Elon Musk posted on Twitter that Tesla (TSLA) has suspended the use of Bitcoin (BTC) as a payment method for purchasing automaker’s electric vehicles. Tesla introduced the Bitcoin payment option back in March which resulted in a historical pump in BTC price.
However, Musk has clarified that Tesla is still keeping its Bitcoin holdings and does not intend to sell it anytime soon. Currently, Tesla holds around $1.35B Bitcoin after selling 10% of the $1.5B worth of BTC the automaker bought earlier this year.
High use of electricity coming from non-renewable sources like coal for Bitcoin mining has become the reason for discontinuing BTC as a payment option at Tesla, Elon Musk explained on Twitter.
Tesla has suspended vehicle purchases using Bitcoin. We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.
Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at a great cost to the environment.
Tesla will not be selling Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.
Elon Musk via Twitter.
To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal.
Elon Musk
The graph above by Cambridge Bitcoin Electricity Consumption Index (CBECI) shows how the need for electricity for Bitcoin mining and transactions is growing exponentially each year. And since a big chunk of this electricity is not coming from sustainable and renewable energy sources, it directly collides with Tesla’s mission for a sustainable future.
According to a report by Ars Technica, a decommissioned fossil fuel electricity plant was brought back to life in upstate New York only to power Bitcoin mining. The firm Atlas Holdings which has acquired this plant has some ambitious expansion plans for Bitcoin mining at the expense of the environment and health of the Earth’s inhabitants.
A couple of days before announces Tesla’s suspension of Bitcoin, CEO Elon Musk created a poll on Twitter asking his followers if Tesla should accept Dogecoin as a payment method. The results of the poll and the flood of comments underneath mostly support the use of Dogecoin as a payment option for purchasing Tesla vehicles.
With this topic heating up and Musk getting asked questions about Dogecoin’s energy consumption vs. Bitcoin’s, “Working with Doge devs to improve system transaction efficiency. Potentially promising,” Musk said on Twitter.
This revelation by Elon Musk helped pump the Dogecoin price up by ~32% within 24 hours. If Dogecoin mining and transactions become more energy efficient with Musk’s intervention, it can reach the dream price of $1, although Musk’s SNL appearance failed to achieve that this past weekend.
Bitcoin’s price took a big dip after Musk’s announcement, but it’s slowly regaining the lost traction. Bitcoin miners and users should push really hard to make the coin’s creation and use more sustainable in order to be the real global digital currency of the future.
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