Tesla stops accepting bitcoin due to fossil fuel use

Chief Executive Officer of Tesla Inc, Elon Musk took on Twitter on Wednesday to announce that Tesla Inc has suspended the use of bitcoin to purchase vehicles. The reason for the decision was cited as concerns about the use of fossil fuel for bitcoin mining. 

“We are also looking at other cryptocurrencies that use <1% of bitcoin’s energy/transaction,” Musk said.

Bitcoin is one of the largest digital currency. It fell almost 17 percent after the tweet to its lowest point since the beginning of March. There was a slight improvement in the Asian trading but there was still off 12 percent at $50,933 early on Thursday morning.

Tesla was one of the first few companies to be accepting bitcoin as an official mode of payment. Tesla revealed in February it had bought $1.5 billion of bitcoin. Due to the announcement in March, there was a 20 percent surge in bitcoin. 

Musk said Tesla is not looking to sell any bitcoin and intends to use bitcoin for transactions as soon as mining transitions to more sustainable energy. 

“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,” Musk said. 

As per recent data from the University of Cambridge and the International Energy Agency,  bitcoin mining uses about the same amount of energy annually as the Netherlands did in 2019. 

The environmental impact of mining bitcoins is one of the biggest risks for cryptocurrency. This is totally opposite to the ‘environment-friendly’ image of Tesla.

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