In light of long-brewing environmental concerns, CEO Elon Musk confirmed on Wednesday that Tesla would no longer be accepting bitcoin for new cars purchases.
Bitcoin fell by over 10% after Elon Musk’s announcement to discontinue use, only about two months after he started letting people pay with the world’s biggest digital currency. There have been many cryptocurrencies, including ethereum, that have fallen sharply in trade prior to rising again in price.
The public interest in purchasing Tesla cars using bitcoins is a stark contrast between Elon Musk’s reputation as an environmentalist and his wealth, which have boosted the price of both his own and other currencies.
Some investors, along with environmentalists, have been increasingly critical about the way bitcoin is “mined” using vast amounts of electricity generated with fossil fuels.
Musk also agreed with that “Coal has the worst emissions of any fuel,”
“Cryptocurrency is a favorable but it will come at great environmental cost,” he warned. After the market closed, Tesla shares fell 1.25 percent after hours. In February, having accepted $1.5 billion in cryptocurrency for cars in March, helped boost the price of bitcoin by about 20 percent.
When mining becomes less energy-intensive, they will power, the billionaire explained, Tesla would keep its bitcoin in reserve and use it to fund the transition. Currently, the complexity of the computational puzzles which power the creation of Bitcoin often require the use of electricity generated from fossil fuels, particularly coal, for competition.
The latest figures from the University of Cambridge and the International Energy Agency show that mining bitcoin consumes the same amount of energy as the Netherlands used in 2019.
According to analysts, Musk’s container is now firmly in place. Edward Moya, a senior market analyst at OAN, agreed: “The environmental impact from mining bitcoins was the main reason for the whole cryptocurrency market.”
Meltemit Demir, chief strategy officer at digital asset manager CoinShares Group, believes that Elon Musk’s back-engineered paywall didn’t have resulted in a significant sales because it reduced payment processes to a whole lot. “He is being bothered by a lot of people questioning and criticism while allowing his Bitcoin entry to remain on his balance sheet,” Demir explained.
Musk did not say in his Twitter comments whether any vehicles had been purchased with bitcoin and Tesla did not immediately respond to a request for comment.
Those who promote for the adoption of Bitcoin say that the existing financial system wastes a lot of energy due to its millions of people and servers being located in air-conditioned locations.
“Finally,” said Musk, “I believe in cryptocurrency.”
We are looking at other digital currencies with electricity use rates equal to or less than 1% of Bitcoin’s and their transactions, he wrote on Wednesday.
The other day, it was revealed that Musk conducted a Twitter poll on whether to accept dogecoin, a cryptocurrency that had recently become a laughingstock.
He made a commercial space announcement of his new commercial space company SpaceX intends to pay for a mission to the moon on Sunday, right as the crypto prices fell because he was called a “pump and dump” on an episode of “Saturday Night Live”
Due to the Dominance of Chinese bitcoin miners and the bitcoin-fueled emissions problem may be unresolvable
They constitute about 70% of bitcoin’s total supply, according to data compiled by the University of Cambridge. In the rainy season, they prefer renewable energy, such as hydro, but in winter they rely on fossil fuels.
Regulators in Beijing have said that they are analyzing data centers linked to cryptocurrency mining to assess their impact on the use of electricity and its effect on the environment and the city, according to reports from Reuters last month.
Some cryptocurrency analysis firms believe that they can trace the origins of bitcoin, which may make its cost go up.