It was just a few weeks ago that Elon Musk announced that Tesla will be accepting Bitcoin as currency from those looking to purchase its cars. But now, the business magnate has announced that Tesla will be suspending their previous decision as the company is concerned about the constant increase in the usage of fossil fuels for Bitcoin mining and transactions.
In his tweet, Elon Musk shared that Tesla has suspended vehicle purchases using Bitcoin as they are very concerned about Bitcoin mining and transactions that use a lot of fossil fuels. It has only increased with time, especially coal that has been deemed the most dangerous pollutant as it has the worst emission of all fuels out there. So, even though Elon Musk still believes that cryptocurrency is a good idea and has a “promising future,” the price of its usage can’t be its continued detrimental impacts on the environment. Recent reports have even suggested that Bitcoin’s carbon footprint is almost equal to that of Slovakia.
For those who don’t know, Tesla bought $1.5 billion of Bitcoin earlier this year and sold 10% of it later on the open market. And now, after making big announcements about the cryptocurrency, Tesla has suspended transactions using Bitcoin. But the company has not given up on cryptocurrencies altogether as Elon Musk shared that Tesla will continue exploring other types of cryptocurrencies and focus on those that have less than 1% of Bitcoin’s energy per transaction.
After Elon Musk’s announcement, Bitcoin fell as much as 15% during the day and hit a low of $46,000. But it did recover some of its losses and currently sits at $50,592. As for the Bitcoin holdings that Tesla still has, Elon Musk has shared that the company will not be selling them and will instead wait for the cryptocurrency’s mining to become more sustainable before using it for transactions.
This recent change in the tide goes against Elon Musk’s previous plans when Tesla purchased Bitcoin to “diversify and maximize” its investment and announced that it would accept payment in Bitcoin. At the time, Musk shared that the Bitcoin paid to Tesla will not be converted into Fiat currency and the facility to pay via Bitcoin will be available outside the United States later in 2021. Given Tesla and Elon Musk’s recent decisions, these plans are obviously not in the pipeline anymore.
But the confusing thing is that the reasons- the excessive use of fossil fuels and the pollution created in the mining of Bitcoin- Tesla has cited for discontinuing its use of the cryptocurrency were very much present and well-known long before the company took the decision to use it in the first place back in March. According to a study last year, it was estimated that the mining of bitcoin used 7.46 GW of electricity on average. The current usage was deemed to be at 16.71 GW, making the annual usage a whooping 147.79 TWh.
This is not the first cryptocurrency whose value tumbled because of Elon Musk as earlier this week, after his first appearance on SNL where he called Dogecoin a “hustle,” the cryptocurrency price experience a decrease of almost 35%.