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Tesla CEO Elon Musk said Wednesday the electric car maker will no longer accept bitcoin for vehicle purchases amid concerns regarding the environmental impact of cryptocurrency mining.
The process of bitcoin mining, or generating digital currency by using powerful computers to solve ultra-complex mathematical equations, consumes a huge amount of electricity. Musk, a longtime public proponent of cryptocurrencies, said the current mining process is too reliant on fossil fuels.
"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 said in a statement. "Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment."
Musk first announced that Tesla would accept bitcoin for vehicle purchases in late March. At the time, the Tesla founder said his company would hold the bitcoin rather than convert it to traditional currency.
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In February, Telsa purchased $1.5 billion worth of bitcoin in what it described as a bid to "diversify and maximize returns" on its cash. Despite its latest pledge, Musk said Tesla has no plans to sell the bitcoin it has already accumulated.
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"Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy," Musk added. "We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction."
Earlier this week, Musk asked followers if Tesla should begin to accept DogeCoin, a meme token that has surged in value in recent weeks.
Bitcoin plunged 17% on the news, dropping from around $54,819 to $45,700, its lowest since March 1, according to Reuters. It later recovered to around $50,908.
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Musk is the latest business leader to express concern about the environmental impact of cryptocurrency mining. A recent study by Cambridge University found bitcoin consumes more electricity than the entire country of Argentina.
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