Electric car manufacturing company, Tesla to stop accepting Bitcoin payments over the concerns regarding the effect of cryptocurrency on fossil fuels. This information from the company’s CEO Elon Musk through his Tweet on Wednesday. The Tweet in which he said, “We are concerned about rapid increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP— Elon Musk (@elonmusk) May 12, 2021
The sudden change is almost two months after Musk announced that the cryptocurrency would be accepted as payment option at Tesla. The price of Bitcoin dropped by 4.92% nearly 45 minutes after he made his announcement, .
Although, Musk admitted that the cryptocurrency great, he also made it known that it has had a great impact on the environment.
He also said that Tesla won’t be selling the Bitcoin owned by the company. According to security findings, as of 31 March, the fair market value of its holdings is at $2.48 billion (£1.76 billion).
Bitcoin is a decentralized cryptocurrency that requires computing power to function, this includes sending, receiving, etc. And this is where miners come into the picture. Miners are those that unlock bitcoins through the solving of complex, unique puzzles using very and sometimes dedicated mining computers.
Due to its decentralization and reliance on computers for its transaction, it requires a lot of power, and the power usage might vary depending on the number of transactions and the amount being transferred across the Blockchain. With the rapid rise in the value of Bitcoin, the complexity of the puzzles and equations solved by the mining machines increases, more miners are getting in the loop and cryptocurrencies keep consuming even more computing power.
This increase in power consumption is, according to his Tweet is the reason Tesla would stop accepting Bitcoin payments for goods and services bought from their company.
The big question now is that even if cryptocurrency is the future of money, is it worth losing our environment for?