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.

File photo - Representations of virtual currency Bitcoin are placed on US Dollar banknotes. (REUTERS)
File photo - Representations of virtual currency Bitcoin are placed on US Dollar banknotes.

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.

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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.

First Published Date: 13 May 2021, 08:46 AM IST
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