In a May 13 tweet, Musk referred to an increase in the use of coal and other fossil fuels to generate the power used for mining as the reason behind his decision.
Bitcoin, Ethereum, Dogecoin and other popular cryptos reached record highs this year, raising concerns about the amount of energy needed to mine the coins.
When Bitcoins are traded, computers across the globe race to complete a computation that creates a 64-digit hexadecimal number, or hash, for that Bitcoin.
Rigs usually use powerful GPUs from Nvidia and AMD to handle calculations and require high-wattage power supplies.
A rig with three GPUs can consume 1,000 watts of power or more when it’s running, the equivalent of having a medium-size window AC unit turned on.
Small operations, like those run by individuals, can get by with a typical standing fan.
The carbon dioxide produced by fossil fuels is released into the atmosphere, where it absorbs heat from the sun and causes the greenhouse effect.
As mining rigs consume more energy, nearby power plants must produce more electricity to compensate, which raises the likelihood that more fossil fuels will be used.
Its rainy season helps to generate so much energy that cities are looking for blockchain firms to relocate in order to avoid wasting power.
Musk said in May he spoke with North American miners, and they committed to using renewable energy sources.
Instead of computers trying to solve computations — referred to as proof of work — computers will be randomly selected to create blocks for the blockchain, while computers that weren’t selected will validate those blocks created.
To ensure miners do their job, each miner has to stake 32 Ethereum coins, also called Ether, which is equivalent to $85,000, hence the term for this protocol is called proof-of-stake.
To put that in perspective, Cardano’s energy use is a GWh and a half shy of providing enough power for the South Pacific island country of Niue, with its population of 1,620 people, for a year.