Tesla CEO Elon Musk announced that the car company would no longer accept bitcoin to purchase its vehicles on Wednesday.
Musk cited environmental concerns as the reason.
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said in a statement via his Twitter account.
The multi-billionaire added that while the cryptocurrency is a “good idea on many levels,” its promise cannot come at a “great cost to the environment.”
Shortly after, the price of Bitcoin fell about 5% to $51,847 after Musk’s and Tesla’s stock closed Wednesday down 4.4%.
Some accuse bitcoin mining of being detrimental to the environment, upping the globe’s carbon emissions. Mining is performed by high-powered computers that solve complex computational math problems. The problems cannot be solved by hand.
Bitcoin “Farmers” are basically getting paid to work as auditors. According to Investopedia, farmers verify the legitimacy of bitcoin transactions to ensure that people aren’t trying to “double-spend” bitcoin currency.
These high-powered computers use an awful lot of energy. Ars Technica recently reported a private equity firm resurrected a disused coal-fired power plant primarily to mine bitcoin.
The Iranian government also blamed a power outage on bitcoin.
Tesla’s u-turn comes three months after Tesla first announced it would begin accepting bitcoin as a payment method. At the time, Tesla also purchased $1.5 billion worth of bitcoin.
“You can now buy a Tesla with Bitcoin,” Musk tweeted. “Tesla is using only internal & open source software & operates Bitcoin nodes directly,” he noted in a follow-up tweet. “Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency.”
Following his tweet, the price of a single bitcoin rose to over $56,000.