Different assets, including Bitcoin, crashed overnight as investors mirrored Tesla’s decision to stop allowing the digital coin. Elon Musk stated that BTC requires a lot of energy to mine, which is not friendly to the environment. At the moment, no one knows if the company will sell its Bitcoin holdings. Also, it is not clear whether the firm had a significant number of individuals purchasing accessories and cars using the digital coin.
Tesla CEO cited that the firm will find other cryptos with favorable enviro-effects. The company will adopt a digital coin that uses PoS (Proof-of-Stake) consensus. However, BTC was not the only affected currency as other digital assets retreated following the increasing inflation data in the US.
Why is Tesla avoiding BTC?
Tesla CEO Elon Musk declared that its company no longer accepts BTC payments because of the impact that the currency has on the environment.
Bitcoin, the leading digital coin, witnessed a 5% drop in value reaching $51,847 after Musk declared the news via Twitter.
In February, Tesla invested about $1.5bn in BTC and planned to accept the coin as a payment option.
However, on Wednesday, Elon Musk tweeted about their concern on Bitcoin requiring fossil fuels to transact and mine. The executive declared that the emissions from bitcoin activities are dangerous to the environment.
In addition, the CEO said that risking the environment for the benefits that cryptocurrency has is not a good idea. How does BTC mining affect the environment?
Keep in mind that you need a computer, which depends on electricity, to deal with BTC. As more people access bitcoin via the computer, they consume more energy.
To obtain the currency, the miners solve unique and complex puzzles. However, the puzzles become more challenging as bitcoin’s value increases. Solving challenging bitcoin puzzles guzzles more computer energy. Where do you see Bitcoin after this news? Will other cryptocurrency depreciates as well?
Indeed, the crypto market is not without fascinating news to follow each day. Why do you think the Dogefather stopped bitcoin payments? Which option will the company explore next? You can share your opinion with us through the comment section.
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