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Tesla founder Elon Musk recently named himself “technology“Or the king of technology. One kind Better nickname It may be “The Wizard of Oz”.
Entrepreneurs have an amazing ability to pull strings in the cryptocurrency world. In February, when Musk revealed that the company had Purchased $1.5 billion The value of cryptocurrency. After a similar Delphic tweet, so did the price of Dogecoin.
But last weekend Dogecoin plummets When Musk admitted In American comedy shows Assets can be “trouble”.Now Bitcoin has plummeted after it plummeted Another tweet, This time showed that Tesla will no longer accept Bitcoin to buy electric cars. Musk said: “We are concerned about the rapid increase in the use of fossil fuels in Bitcoin mining and trading, especially coal,”.
activist With reporters Of course, this issue has been highlighted for several months. Two surprising statistics sum up this problem.
First, It looks like So far, two-thirds of Bitcoins have been mined in China through the use of computing algorithms, using data center Rely on coal to generate electricity. Indeed, the connection between Bitcoin and black money is so close that crypto expert Alex Lipton pointed out that every time an accident occurs in a Chinese coal mine, the price of Bitcoin will increase.
Second, the cryptocurrency market worth 2tn is developing so fast that it consumes a lot of energy. Mining Bitcoin accounts for half of all cryptocurrencies, and currently consumes the same amount of energy each year as the Netherlands consumed in 2019.the scientist caveat This threatens Paris’ climate goals.
Entrepreneur Anthony Scaramucci and other Bitcoin enthusiasts pointed out that statistics require background information, and traditional finance also requires a lot of energy.
The same is true for other types of technology.as a paper Co-authored by a former researcher of Google’s artificial intelligence ethics department, some of the AI processes behind Google’s search are “It is estimated that As much energy as trans-American flights.”
Even with this warning, the fact is that Bitcoin’s carbon footprint is embarrassing, not only for Tesla, but also for millennial cryptocurrency investors who care about green issues. This in turn emphasizes three major lessons for all investors.
First of all, even for stocks marked with ESG, no one can ignore today’s environmental, social and governance issues. Tesla is a feature of many ESG funds because investors focus on electric vehicles and ignore other issues.
However, digital transparency now enables activists to monitor company activities more effectively than ever before. This means that investors need a horizontal perspective when assessing the value of a company, because ESG risks are rarely static or binary, and often involve changing trade-offs.
Secondly-and headed by this-investors need to pay attention to the debate around the carbon footprint of technology as an example of this changing landscape. The battle to solve the problem of Bitcoin’s carbon emissions is underway. The Rocky Mountain Institute is a clean energy non-profit organization. Recently joined forces Discuss solutions with UN officials and financial technology leaders. It may be necessary to make changes to the calculation process surrounding encryption to reduce energy consumption.Last week, a “green” cryptocurrency that uses less processing power was called share it Started, launched.
Another option is to use green power, for example by converting Chinese coal to Iceland’s hydroelectric power. Fans like Scaramucci believe that if there is a registry that allows investors to track the provenance of bitcoin, then this can solve the problem.
It is not yet clear which idea is feasible. But the debate may explain why Musk tweeted him. And why veteran investor Stanley Druckenmiller (Stanley Druckenmiller) Say this week It is not yet clear which cryptocurrency will eventually dominate (assuming you think that, as Druckenmiller and I did, cryptocurrency will continue to exist). Few people predict that 15 years ago, Facebook (not MySpace) will dominate social media.
The third point is about supervision. Musk can be as impunity as the cryptocurrency Wizard of Oz because the department is opaque and largely unregulated.Financial decision makers now Threatening suppression.
But as report The Bank for International Settlements (BIS) pointed out that “the vast majority of jurisdictions in the world” have not yet implemented control measures to stop money laundering, let alone manipulate the market. In addition, “the definition of the scope of supervision in each jurisdiction is very different.” In plain English, supervision is a mess.
Liberals like this approach. The same may be true for musk.However, if encryption technology (regardless of the token used) will become more mainstream, then it urgently needs more Accountability And transparency. Given the anti-establishment origin of cryptocurrencies, perhaps this will be impossible.
However, the struggle to pass green standards may begin the process by providing young crypto enthusiasts with a reason to unite. If so, it may be the most significant impact of Musk’s tweets and the reason for the late review of Chinese coal mines (including coal and computers) by investors and regulators.
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