- Elon Musk said Tesla would accept Bitcoin payments again once “mining” uses 50% renewable energy.
- Validating Bitcoin transactions requires lots of computers to use vast amounts of energy.
- Tesla started accepting Bitcoin in March, then stopped in May, citing environmental concerns.
Tesla will resume accepting bitcoin payments for its cars once miners of the cryptocurrency can show they are using roughly 50% clean energy, CEO Elon Musk said in a tweet on Sunday.
“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” he said. This is the first time Musk has detailed the conditions where the company would start accepting Bitcoin again.
Musk announced in March that Tesla would accept payment in Bitcoin, then reversed this position in May when he said the company would no longer accept Bitcoin because is was too environmentally costly to mine the cryptocurrency. He said at the time that Tesla intended to use Bitcoin again in future “as soon as mining transitions to more sustainable energy.”
Musk’s Sunday tweet caused the price of Bitcoin to jump to almost $40,000. His tweet was a response to a Cointelegraph article that contained quotes from Magda Wierzycka, the CEO of asset manager Sygnia. Wierzycka said Musk had deliberately pumped up the price of Bitcoin so Tesla could sell off a big chunk of it. Musk disputed this.
“This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market,” Musk said. He said in April that Tesla had sold 10% of its Bitcoin holdings to prove it was a viable alternative to cash.
The electric-car maker bought $1.5 billion of Bitcoin in February.
-Elon Musk (@elonmusk) June 13, 2021
Bitcoin uses a “proof of work” computing process to validate transactions on its blockchain, which requires lots of computers to use vast amounts of energy. Estimates on how much renewable energy Bitcoin miners use to power their computers vary widely, but according to Cambridge University, 65% of Bitcoin mining takes place in China, where coal is the most common type of energy production.