Elon Musk is ready to accept Bitcoin for Tesla cars provided that renewable energy used for mining is 50% or higher
- Tech billionaire
Elon Muskannounced that Tesla may still accept the cryptocurrency, Bitcoin, as payment.
- The underlying condition is that at least 50% of the energy being used to mine for Bitcoin has to be from renewable sources.
- According to a recent report by the Bitcoin Mining Council (BMC), the sustainable electricity mix being used for mining Bitcoin is already at 56%.
- This could mean that Tesla, once Musk is through with his ‘due diligence’, could accept Bitcoin within the year.
AdvertisementElon Musk hasn’t completely closed the doors to accepting Bitcoin as payment for buying a Tesla. His condition is that at least 50% of the energy being used to mine for cryptocurrency should come from renewable energy sources — which, according to him, it is.
“I would want to do a little bit more due diligence to confirm that the percentage of renewable energy usage is at or above 50%. And, that there is a trend towards increasing that number. If so, then Tesla will resume accepting Bitcoin,” Musk said during the ‘B Word’ conference in conversation with Twitter founder and chief executive (CEO) Jack Dorsey as well as ARK Invest CEO Cathie Wood.
According to a recent report by the Bitcoin Mining Council (BMC), the use of sustainable electricity in mining for Bitcoin stood at an average of 56% from April to June. If that figure passes Musk’s ‘due diligence’, Tesla could be accepting Bitcoin payments again very soon.
Mining in China has fallen by over 20%
Musk attributes the massive drop in the use of heavy-duty coal power plants being used to mine Bitcoin to China's ban — which also led to a fall in the price of Bitcoin, drawing the cryptocurrency’s energy usage even lower.
The Cambridge Bitcoin Electricity Consumption Index (CBECI) latest update shows that Bitcoin mining in China has been cut down by 20%. As of October 2020, China was responsible for over 67% of global mining activity. But, in April 2021, that percentage has come down to 46%.
The share of the US, however, has jumped by 10%. Contribution in Bitcoin mining by Kazakhstan, Russia and Canada has also improved.
When it comes to miners, the requirements are simple — find the cheapest energy source around. And, according to Mike Colyer, the head of Grayscale’s sister company Foundry — that is renewable energy, at least for now. He argues that the boom in green-energy creation has led to oversupply in many areas, which can be difficult to manage and costly for renewables firms.
Elon Musk’s flip-flop on Tesla accepting Bitcoin payments
Musk had initially announced that his electric vehicle (EV) manufacturing brand, Tesla, would accept payments in Bitcoin back in March. But, he reverted his stance within a couple of months, citing environmental concerns.
There was no way that you could double or triple the energy with renewable [sources]— you could shovel coal that fast. And, so, I was like this is too sketchy.
“When Tesla announced that it was acquiring Bitcoin and was doing Bitcoin transactions, there was a mass run up in the Bitcoin price. And, also an increase in the massive amount of energy used to mine Bitcoin,” explained Musk.
He clarified that the decision to suspend Bitcoin transactions ‘for now’ did not mean that either he, SpaceX, or Tesla were selling their Bitcoin holdings. The call was solely based on the fact that Musk feared Tesla’s mission, in alignment with cryptocurrencies, was accelerating the use of unsustainable energy.
For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.
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