Tesla will resume allowing payments by Bitcoin once at least half of the cryptocurrency is mined using renewable energy, the EV-maker’s CEO and co-founder Elon Musk said on Monday (Australia time).
The statement, made through Musk’s preferred social media channel Twitter, was made in reply to a report that financial baron and one of South Africa’s richest women, Magda Wierzycka, had accused Musk of a “pump and dump” strategy with Bitcoin.
Tesla and Bitcoin have been intricately intertwined in news reports since the Californian EV maker purchased $A2 billion – 8% of the company’s holdings – of the cryptocurrency in February and Musk then said that it would accept it as payment for its electric cars.
The value of Bitcoin subsequently surged significantly after the first announcement, topping $US60,000 ($A78,000) in April, while public commentary questioned whether buying into Bitcoin – which it has been estimated has an electricity expenditure similar to that of countries such as Argentina or Norway – was really in line with Tesla’s stated mission to accelerate sustainable energy and transport.
Only two months later Tesla then stopped accepting Bitcoin as payments, and it has reportedly sold down some 10% of its Bitcoin holdings.
On cue, the value of Bitcoin also stuttered and is now valued at around $US35,000 ($A45,000).
“What we have seen with Bitcoin is price manipulation by one very powerful and influential individual,” said cyber tech company Sygnia CEO Wierzycka according to Coin Telegraph.
Musk responded saying, “This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.”
The clean energy and transport entrepreneur apparently believes deeply in cryptocurrency’s superiority over fiat currency (which is not backed by a commodity), because it has to be “mined” using an increasingly large number of digital computations (known as ” proof of work”).
But herein lies the problem – how those computations powered, and cryptocurrency’s increasing tacit legitimacy if companies like Tesla choose to accept it.
Musk – who has been linked to a new Bitcoin Mining Council aimed at “transparency, share best practices, and educate the public on the benefits of Bitcoin and Bitcoin mining”, but apparently not given a role in it despite having been involved in initial discussions – now says that Tesla will once again accept Bitcoin:
“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.”
This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.
When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.
— Elon Musk (@elonmusk) June 13, 2021
But exactly how this will be proved is unclear, and as Renew Economy’s Ketan Joshi points out, Bitcoin is not exactly geared up to “turn down the dials on their whirring, buzzing racks of computers.”
Bridie Schmidt is lead reporter for The Driven, sister site of Renew Economy. She has been writing about electric vehicles since 2018, and has a keen interest in the role that zero-emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organiser of the Northern Rivers Electric Vehicle Forum. Bridie also owns a Tesla Model 3 and has it available for hire on evee.com.au.