Tesla to do more “due diligence” before accepting Bitcoin again

Elon Musk says Tesla will accept Bitcoin for the purchase of electric vehicles again, but only after doing more “due diligence” to ensure the crypto currency was not using too many fossil fuels.

The comments were made at one of the B Word’s forums titled “Bitcoin as a Tool for Economic Empowerment” alongside Twitter CEO Jack Dorsey and ARK Invest’s Cathie Wood on Wednesday (US time).

Aside from a string of humorous tweets about Dogecoin, Musk is known supporter of crypto currencies and owns Bitcoin, Ethereum and Dogecoin personally, while both Tesla and SpaceX hold Bitcoin.

Tesla’s first foray into accepting Bitcoin as a payment for its electric vehicles was quickly reversed in May after concerns were raised about unsustainable practices where fossil-fuel sourced energy was sourced to do the energy intensive “proof of work” transactions to mine Bitcoin.

Since then, Musk has declared that Tesla would accept Bitcoin if it can show that at least half of its energy sources came from renewables, although how it would ascertain that was not clear.

Musk now says that he believes Bitcoin is using more renewables, although more work needed to be done before Tesla would begin accepting it again.

“It looks like Bitcoin is shifting a lot more towards renewables and a bunch of the heavy-duty coal plants that were unequivocally being used have been shut down, especially in China,” he said in the forum.

“We want to do a little bit more diligence to confirm that the percentage of renewable energy usage is most likely at or above 50% and that there is a trend towards increasing that number and if so Tesla will resume accepting Bitcoin.”

Wood asked Musk his thoughts on arguments that Bitcoin could be used to increase the proliferation of renewables, by utilising renewable energy rigs for mining.

Musk pointed out that intermittent resources such as solar and wind alone are not enough, in order to make any mining system (also known as a hashing rig) cost effective because they must be run 24 hours a day, 7 days a week.

“In order to operate so-called hashing rigs effectively you have to run them 24/7 which means you need baseload,” he said. “You can do that with solar and wind plus battery but if you only did it on solar overage, your (cost-effectiveness) would be much less.”