Innocent BenjaminTesla founder and owner, Elon Musk, announced on Twitter on Wednesday that the company has suspended accepting Bitcoin as a means of payment for its electric cars due to concerns over the rising use of fossil fuels for cryptocurrency mining. Following the announcement, the firm’s stock fell more than 14 percent in two hours.
“Tesla has suspended vehicle purchases with Bitcoin. We are concerned about the rapid increase in the use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said in a message via Twitter.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
While Tesla said it would not accept bitcoin for vehicle purchases on Wednesday, Musk specified that Tesla plans to retain rather than sell the bitcoin in its cuffers, and would seek other cryptocurrencies that require less power for transactions.
“We are concerned about the rapid increase in the use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.” (Tesla)
In that sense, he maintained that cryptocurrency is “a good idea on many levels” while remarking that “we believe it has a promising future, 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 mining transitions to more sustainable energy.
“Tesla is also looking for other cryptocurrencies that use less than 1% of the transaction energy of bitcoins,” added the billionaire.
Since the start of the year, the adoption of bitcoin by Tesla, Mastercard and other large companies has taken the currency to unprecedented levels in 2021. Bitcoin was trading around $52,500 on Wednesday night, but it has recently exceeded $60,000 before retreating to its 50,000s after the update.
Bitcoin Mining Consumes Almost 5 Times As Much Electricity As the Whole of Nigeria
Attention is increasingly turning to the huge energy requirements needed to keep this currency online with crypto mining and the environmental impact of such a process.
According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), compiled by researchers at the University of Cambridge , the total energy consumed by the Bitcoin mining process (crypto mining) could reach 128 TWh (terawatt-hours) this year. This represents 0.6% of world electricity production, or over 5 times more than all production in Nigeria.
Currently, the CBECI index places the Bitcoin network in the 31st position in the world ranking of energy use, a ranking that is led by China with 6,453 TWh and the United States with 3,989 TWh.
The scientific journal, Nature, published a study last week showing that China’s bitcoin mines, which fuel nearly 80% of the global cryptocurrency trade, risk jeopardizing the country’s climate goals.
Another traducing comparison on the consumption of crypto mining is to note that the entire operation of the Google enterprise consumed 12.2 TWh in 2019, while all data centers in the world, excluding those that mine bitcoin, together consume about 200 TWh per year.
A report by Citigroup Inc. released on April 13 reported that Bitcoin consumes 66 times more electricity than in 2015 and that the carbon emissions associated with this mining will likely face increasing scrutiny.
Musk specified that Tesla plans to retain rather than sell the bitcoin it already has, and would seek other cryptocurrencies that require less energy for transactions.
It should be remembered that in a presentation by the United States SEC in February, Tesla revealed that it bought USD 1.5 billion in Bitcoin and that it could invest in more Bitcoin or other cryptocurrencies in the future, according to the CNBC portal.
At the time, the company said it would start accepting the said digital asset as a payment method for its products.
“I know I have been a bit late to this movement, but I firmly believe in Bitcoin,” Elon Musk himself explained then in an interview.
Other large companies also showed their interest in Bitcoin and incorporated payments through virtual assets as part of their financial operations. In November, PayPal opened its cryptocurrency platform to all consumers in the United States after a trial period restricted to certain investors.
Why does bitcoin consume so much energy?
The promise of a major financial return has fueled the rise of gigantic data centers dedicated to cryptocurrency.
Bitcoins are earned by people on the network called “miners”, who solve deliberately complicated equations using brute force of processing, under the so-called “proof of work” protocol.
The protocol is designed to maintain the integrity of the network, ensuring a stable supply of the coin by making calculations more difficult when there are many people mining, and easier when there are few miners working.
The system is designed so that, approximately every 10 minutes, the network grants some bitcoins to those who have successfully solved the puzzl
“Proof of work” was one of the founding principles of the this most popular cryptocurrency, created in 2008 by an anonymous person or group who wanted a decentralized digital currency.
Along those lines, proponents of Bitcoin say that the rapid development of renewables in the power plant sectors causes the currency to have a moderate effect on the environment.
But researchers at the University of New Mexico estimated in 2019, before the recent takeoff in prices, that every dollar of value created by bitcoin generated 49 cents of damage to health and the environment in the United States.
Musk also powers other cryptocurrencies – With Non-renewable Energy
The owner of Tesla also contributed to the soaring valuation of another virtual currency, Dogecoin, after a joke about it on Twitter, when he defined it as the “crypto of the people.”
More than 3 million people voted in favor of Tesla accepting the cryptocurrency meme to pay for their cars.
The owner of Tesla had asked his followers on Twitter if Tesla should accept payment in Dogecoin. Musk’s tweet came just days after he revealed that his commercial rocket company, SpaceX, will accept the meme-inspired cryptocurrency as a form of payment.
“Do you want Tesla to accept Doge?” Musk asked his 53.8 million followers on Twitter.
The businessman, who is a Dogecoin supporter, attracted 3,922,516 respondents in 24 hours from his Twitter query on whether Tesla should start accepting the Shiba Inu token.
The result?
78.2% for Yes, and 21.8% for No
Still a Niche
Unlike fiat currencies, Bitcoins are not issued by central banks, but rather managed by a computer network: Bitcoin transactions are documented in the blockchain, a decentralized database.
As a means of payment, however, Bitcoin has so far been a niche existence: First, the Bitcoin network can only process a limited number of transactions, and second, the rate fluctuates extremely. Bitcoin has gained 90 percent in value since the beginning of the year. Most recently before its plummet, a Bitcoin was traded for around $60,000 – more than the price of a fully equipped “Model 3” from Tesla in the USA.
OFONIMEH JOHNSON
James steller
Mitrobe Staff