In a tweet today, Tesla CEO Elon Musk said the company will no longer accept Bitcoin as payment for its vehicles, citing the cryptocurrency's energy expenditure.
Wrote Musk, "We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel."
Tesla began accepting BTC as payment earlier this year, after reporting a $1.5 billion investment in the coin. The car maker's move into the market precipitated a rise in price—from $39,000 at the time of the announcement on February 8 to $53,000 a week later.
That led to some blowback from climate-conscious consumers, who found Tesla's foray into Bitcoin at odds with its pro-environment image.
Bitcoin uses something called proof of work to coordinate consensus from all the computers that run the software. To secure the network, specialized computers attempt to solve complex cryptographic puzzles. The first to do so wins newly minted Bitcoin. Since speed is important, the "miners" with the most computing power win most often. And that power uses up a lot of electricity. A recent study from Cambridge University estimated the annual power consumption to be higher than Argentina's.
But, others argue much of the network runs on clean, renewable energy sources, including hydropower. A September 2020 report, also out of Cambridge, estimates that 39% of the network's power comes from renewables. Crypto asset manager CoinShares puts it as high as 77%.
But Musk has seen enough, at least for now. "Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy," he wrote, before suggesting the company may invest in cryptocurrencies with a smaller carbon footprint.
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