Elon Musk, CEO of Tesla, made a surprise announcement on Twitter stating Tesla has suspended its customers’ vehicle purchases using Bitcoin due to concerns about the use of fossil fuel for bitcoin mining.
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk wrote on his Twitter.
Bitcoin, the world’s biggest digital currency, fell nearly 17% after the tweet since the beginning of March. Bitcoin recovered slightly in Asian trading but was off 12% $50,933 early on Thursday morning, whereas Tesla shares also dipped.
Bitcoin mining uses as much electricity annually as the entire country of Argentina, say researchers at the University of Cambridge. Musk is a strong believer in digital currencies, but Tesla also has an image of being environment friendly.
“Cryptocurrency is a good idea… but this cannot come at great cost to the environment. We are also looking at other cryptocurrencies that use <1% of bitcoin’s energy/transaction,” Musk said.
Digital currency is created when high-powered computers compete with machines to solve complex mathematical puzzles. This is an energy-intensive process that often relies on electricity generated with fossil fuel, particularly coal.
In February, Tesla revealed that it had brought 1.5 billion of bitcoin and said it would soon accept it as payment for cars.