Bitcoin’s value on the Coinbase exchange fell sharply in the immediate aftermath of Musk’s tweet, dropping to $46,033 per Bitcoin from $54,605 in less than two hours before partially recovering to $49,075 at about 8:25 p.m. Eastern time.
“Tesla has suspended vehicle purchases using Bitcoin,” Musk stated in the tweet. “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 on many levels, and we believe it has a promising future, but this cannot come at great cost to the environment,” the tweet continued. “Tesla will not be selling any Bitcoin, and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use [less than 1 percent] of Bitcoin’s energy/transaction.”
Bitcoin “mining” is the process of assigning computers the task of performing the complex calculations necessary to maintain the blockchain ledger that makes Bitcoin possible. The incentive for miners is the potential to earn free Bitcoin, but the computing power necessary for mining requires significant amounts of electricity.
The University of Cambridge maintains data on Bitcoin mining and estimates that worldwide, miners on an annual basis use about as much energy as is consumed by the entire country of Egypt. Put another way: Cambridge scientists estimate Bitcoin mining accounts for about 0.68 percent of the world’s energy consumption.
Musk’s tweet appears to mark a major shift for the high-profile billionaire, whose affection for cryptocurrency — Tesla bought more than $1 billion of Bitcoin during the first calendar quarter of 2021, according to an April 26 Tesla filing with the Securities and Exchange Commission (SEC) — is well established.
He went so far as to share some negative thoughts about the cryptocurrency Dogecoin during a “Saturday Night Live” appearance last week.
Selected by EFXA