Introduction

On the 13th of May 2021 did Elon Musk tweet that Tesla will stop accepting bitcoin as a payment method for their cars. [1] This comes just a couple of months after it became official that Tesla bought $1.5 billion worth of bitcoin and that they were planning to accept it as payment. The reason according to Elon Musk was bitcoin mining's negative impact on the environment.

Question

It's a pretty weird attitude to it all, because he should probably have known this when he bought bitcoin three months ago. If he now thinks that this is such a big problem, he should also have sold all his bitcoin, but he has recently posted and said that “Tesla has diamond hands" [2] and we should not sell. As always when powerful people speak out, never listen to what they say but look at what they do. In this case, it highlights that there are problems with the bitcoin network's high climate (CO2 footprint). 

Analysis 

I find it hard to believe that he and Tesla would not be aware of the environmental aspect when it comes to bitcoin, when they chose to make their big bitcoin purchase. Because he is an informed and smart person, so it sounds very strange to my ears.

My own analysis is that he has or believes he has a solution to it, but must first show everyone that there is a problem. I wouldn’t be surprised if he or Tesla or SolarCity (another company he owns) get into some form of "ultra clean mining". I think that within six months he will make some progress towards bitcoin mining and I think it is still strange that he continues to praise Dogecoin [3] and points out that Dogecoin will be better if you increase the number of transactions and shorten block times. [4] It makes one feel that he does not really understand what the purpose of bitcoin is, he is too focused on that it is just a currency and I think that we are very many who have come so far in our understanding that bitcoin is not primarily a transaction layer but a settlement layer. [5]