Elon Musk shocked the world a few months ago by first announcing that Tesla had bought bitcoin worth $1.5 billion and then that Tesla buyers could pay for their new cars with bitcoin if that so desired. Less than two months after Musk’s announcement that Tesla will accept bitcoin payments, the CEO revealed the company had changed its mind. Tesla will no longer accept bitcoin, for the time being, citing environmental concerns. But Musk said that Tesla will continue to hold bitcoin, and it’s considering other cryptocurrencies that are more energy-efficient than bitcoin.
Musk posted the following message on Twitter on Wednesday evening, explaining Tesla’s new stance on using bitcoin for transactions.
Tesla has suspended vehicle purchases using Bitcoin. 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.
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 <1% of Bitcoin’s energy/transaction.
Energy usage trend over past few months is insane https://t.co/E6o9s87trw pic.twitter.com/bmv9wotwKe
— Elon Musk (@elonmusk) May 13, 2021
The bitcoin price tanked soon after that, taking with it the entire cryptocurrency universe. Bitcoin dumped from around $54,000 per coin to $46,000 in a matter of hours, rising over $50,000 after that. At the time of this writing, bitcoin is still highly volatile, hovering around $50,000.
— TradingView (@tradingview) May 12, 2021
Musk never explained what sort of cryptocurrencies Tesla will consider to replace bitcoin. Other digital coins require energy-consuming mining operations, including Ethereum, the world’s second most popular and second most valuable coin after bitcoin.
While Musk’s comments about the environmental side-effects of bitcoin mining have generated a debate, with some arguing that renewable energy can power crypto mining, using bitcoin to settle transactions might not be a viable solution for institutions like Tesla. Other coins offer significantly lower fees and faster settlement time than bitcoin.
It’s unclear where Tesla will go when it comes to adopting a different cryptocurrency to settle transactions, but there are solutions out there that do not involve mining.
Do you want Tesla to accept Doge?
— Elon Musk (@elonmusk) May 11, 2021
A few days ago, Musk did ask his followers on Twitter whether Tesla should accept meme-coin dogecoin as a payment option for electric cars. Musk often referenced the coin on Twitter this year, which saw a meteoric rise in the past few months. Musk’s comments have helped drive the price up. The exec even made mentions of doge during his Saturday Night Live appearance last week.
An overwhelming majority of Twitter users answered that Tesla should accept doge — that’s over 78% out of more than 3.9 million votes.
Separately, Musk’s SpaceX announced earlier this week that it’ll accept dogecoin as a form of payment for a future mission to the moon.