U-turn: Elon Musk says Tesla won't accept bitcoin as payment after all

Elon Musk has been a vocal backer of Bitcoin and has repeatedly put his mighty weight behind the world's most popular cryptocurrency that has seen a spectacular rise in value. So much so that Tesla even announced previously that it would accept bitcoin as a mode of payment against car purchases made by individuals. But Musk has now poured water over the plans with Tesla reversing this decision.

Musk has been in the line of fire over Tesla decision to accept bitcoin as a mode of payment. This is partially also because he is seen as a crusader for protecting environment - Tesla electric cars are touted as viable alternatives to fossil-fuel burning vehicles. But accepting bitcoin as payment for Tesla EV means that 'mining' the cryptocurrency would use up vast amounts of electricity. "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," he tweeted on Wednesday.

Bitcoin slid by as much as 10% shortly after Musk made the announcement. This is also just around two months after Tesla first opted to accept it as a form of payment.

Earlier this week, Musk had also asked his Twitter followers if Tesla ought to accept Dogecoin - another cryptocurrency - as a form of payment. (Full report here)

The use of cryptocurrency to make payments in the real world is a complex process that also has the potential of inviting tax-related troubles. The process of Bitcoin creation, or mining, is itself a complex process that involves high-end computers solving computational puzzles that is an energy-intensive process requiring electricity. It is reported that currently, mining takes up about the same energy as the whole of Netherlands did in 2019.