Tesla co-founder Elon Musk
Tesla co-founder Elon Musk
File Photo - AFP

Elon Musk is back tweeting about cryptocurrency and a tweet from him send Bitcoin, the world's biggest digital currency, crashing over 7% . It was trading at $52,669.

On Thursday, Musk told his followers on Twitter that Tesla had stopped accepting bitcoin to purchase its vehicles due to climate concerns.

Musk said Tesla was looking at other cryptocurrencies that use 1 percent of Bicoin's energy/transition. Tesla will not be selling any Bitcoin and intended to use it for transactions as soon as mining transition to more sustainable energy, he tweeted.

This is contradictory to what Tesla said a few months ago. In February, Tesla had revealed it had bought Bitcoin worth $1.5 billion. It had said it 'would soon' accept it as a form of payment for cars. That statement had sent Bitcoin shooting higher, sparking heavy trading in cryptocurrencies and caused exchanges like Coinbase, Gemini, Binance to experience technical issues.

Climate concerns

Although Bitcoin is a virtual currency, the energy consumption associated with its use is very real. For a Bitcoin transfer to be executed and validated, a mathematical puzzle must be solved by an arbitrary computer in the global Bitcoin network. The network, which anyone can join, rewards the puzzle solvers in Bitcoin.

The computing capacity used in this process -- known as Bitcoin mining -- has increased rapidly in recent years. Statistics show that it quadrupled in 2018 alone. Researchers began by calculating the power consumption of the network. This depends primarily on the hardware, PTI said.

The use of Bitcoin leads to about 22 megatonnes in CO2 emissions annually, comparable to the total emissions of cities such as Hamburg or Las Vegas, according to a detailed analysis to date of the cryptocurrency's carbon footprint.

Researchers at the Technical University of Munich (TUM) in Germany analysed such data as the IPO filings of hardware manufacturers and the IP addresses of Bitcoin "miners."

'Dogecoin could be future of crptocurrency'

Dogecoin, created as a joke by its creators in 2013 based on the Shiba Inu dog that was a popular Internet meme then, has now kindled renewed interest after Tesla CEO Elon Musk tweeted a TMZ video about it and said it could be the future of cyptocurrency.

In a recent interview to TMZ, the SpaceX Boss and Dogecoin enthusiast said: “There is a good chance that crypto is the future currency of the world. Then the question is which one could that be. It could be multiple," he said.

On 11 May, Musk put out a question to his followers asking them if they wanted Tesla to use Doge to buy Tesla.

Referring to the origins of Dogecoin which was invented as a joke, Musk said:. “Dogecoin was created to make fun of cryptocurrency. Fate loves ironies. The currency that was invented as a joke becomes the real currency,” Musk said.

However, Musk cautions buyers not to invest their life savings into cryptocurrency. "That is unwise. If you want to speculate and have some fun, there is good chance that crypto is the future currency," he said.

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