Tesla will no longer accept bitcoin says Elon Musk, citing environmental concerns

The use of bitcoin to buy Tesla's electric vehicles had highlighted a dichotomy between Musk's reputation as an environmentalist and the use of his popularity and stature as one of the world's richest people to back cryptocurrencies. Some Tesla investors, along with environmentalists, have been increasingly critical about the way bitcoin is "mined" using vast amounts of electricity generated with fossil fuels.

Musk said on Wednesday he backed that concern, especially the use of "coal, which has the worst emissions of any fuel. Tesla revealed in February it had bought $1.5 billion of bitcoin, before accepting it as payment for cars in March, driving a roughly 20% surge in the cryptocurrency. Tesla would retain its bitcoin holdings with the plan to use the cryptocurrency as soon as mining transitions to more sustainable energy sources, Musk said.

Bitcoin is created when high-powered computers compete against other machines to solve complex mathematical puzzles, an energy-intensive process that currently often relies on electricity generated with fossil fuels, particularly coal. At current rates, such bitcoin “mining” devours about the same amount of energy annually as the Netherlands did in 2019, the latest available data from the University of Cambridge and the International Energy Agency shows.

Some bitcoin proponents note that the existing financial system - with its millions of employees and computers in air-conditioned offices - uses large amounts of energy too. Musk reiterated he remained a strong believer in cryptocurrencies. He announced on Sunday that his commercial rocket company SpaceX will accept dogecoin as payment to launch a lunar mission next year - just hours after he sent the cryptocurrency spiraling downward when he called it a "a hustle" during a guest-host spot on the "Saturday Night Live" comedy sketch TV show.