Tesla Suspends use of Bitcoin to buy its cars, Elon Musk tweets citing environmental harms

Tesla

Elon Musk, CEO of Tesla Inc. in a statement recently, revealed that Tesla shall suspend the acceptance of Bitcoin for car purchases. The decision came in ambit of the various concerns raised on the harmful impacts on the climate that are caused in the process of mining cryptocurrency.

“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” Musk said in a tweet. He also added that Tesla won’t be selling any of its Bitcoin.

Tesla had vocalised its desire to accept the digital currency in the month of February this year. And had also invested around USD 1.5 billion in Bitcoin, which resulted in an increase in the digital currency’s value by 20 per cent. However, this decision was met by criticism and hostilities by the environmentalists world over.

Bitcoins are generated through a process called mining. The process involves solving complicated mathematical problems and puzzles. This process is entirely dependent upon computers and therefore electricity. With the increase in the value of bitcoin, the difficulty of the problem keeps increasing and also the energy consumption. The process follows the blockchain technology of shared nodes of the network.

As per a report published by Digiconomist, in December 2017, Bitcoin used about 32 terawatts of energy per year. This amount of energy could power roughly 3 million households in the U.S. Also, the process uses a startling amount of energy that is often generated through fossil fuels, particularly coal. The increase in the value of Bitcoin is directly linked to the amount of energy used to solve complex problems and puzzles.

Further, according to research conducted by the Technical University of Munich and the Massachusetts Institute of Technology, the results showed that in late 2018, the entire bitcoin network was responsible for up to 22.9 million tons of CO2 per year and the total global emissions of the greenhouse gas from the burning of fossil fuels were about 37 billion tons for the previous year.

After Musk revealed his decision to discontinue the use of the currency on Twitter, the price of Bitcoin fell over 10 per cent to USD 51,847. Also, there was a fall in the value of other digital currencies like Ethereum. Meanwhile, Tesla ran a Twitter poll on whether the users shall want to continue making payments in Dogecoin.

Founded in 2003 as Tesla Motors by Martin Eberhard and Marc Tarpenning as a tribute to inventor and electrical engineer Nikola Tesla, the company is an electric vehicle company based in California. Elon Musk has served as its CEO since 2008. In 2020, the company surpassed the 1 million mark of electric cars produced.

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  • Online Team Asia Tech is a team of Journalists, Entrepreneurs, and Enthusiast Writers who contribute to the platform by bringing everyday stories, updates, opinions and insights from the Asian Startup Ecosystem.

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