk’s antics haven’t really taken off in recent times especially with the Dogecoin crash during his Saturday Night Live appearance last Saturday, he does command considerable social media influence and some section of the area listens to him intently and makes trades accordingly.
According to one crypot influencer, the answer was either Ethereum or Ripple (XRP).
My prediction: Tesla will select either use ETH or XRP.
— The Cryptic Poet (@1CrypticPoet) May 12, 2021
Ripple and Ethereum have been around for more than 5 years and each has its own pros and cons. While uses a hybrid system compared to Bitcoin and is slated to shift to a more energy-conservative network, it is still a quite dirty system overall when it comes to energy consumption. However, Ripple on the other hand is very energy-conservative compared to either Bitcoin or Ethereum. It only uses a fraction of the amount used by the top two.
According to some estimates, Bitcoin uses around 700 kWh per transaction while Ethereum uses 62.56 kWh and Ripple’s XRP uses 0.0079kWh. Dogecoin on the other hand uses only 0.12 kWh per transaction but that may rise as Dogecoin gets more popular because it uses the same system as Bitcoin. Litecoin on the other hand uses 18.522 kWh per transaction.
It is yet unclear which cryptocurrency Elon Musk is referring to and is considering at the moment. But, if I were Musk I would be careful. Many of these smaller networks get a lot of problems as they scale. Bitcoin is currently, the only network that is secure and can scale fast enough. Much of these smaller cryptocurrencies also see an increase in transaction costs as activity rises so that is another major area of concern.
Image source: QuoteInspector.com
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