Musk, who has alienated many in the bitcoin space over recent months with his tongue-in-cheek support of “joke” cryptocurrency dogecoin, sent the bitcoin price sharply higher on Sunday afternoon.
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“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing bitcoin transactions,” Musk posted to Twitter, replying to a Cointelegraph piece that reported Magda Wierzycka, the chief executive of South Africa financial services company Sygnia, “criticize[d] Elon Musk for [an] alleged bitcoin pump and dump.”
“This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market,” Musk said. In February this year, Tesla revealed it had bought $1.5 billion of bitcoin and continues to hold most of it on its balance sheet.
Estimates for what percentage of renewable energy is currently powering the bitcoin network are inconsistent. A recent report estimated renewably-generated electricity made up almost 40% of energy consumed by the bitcoin network, however, a previous study put the figure at just over 70%, largely due to the abundance of hydro-electric generators in Southwest China and Scandinavia—both major bitcoin mining hubs.
The bitcoin price jumped by around 5%, climbing toward $40,000 per bitcoin, following Musk’s confirmation Tesla plans to eventually resume its bitcoin support.
Bitcoin crashed from its peak of around $65,000 in April, with its sell-off exacerbated in May by Musk pulling the plug on Tesla customers using bitcoin for purchases, citing the bitcoin network’s eye-watering energy demands that have spiked in the last few months.
“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” Musk announced in May, sending shockwaves through bitcoin and cryptocurrency markets.
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In late May, Musk helped create the North America Bitcoin Mining Council, bringing together some of the region’s biggest bitcoin mining companies with the goal of increasing miners’ use of renewables.
So-called bitcoin miners are rewarded with newly minted coins for securing the bitcoin network and validating transactions, something that requires a huge amount of computer processing power—thought to be more than the whole country of Finland, according to some calculations.
“[The North American bitcoin miners] committed to publish current and planned renewable usage & to ask miners [worldwide] to do so,” Musk posted to Twitter at the time, adding he thought the development was “potentially promising.”
In the meantime, Musk has lent considerable support to dogecoin, a meme-based cryptocurrency originally created as a “joke,” calling for developers to submit upgrade ideas and agreeing that a suggestion dogecoin could be used via the ethereum blockchain is “amazing.”