Two months after Elon Musk’s Tesla surprised crypto investors by suspending Bitcoin (BTC) payments, the billionaire Bitcoin (BTC) investor has opened the door to BTC payments once again. Musk says Tesla will once again accept bitcoin payments as long as there is evidence that at least 50% of its mining operations are powered by sustainable energy.
Elon Musk highlights a “positive trend in BTC energy consumption”.
At this week’s B-Word conference on Bitcoin, Elon Musk, along with other crypto enthusiasts said, “There appears to be a positive trend in Bitcoin’s power consumption.” He said that many of the heavy-duty coal-fired power plants, which were used primarily for mining in China, have been shut down.
Why Did Tesla Pull BTC Payments?
When Tesla said in February that it was accepting Bitcoin payments and buying $1.5 billion worth of BTC, it was taken as proof that cryptocurrencies were going mainstream. In fact, some attribute the announcement to the start of the Bull Run that led to Bitcoin’s all-time high of over $64,000 in April.
However, in May, Musk announced that he would suspend Bitcoin payments due to environmental concerns. The decision coincided with China’s crackdown on cryptocurrency exchanges and services, and cryptocurrency prices began to fall across the board.
Musk justified the decision: “Tesla’s mission is to accelerate interest in sustainable energy. We cannot be the company to do this and we cannot adequately consider the energy consumption of Bitcoin. “
He also emphasized that he, along with Tesla and SpaceX, intended to hold onto their Bitcoin. “I could pump, but I will not. Don’t throw it away.” he said.
Why Resume Bitcoin Payments?
Musk began pointing out in June that Tesla could accept bitcoin payments if there was evidence of heavy use of renewable energy. This week he took it a step further: “I think we want to do a little more due diligence to confirm that the share of renewable energy is more likely at or above 50% and that there is a trend, that number is increasing.”, He said. “If so, Tesla will accept Bitcoin again.”
Musk views hydropower, geothermal energy, and nuclear power as good options for Bitcoin mining. He stressed that he does not expect Bitcoin to be ‘pure as snow.’ As long as mining companies are making “conscious and determined efforts” to move to renewable energy, Musk says Tesla can help.
If you hear him speak, his logic seems flawed. He believes that Bitcoin miners were pushed into coal because the price rose so fast that renewable energy sources could not keep up. As the price of Bitcoin rose, so did the number of companies mining Bitcoin, and with it, their carbon footprint.
Unlike coal, it is not easy to quickly double or triple the production of renewable energy. However, if the price of Bitcoin rises again, we could find ourselves in the exact same cycle, according to Musk’s logic.
Nevertheless, the hope is that this time, mining companies will not be forced to use coal to fuel growth.