Bitcoin was the world's first cryptocurrency, and retains the biggest market cap above all the competitors that have come since. Bitcoin's rise to prominence has been a fraught one, with critics lashing the technology for its immense energy use and the related environmental concerns. For this very reason, Tesla stopped accepting Bitcoin payments earlier this year. However, things could be about to change, with Tesla CEO Elon Musk reporting the automaker would "most likely" return to taking cryptocurrency payments, reports Reuters.
Speaking at the B Word cryptocurrency conference this week, Musk noted that the company wants to investigate the amount of renewable energy usage in the Bitcoin network before it commits to accepting the currency once more. On the issue, Musk said "I wanted a little bit more due diligence to confirm that the percentage of renewable energy usage is most likely at or above 50%, and that there is a trend towards increasing that number," noting that "most likely the answer is that Tesla would resume accepting Bitcoin."
The company had come under fire as the negative environmental impacts from Bitcoin mining contrasted poorly with the company's reputation as a force for positive change in this area. Bitcoin mining rigs use vast amounts of electricity, much of which comes from high-polluting sources such as coal and natural gas power plants. There's nothing that says cryptocurrency can't be mined using renewable energy, however, and many miners have attempted to make the switch to lower their energy bills and thus become more profitable. However, fundamentally, market pressures push many miners to simply use whatever electricity is cheapest, regardless of the environmental cost.
The Tesla CEO has also been accused of manipulating the cryptocurrency market, with his Twitter posts regularly coinciding with market shifts and his Saturday Night Live appearance doing the same. Musk himself stated "I might pump, but I don't dump," going on to say that he "[does] not believe in getting the price high and selling." One wonders what the point is in buying a commodity to hold on to indefinitely, however; there's no value to be had in Bitcoin if you never sell it, after all.
Indeed, Tesla's announcement that it would no longer accept Bitcoin led to a fast drop in the currency's value, dropping from a high of $57,939 down to $49,150 on May 12. A week later, the price had sunk to a low of $30,161, and has hung around the thirties ever since.
Opinions will be split over whether Musk is a cryptocurrency profiteer or merely a fan of what he believes is a burgeoning new technology. Whether cryptominers start using renewable energy en masse remains a vexed question for the future. If Musk remains true to his word, however, and miners do make the switch, Tesla may indeed start taking payments in Bitcoin once again.