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Bitcoin jumps as Elon Musk signals Tesla to start accepting the crypto when it becomes eco-friendly

Bitcoin jumps as Elon Musk signals Tesla to start accepting the crypto when it becomes eco-friendly
By Euronews and Reuters

The price of Bitcoin has jumped by 8 per cent to over $32,000 (€27,000) after Elon Musk said Tesla will most likely restart accepting the cryptocurrency once the mining rate reaches 50 per cent renewables.

The electric car maker said in May it would stop accepting Bitcoin as payment due to environmental concerns over mining the cryptocurrency.

"Most likely the answer is that Tesla would resume accepting Bitcoin," Musk, the Space X and Tesla chief executive officer, said at the B Word cryptocurrency conference on Wednesday.

"I wanted a little bit more due diligence to confirm that the percentage of renewable energy usage is most likely at or above 50 per cent and that there is a trend towards increasing that number, and if so Tesla would resume accepting Bitcoin".

Musk's dichotomy

Tesla started accepting Bitcoin for purchases in February. But 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.

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.

More digital currency miners, however, are making attempts to use renewable energy to mitigate the impact on the environment.

"Tesla's mission is accelerating the advent of sustainable energy. We can't be the company that does that and also not do appropriate diligence on the energy usage of Bitcoin," Musk said.

Musk added that he personally owned Bitcoin, Ethereum and Dogecoin, apart from Bitcoin that Tesla and SpaceX owned.

"I might pump, but I don't dump," he said.

"I definitely do not believe in getting the price high and selling ... I would like to see bitcoin succeed".

How bad is Bitcoin for the environment?

The latest figures from Bitcoinenergyconsumption.com show estimated annual emissions of over 57 million tonnes of CO2 per year, which is about the same annual carbon footprint as a small European country.

A single Bitcoin transaction is equivalent to throwing away 135 grams of equipment, which comes down to the equipment weight of an iPhone 12 mini per transaction.

Bitcoin and cryptocurrency Ethereum use a system called "proof of work". The mechanism is used to confirm transactions and add new blocks to the chain.

But the system requires a global network of computers to run at the same time when a transaction takes place. This is why it uses so much energy as it is designed to encourage increased computing effort.