A little less than a year ago, cryptocurrencies were at the forefront of the climate change debate as many began talking about their impact on the environment. Since then, there have been different endeavors to help cut Bitcoin’s harmful effects.
This year is proving to be no different. Cryptocurrency proponents are looking at ways to make the asset more eco-friendly, and Tesla - the company that arguably began this shift - is now getting skin in the game.
Progress On A Pet Project
Earlier in April, Block Inc. (formerly Square) and cryptocurrency storage company Blockstream announced that they had broken ground on an initiative to build a solar-powered Bitcoin mining facility in Texas. As the two companies explained, the facility will be powered by 3.8 megawatts of electrical capacity using a 12 megawatt-per-hour (MWg) Megapack and a solar photovoltaic cell array developed by auto manufacturer Tesla.
The key technological breakthrough here appears to be Megapack - a string lithium-ion battery pack developed by none other than Tesla. The battery offers effective support and storage, and it has seen some massive adoption in the crypto space. For comparison, Hut 8, one of the leading crypto mining companies, is reported to have about 209 megawatts in total mining capacity. Megapack is expected to offer an impressive 3.8 megawatts, effectively improving the upcoming facility’s output.
Blockstream and Square have claimed that the point of this joint venture with Tesla is to test the feasibility of operating a Bitcoin mining facility with zero emissions. Success with this would most likely mean that they would expand in the future and develop other mining facilities that emit so many greenhouse gases.
Besides physical development, the teams at Block and Blockstream will also build a dashboard to measure some key metrics from the facility. The dashboard, which will be available publicly, will report on the project’s economics and measure key metrics like Bitcoin mining capacity, power output, expenses, and overall return on investment.
Not A Bad Partner To Have
Tesla’s addition appears to be a continuation of the partnership between Block and Blockstream, which began last year. At the time, both companies pledged to commit resources toward developing a solar-powered Bitcoin mining facility. Block - known then as Square - put up $5 million of its own money to go to the project, while Blockstream committed its expertise to manage crypto mining operations.
“Together, we'll be creating a public-facing dashboard to serve as a transparent case study for renewable energy and bitcoin mining. As we continue to explore the synergies between the two, we're excited to share our ongoing learnings, and real world data points,” the payment processing company said in its release at the time.
Of course, it is only right that Tesla would join such an endeavor. The company was at the forefront of this debate about Bitcoin and the environment last year, and its actions sparked the current shift to reducing Bitcoin’s carbon emisions.
In April 2021, barely three months after integrating crypto for payments, Tesla CEO Elon Musk suddenly announced that the company would no longer accept crypto payments for products. The reason was simple - Bitcoin transactions aren’t necessarily good for the environment, and Teals couldn’t continue accepting the asset while knowing this.
Almost a year after the announcement that shook the markets, Tesla is doing something about the problem.
Everyone’s Concerned About Bitcoin
The partners aren't the only ones looking to keep Bitcoin eco-friendly. In March, Ripple Labs co-founder Chris Larsen launched a campaign with Greenpeace - one of the world's foremost climate change activity groups. The campaign - called “change the code, not the climate” - is looking to pressure several crypto industry heavyweights to support a proposal to change Bitcoin’s fundamental code to make it more eco-friendly.
Speaking with Bloomberg, Larsen explained that the campaign’s goal isn’t to make Bitcoin any less exciting than it really is. Instead, the focus is on ensuring that Bitcoin becomes environmentally sustainable enough to thrive and become the future currency.
Larsen added that most major cryptocurrencies have already embraced the proof-of-stake (PoS) mining algorithm, which is comparatively less resource-intensive than Bitcoin’s current proof-of-work (PoW) algorithm. Even Ethereum - Bitcoin’s biggest competitor - is working towards a full transition that is expected to happen later this year. So, Bitcoin has become an outlier, which needs to change.
The campaign aims to work with industry experts on a code change that will make Bitcoin more eco-friendly. It’s still to be seen whether many in the industry would love that.