Elon Musk’s Bitcoin Mining Goal “50% Clean Energy” Will Be Complicated To Verify

On Sunday, Tesla CEO Elon Musk tweeted that Tesla will allow Bitcoin transactions again if there is a “confirmation of reasonable (~ 50%) clean energy consumption by miners with a positive future trend”. That goal has a big problem, however, as no one knows exactly how to measure 50% clean energy consumption, let alone exactly where the miners are geographically located.

Can Elon Musk’s goal of 50% clean energy be achieved?

Elon Musk and a number of billionaires have a lot to say these days and it seems that Musk can move the price of BTC with a single tweet. This was certainly the case when Tesla first accepted Bitcoin (BTC) for buying electric cars from Tesla.

Following that announcement, the price of BTC rose $ 10,000 and saw one of the largest daily candles in its lifespan. Then when Musk tweeted that Bitcoin would not be accepted and Tesla cited environmental concerns, the price fell significantly. Sunday’s tweet drove BTC prices up 9% and the price topped the psychological $ 40,000 region.

Despite the good intentions, it’s hard to say how Musk will achieve his goal of figuring out whether or not the Bitcoin mining ecosystem is using 50% clean energy. Some studies suggest that the goal may already be reached, as researchers have been studying the number of miners using renewable energy for quite some time.

Musk may want to read the report released by Coinshares in June 2019 that shows that 74.1% of the Bitcoin mining industry is “heavily” powered by renewable energy sources. Additionally, Coinshares published a report on the same topic the previous year and found that the share of renewable energy miners was around 77.8%.

Bitcoin mining data discrepancies everywhere

Global asset manager Ark Invest Management stated in mid-May that concerns about the Bitcoin network’s energy consumption were “misdirected”. Even John Lennon’s son stated that Bitcoin’s energy consumption was a dumb argument compared to the carbon footprint associated with consumption. In addition, Bitcoin.com News is still asking: Where do all these environmentalists get their electrical data from?

Well, it seems that most of the critics have used data from the Cambridge Bitcoin Electricity Consumption Index (CBECI) and the index provided by digiconomist.net. Both metrics show large discrepancies (between the individual sites) to this day and in December 2020 Bitcoin.com was news told back then the “CBECI map has not been updated for some time.” These discrepancies and the indication that the data was not regularly updated (at least in December 2020) could be problematic for analysts.

The reason this discrepancy was highlighted in the first place by the CBECI representative was because the website claims that 65% of the hashrate is located in China. This data point became controversial in July 2020 when research by Bitooda found that only 50% of the world’s hashrate came from China.

Despite the increased hashrate in North America and all western countries that bought thousands of mining rigs in the last month, CBECI data on June 14, 2021 still shows 65.08% of the BTC hashrate in China. Pool statistics show that Foundry USA has recorded a lot more hashrate lately, collecting 4.3% of global hashrate on Monday.

How much hashrate is in China has been controversial for some time and this fact was in mid-April 2021 highlighted by the co-founder of the blockchain data aggregator Coinmetrics.io, Nic Carter. April 21st, Carter further explained how hard it is to estimate the percentage decrease in hashrate.

Data points that are difficult to track are, so to speak, the point of a decentralized verification system

Meanwhile, Microstrategy CEO Michael Saylor has discussed the Bitcoin Mining Council on Twitter and stated that the group will meet this week, on Wednesday. Despite the good intentions for this idea, people are still skeptical of the concept and wonder if it even matters.

“On Wednesday you are all invited to meet with members of the Bitcoin Mining Council to discuss the latest on Bitcoin mining, the energy debate, network dynamics, Chinese mining policy, North American mining developments, technology trends and industry prospects,” said Saylor tweeted.

North America may have around 10 to 15% of the global hash rate, but that’s shockingly low unlike the majority of miners around the world. However, the latest crackdown news from Beijing may push the global miners’ industry to consume renewable energy anyway.

After all, there are a lot of miners around the world and we have some maps published by Coinshares and others that show some places that mining facilities are located. Some mining operations are very open to their location being disclosed, while others remain secret and do not disclose such information.

If you can’t really estimate where all of the bitcoin miners in the world are, then how do we know if 50% clean energy is being used? If we trust the reports, studies and information we have today, the 50% mark may already have been reached. Although with the number of discrepancies and difficult-to-track data points mentioned in this article, we may never know the exact number of miners using clean energy or exactly where they are.

What do you think of Elon Musk’s intentions for Tesla to accept Bitcoin again once miners break the 50% clean energy limit? Let us know what you think on this matter in the comments below.

Photo credits: Shutterstock, Pixabay, Wiki Commons

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