Last month, Tesla made a $1.5 bn investment in Bitcoin in an attempt maximize their returns on cash. The move was met with criticism as it went against Tesla’s environment-friendly philosophy. According to Bank of America’s estimates, the carbon footprint left by the $1.5 bn investment is equivalent to the impact made by 1.8 million cars.
After facing criticism for his move, Tesla CEO Elon Musk made a ‘U-turn’ on the cryptocurrency. He took to his Twitter handle and wrote, “Tesla has suspended vehicle purchases using Bitcoin. 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.”
He added that Tesla won’t be selling their current stock of Bitcoin. They are planning to use the cryptocurrency as soon as their mining becomes sustainable. Concludingly, Musk said that they are also looking at other cryptocurrencies which have a lesser impact (<1% compared to Bitcoin) on the environment. As a result of this announcement, Bitcoin’s value dipped considerably and suffered a 18% reduction in value.
How does Bitcoin impact the environment?
Even though bitcoin is an online cryptocurrency, it is created using special computers with colossal processing powers. These computers use a lot of electricity that is usually generated using coal – one of the most harmful fossil fuels. It is to be noted that Bitcoin’s value has grown astronomically over the last few years. A single dollar invested in 2011 would now have a value of $49,050. W