Elon Musk and Cryptocurrencies connection: why Tesla as stopped to accept BitCoin?
Elon musk was one of the most influential person in the world according to Forbes last
year.
That is evident of the fires he fuels in the world of cryptocurrency.
Elon has always been a strong supporter of Cryptocurrency and has been very vocal about
it on his social media platforms.
But a recent announcement made by Tesla and Elon musk have shook the world of cryptocurrency
by surprise.
In message posted on Twitter, Elon Musk, Tesla’s chief executive, said Tesla has suspended
Vehicle purchases using Bitcoin due to environmental and climate change concerns.
Three months Earlier Tesla said that it would begin accepting cryptocurrency Bitcoin as
payment, but has abruptly changed its course now.
But this decision isn't out of the blue, the decision taken by Tesla was carefully taken
in regard with respect to the recent changes in energy consumption in bitcoin mining.
So, sit back and relax and we will explain you the exact reason why Tesla stopped accepting
Bitcoin and why it was necessary.
Tesla announcement in march that it would accept Bitcoin as a payment method was met
with an outcry from some environmentalists and investors.
The electric car company had revealed that it had purchased 1.5 billion dollars' worth
of Bitcoin and Elon announced the company’s plan to accept the currency.
But on 13th of May, Musk wrote on twitter, “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, Cryptocurrency is a good idea... but this cannot come at
great cost to the environment.
Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon
as mining transitions to more sustainable energy.”
Bitcoin plunged by 17% after the announcement sending the price of bitcoin under 50,000$.
As cryptocurrencies are exploding in value, the amount of energy being used in the mining
is increasingly under scrutiny.
Elon musk has always been a supporter of cryptocurrencies, often tweeting about Bitcoin and the once-obscure
Digital currency Dogecoin.
His tweets in recent months have turned Dogecoin into the world’s fourth biggest cryptocurrency.
But since his announcement, a lot of people have started making speculations that Tesla
should have done a proper research in the case prior to buying bitcoins.
But that’s isn't the case, Tesla did a proper research before making such a decision.
Elon posted a picture of Energy consumption trend over a period of last few months on
his twitter.
If we head to the Cambridge Bitcoin Electricity Consumption website, we can see the Energy
usage trend in the past few months has skyrocketed.
If you look at the graph of energy consumption, we see an insane rise in the energy consumption
just after Tesla announced their purchase of Bitcoin in February.
We can clearly see a huge increase in annualised terawatt hours of energy consumption for bitcoin
mining.
This is the critical factor as to why Tesla made their decision to stop accepting payments
in bitcoin.
We have seen incidents of private power plants that were left dead for years but were started
again when the crypto boom came along, having an enormous climate impact.
. The best example is the Greenidge power plant in upstate New York.
The once-abandoned power plant was bought by private equity firm Atlas Holdings and
re-tasked.
Now, Greenidge is on the verge of ramping up its bitcoin ambitions.
The plant’s smokestacks are increasingly polluting the atmosphere in the service of
bitcoin mining.
Environmental groups and local residents are confirmed about the plant’s footprint.
There’s always been a debate about how much energy is used in the production of cryptocurrencies.
Bitcoin, in particular, uses as much energy per year as the Netherlands.
Its carbon footprint is supposed to be the size of Singapore’s and it also generates
as much electron waste as the country of Luxembourg.
Bitcoin mining involves millions of computations in kind of a lottery.
But some cryptocurrencies like, Ethereum can be created in less energy-intensive ways and
can prove as a better environmental alternative in the future.
Bitcoin is a creature of fossil fuels, especially coal.
In the United States, miners are repurposing obsolete facilities to supple the cheap power
they cherish.
That Bitcoin spreads a carbon footprint bigger than Australia’s.
The dominance of Chinese Bitcoin miners and lack of motivation to switch from cheap fossil
fuels to more expensive renewable energy sources could mean there are few quick solutions to
the emissions concerns over Bitcoin.
So, after days of analysing everyone’s response Tesla had to make a difficult choice of retreating
from taking Bitcoin as a payment option.
Their choice sent their stocks plunging for about 17%.
But it was a tough decision that had to be made.
Tesla investors also seemed happy after the announcement.
So, what do you guys think about the future and potential of cryptocurrency?
Will Tesla look for an alternative and if yes what would it be?
Let us know your thoughts and views in the comment section below.
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