Tesla has announced that it will no longer accept payments in Bitcoin for vehicle purchases. The main reason behind this is the environmental harm associated with cryptocurrency.
With many nations banning the use of cryptocurrency outright and others seeking to impose regulations, the future of Bitcoin looks scary. To add to this list, Tesla recently stopped accepting Bitcoins as payment for their cars.
Tesla is concerned about the environmental impact of bitcoin mining. In fact, they maintain that this clashes with Tesla’s goal to “accelerate the world’s transition to sustainable energy.”
Why Tesla Will Not Accept Bitcoin
Bitcoin mining is an intensive process that uses up a lot of resources. However, its design is meant to be intensive. Making it energy inefficient ensures that as the mining devices get better, the problems to solve become harder.
Bitcoin uses a proof of work method for validation, which is much more energy-consuming than alternatives like Proof of Stake. As a result, the entire premise of Bitcoin involves inefficiency and high resource consumption.
Tesla’s CEO Elon Musk tweeted that “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”.
Tesla confirms that they will accept BTC payments when the mining process “transitions to more sustainable energy”. Subsequently, Tesla is “looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”
The concern around the utilization of fossil fuels for mining and transactions is certainly a valid one. Elon Musk has recently indicated his preference for another crypto called Dogecoin. While Tesla has not invested, Musk has made it clear that it is “the people’s crypto” The search for alternative crypto tokens is definitely a great first step.