Reason Why Tesla has suspended vehicle purchases using bitcoins

Recently Tesla had announced that it would accept the cryptocurrency bitcoin as a payment method for the purchase of their electric vehicles. But now the company has announced that it has suspended the use of bitcoins for the sale of its electric vehicles. Let’s look at the reason why Tesla stopped accepting bitcoins as a payment for their electric vehicles.

Tesla suspends Bitcoin payments
Environmental harm through Bitcoins
The solution
FAQ

Tesla suspends Bitcoin payments

On 12 May 2021, Tesla had announced that it would stop accepting bitcoins for the purchase of its electric vehicles. This update was conveyed by the CEO of Tesla, Elon Musk just after a month when the company had announced that it would start accepting bitcoin as a payment method.

Elon Musk had shared a statement on Twitter that conveyed the message saying that the move from the company is suspending bitcoin as a payment method is due to environmental reasons. He added that as a result, the company will no longer accept bitcoins as a payment method for their cars.

The statement shared by Elon Musk reads the message which says Cryptocurrency is a good idea based on many levels and we believe that it has a great potential and future. He added that but it cannot come at a great cost for the environment.

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Environmental harm through Bitcoins

The environmental harm mentioned by the company refers to the emissions that are generated because of the use of fossil fuels for the mining of bitcoins. Tesla has conveyed that they are concerned about the increased continuous use of fossil fuels especially coal for the transaction and mining of bitcoins. Coal is considered to have the worst emission compared to any other fuel.

The underlying reason is that bitcoin mining requires a huge amount of computing prowess which is usually met by computers that are really powerful with the latest features. The increase in the popularity of bitcoins and cryptocurrencies has led to an increase in the mining of these digital coins which makes it harder for the miners and they would opt for more powerful computers.

This in turn increases the operations as well as the consumption of the energy through fossil fuels. These machines will require a lot of electricity for their running. It is noted that bitcoin mining operations around the world collectively use around 120 terawatt-hours of energy in one year. This is equal to the energy that is consumed by an entire country.

Some of the environmentalists have been informing about the environmental harm caused due to the increase in cryptocurrencies for a very long time. The situation for the environment is expected to get worse as days passed and Tesla has apparently realized this fact.

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The solution

The point which should be noted is that cryptocurrencies are considered to be bad for the environment only if it uses the electricity that is generated through fossil fuels. If the energy that is used to mine the cryptocurrencies are generated through coal it is expected to have a huge impact on the environment.

It is to be noted that if the same amount of energy can be provided or generated through solar energy, the impact on the environment will be neutralized and cryptocurrencies will no longer be a harm to the environment.

Tesla had already provided a hint about this solution in its statement. They had mentioned that the company is planning to use its USD 1.5 billion worth of bitcoins in the future only when the energy is generated through a sustainable source.

This means that if the environmental conditions are met, the company is more likely to start accepting bitcoins as a payment source in the near future.

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FAQ

Does Tesla accept Bitcoin?

Tesla CEO Elon Musk said the car company will no longer accept Bitcoin as a payment for car purchases.

How many Bitcoins does Tesla have?

Tesla holds around 38,300 Bitcoin that cost around $1.329 billion.

Why is Tesla not accepting Bitcoin?

Tesla has suspended vehicle purchases using Bitcoin due to climate change concerns, its CEO Elon Musk said in a tweet.

Conclusion

Tesla is said to be looking for another cryptocurrency that uses only 1 % of the energy used by bitcoins for transactions and operations. The new Tesla payment option for the buyers shall be the cryptocurrency if it is to double down on one.