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Tesla To Stop Accepting Bitcoin As Payment For Its Cars, Said Musk


05/21/2021


Tesla To Stop Accepting Bitcoin As Payment For Its Cars, Said Musk
After having announced allowing bitcoin to be a mode of payment for its cars a couple of months ago, the United States based electric car maker Tesla has gone back on that step as it announced it will no longer accept the crypto currency for car purchases. This was announced by the company’s Chief Executive Elon Musk who cited long standing environmental concerns.
 
The announcement was a setback for not only bitcoin, the largest crypto currency of the world, but for other crypto currencies, including ethereum.
 
There were concerns raised by environmentalists about the use of bitcoin to buy Tesla's electric vehicles as the company’s business itself is based on environmental concerns caused by cars using conventional fossil fuel. In fact Musk had built up an image for himself as an environmentalist. At the same time his role in popularization of crypto currencies by allowing bitcoin for purchasing his company’s cars was a dichotomy of sorts, according ot environmentalists. 
 
The issue of environmentalists as well as some of the investors of Tesla have criticised the use of vast amounts of electricity generated with fossil fuels for the so called of ‘mining” of bitcoin.
 
The decision to disallow the use of bitcoin for purchase of tesla cars was based on those environmental concerns – particularly the use of "coal which is argued to have the worst emissions of any fuel", Musk said.
 
"Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment," Musk tweeted.
 
In February, Tesla had announced that it had purchased bitcoin worth $1.5 billion and later said that the crypto currency would be used for payment for cars. That decision has resulted in a 20 per cent hike in the value of bitcoin.  
 
Musk had however said that the bitcoin that it had purchased would be retailed by the company as the company plans to make use of the crypto currency as and when more sustainable means of bitcoin mining emerge.
 
The process of the virtual currency involves the use of high-powered computers as users make use of them to solve complex mathematical puzzles. That is touted to be a very energy intensive process which currently is mainly powered by electricity that is generated using fossil fuels – particularly coal.
 
According to the latest available data from the University of Cambridge and the International Energy Agency, the current rate of bitcoin mining uses up almost the same amount of energy every year as was done by Netherlands in 2019.
 
"The environmental impact from mining bitcoins was one of the biggest risks for the entire crypto market," said Edward Moya, a senior market analyst at currency trading firm OANDA.
 
It was unlikely that Tesla had sold many cars, if any, using bitcoin and the turnabout in the position of the company would result in positive publicity for the company while also simplifying the payment process, said Meltem Demirors, chief strategy officer at digital asset manager CoinShares Group.
 
"Elon was getting a lot of questions and criticisms and this statement allows him to appease critics while still keeping bitcoin on his balance sheet," Demirors said.
 
(Source:www.iol.co.za)