Third-party Bitcoin “miners” process blockchain data on CPUs or even smartphones to earn units of the cryptocurrency. The high-powered computers needed to process the amount of data involved use huge amounts of electricity, totalling more than some entire countries.
Esoteric tech tycoon Elon Musk has said environmental fears were behind his move to stop taking the cryptocurrency as payment for his Tesla electric cars.
In a tweet on on Thursday musk said “insane” energy use of high-spec computers used to “mine” its decentralised blockchain data storage system was behind the decision that crashed Bitcoin’s value by a tenth.
Crypto news site CoinDesk reported that the virtual currency’s market price had fallen by more than 11 per cent to $49,400 per unit by Thursday afternoon — and warned it could sink as low as $42,000.
Musk has in recent weeks endorsed Bitcoin’s new rival Dogecoin, and ran a straw poll on Twitter to ask fans if he should accept it as payment.
Third-party Bitcoin “miners” — some of them amateur enthusiasts — process blockchain data on CPUs or even smartphones to earn units of the cryptocurrency. The high-powered computers needed to process the amount of data involved use huge amounts of electricity, totalling more than some entire countries.
But the vein of Bitcoins will soon run out, as 18.5 million of the 21 million cap set by the company have already been dug from the virtual ground.
Tesla’s stock had a total value greater than that of the nine biggest carmakers combined in December 2020 — despite the firm producing only a small fraction of the number of vehicles that its biggest rivals churn out.
Responding to Tesla’s announcement, NBA basketball team the Dallas Mavericks owner Mark Cuban said the club would still take payments for tickets and merchandise in bitcoin, ethereum and dogecoin — claiming they were more environmentally-friendly to mine than the gold held by national central banks to back their currencies.