Tesla recently announced that it would no longer be accepting payment for their vehicles in bitcoin, and Elon Musk followed up by tweeting his concern with the energy requirements of Bitcoin mining.
These comments have caused ripple effects that have impacted the price of Bitoin, and shortly following Musk’s tweet, Bitcoin’s value against the dollar fell more than 5%. Given that Musk has been a vocal proponent of Bitcoin over the past months, and that Tesla bought $1.5 billion worth of Bitcoin earlier this year, these recent events come as something of a shock for many.
“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”
In his controversial tweet, Musk was quick to follow up with a statement saying Tesla would not be selling any of its Bitcoin, and that they intend to use it for transactions as soon as mining becomes more sustainable.
“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at a great cost to the environment”
While Tesla has not ruled out using Bitcoin in the future, Musk recently tweeted a poll which asked his followers if they would be interested in Tesla accepting Dogecoin as payment, suggesting that the tech company could start accepting cryptocurrency as payment again in the near future.
Musk received a hefty backlash following his tweet, with a number of popular figures in crypto bringing up the hypocrisy of Musk’s assertions. The Wolf of All Streets host Scott Melker commented that "Miners primarily use renewable energy." While hedge fund founder Anthony Pompliano asserted that “75% of miners use renewable energy”.
Nick Spanos, founder of Bitcoin Center in NYC, brought up the hypocrisy in Elon Musk no longer accepting Bitcoin payments, but holding on to his supply of bitcoin.
“I challenge Elon that if Bitcoin is too dirty for him to accept as payment for his electric vehicles, then it should also be too dirty to ‘hodl’ for profits based on everyone else using it.”
With one billion worth of bitcoin on the Tesla CEO’s balance sheet, the question remains why he would choose to hold on to it, if he considers it ‘dirty money’.
While Musk and Tesla have faced a strong backlash from the Bitcoin community, the fact remains that Bitcoin does require a large amount of energy. And with a large portion of Bitcoin mining coming from china, the concern remains over bitcoin being overwhelmingly supplied through coal mining.
As Tesla’s target market is environmentally-conscious consumers, it stands to reason that accepting Bitcoin as payment for vehicles was somewhat hypocritical. As a number of green coins emerge, we may still see cryptocurrency payments being rolled out driven by the support of the environmentally-conscious consumer.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.