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).