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· Posted on
May 18, 2021

Tesla backflips on cryptocurrency

Tesla announced it would accept Bitcoin as payment in March so why has it drastically changed its decision?

What's the key learning?

  • Companies care about their environmental footprint and Tesla is no different
  • Mining Bitcoin uses significant energy that is damaging for the Earth

WHY DID TESLA CHANGE ITS MIND?

For some background Back in March, Tesla made a big hurrah about it's love of bitcoin. Back then, the company announced that it was:

  • purchasing USD $1.5 billion worth of bitcoin
  • planning to accept bitcoin as a payment method for Tesla vehicles

But after a whole lot of fanfare, Tesla has backtracked because the company is concerned about the environmental impact of bitcoin.

Tesla will only re-introduce bitcoin when bitcoin mining transitions to more sustainable energy. The price of the cryptocurrency promptly tumbled by nearly 17%.

SO, WHAT IS THE KEY LEARNING HERE?

Bitcoin is terrible for the environment as it requires a heap of computer power to process bitcoin transactions (called bitcoin mining)

In fact, bitcoin supposedly consumes more electricity than the entire country of Argentina (and its 45 million people).

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