Just months after declaring it would start accepting payment for its cars via Bitcoin, car manufacturer Tesla has backtracked.
Concerns over the ‘environmental impact’ of the crypto currency has led the electric vehicle manufacturer to halt accepting Bitcoin payments.
Tesla boss Elon Musk tweeted the news and the value of Bitcoin fell five per cent as a result to 51,847 dollars (£36,883).
Musk tweeted yesterday: ‘We are concerned about rapid increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.
He said cryptocurrency is a ‘good idea on many levels’ but its promise cannot come at a ‘great cost to the environment’.
In February, Tesla invested $1.5bn (£1.07bn) of its own money in Bitcoin.
It is believed to have sold a large percentage of that holding already and is reported to have banked a $100m profit as a result.
Musk said Tesla will not be selling any more of the Bitcoin it owns, with the fair market value of its holdings as of March 31 said to be $2.48bn (£1.76bn), according to securities filings.
The Bitcoin purchase by Tesla, and the fact Musk simply added the hashtag #Bitcoin to his Twitter biography, pushed the price of the crypto currency to new heights earlier this year.
Earlier this week Musk polled his followers on Twitter asking whether Tesla should start accepting payments via Doge, another crypto currency that Musk has backed.
Some 78.2 per cent of the 3.9m votes that were cast said the firm should.
Car dealers in the UK are increasingly accepting Bitcoin as payment for cars.
AutoCoinCars, a firm that helps dealers accept payments in crypto currencies securely, says those that hold investments in the online coins want to be able to spend it.
Boss Luke Willmott told Car Dealer: ‘One of the biggest downsides historically with cryptocurrency is its real-world adoption.
‘Customers with cryptocurrency want to spend it and turn their digital assets into physical assets. After property, cars are the go-to items for crypto users to buy.’
Bitcoin relies on computers, which rely on electricity, to exist.
The number of computers and the energy needed to power them is rising – the growing value of bitcoin is directly tied to the amount of energy it uses.
Bitcoin miners unlock bitcoins by solving complex puzzles and, as the value of bitcoin goes up, the puzzles become increasingly more difficult and it requires more computer power to solve them.
Estimates on how much energy Bitcoin uses vary.
A 2019 study by researchers at the Technical University of Munich and the Massachusetts Institute of Technology concluded that, in late 2018, the entire Bitcoin network was responsible for up to 22.9 million tons of CO2 per year – similar to a large Western city or an entire developing country like Sri Lanka.