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Tesla will accept Bitcoin once it confirms there is 'reasonable clean energy usage' - Musk

Tesla will start taking payment for cars in Bitcoin when miners can ensure 'reasonable clean energy usage,' according to CEO Elon Musk. 

Musk tweeted on Sunday that about 50 per cent of power used by bitcoin miners needs to be from clean, renewable sources before Tesla will resume transactions. 

He announced in May that Tesla would no longer accept bitcoin for car purchases, citing long-brewing environmental concerns for a swift reversal in the company's position on the cryptocurrency. Bitcoin fell more than 10 per cent after his tweet. 

Bitcoin rose 5.1 per cent to $37,360.63 (£26,529.60) on Sunday, adding $1,817 (£1,289) in value after Musk sent his latest tweet about renewable energy usage.

Tesla will start taking payment for cars in bitcoin when miners can ensure 'reasonable clean energy usage,' according to CEO Elon Musk

Musk tweeted on Sunday that about 50 per cent of power used by bitcoin miners needs to be from clean, renewable sources before Tesla will resume transactions

THE ENVIRONMENTAL IMPACT OF BITCOIN 

Earlier this year, billionaire Microsoft co-founder Bill Gates highlighted the negative impact mining Bitcoin has on the environment.

'Bitcoin uses more electricity per transaction than any other method known to mankind,' Gates said, speaking to the The New York Times. 'It's not a great climate thing.'

The cryptocurrency is 'mined' by high-powered computers that continuously solve computational maths puzzles, the complexity of which means the processors require huge amounts of energy. 

Currently fossil fuels, through connection to national grids, are the primary source of power for many of these mining farms.  

Studies have shown that the annual carbon emissions from the electricity generated to mine and process the cryptocurrency is equal to the amount emitted by whole countries, including New Zealand and Argentina. 

There are calls, and some efforts, to switch to full renewable power generation for these facilities. 

The billionaire said that he believed cryptocurrency has a promising future, but it cannot be at great cost to the environment.

The cryptocurrency has fluctuated dramatically in response to tweets posted by Elon Musk since Tesla announced a $1.5 billion (£1.06 billion) bitcoin purchase in February.

At the time he announced they would take the currency as payment for cars, but changed his mind due to concerns over the environment impact of mining bitcoin.

This process requires high energy use and contributes to climate change unless greener, renewable energy sources as used to power the mining computers. 

'When there's confirmation of reasonable (~50 per cent) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,' Musk said.

Bitcoin rallied more than nine per cent after that message, breaking above its 20-day moving average, and it climbed a tiny bit further in Asia to hit $39,838.92 (£28,269).

'The market had been going through another round of correction over the weekend ... until Elon Musk's tweet of accepting BTC again for Tesla purchases changed sentiment,' said Bobby Ong, co-founder of crypto analytics website CoinGecko.

He said the market was also supported by software company and major bitcoin-backer MicroStrategy raising half a billion dollars to buy bitcoin.

Bitcoin is up about 33 per cent this year but has collapsed from a record peak above $60,000 (£42,000) amid a regulatory crackdown in China and Musk's apparently wavering enthusiasm for it. 

Telsa stock is down about 30 per cent since the company's bitcoin purchase.

Musk's tweet was made in response to an article based on remarks from Magda Wierzycka, head of cybersecurity firm Syngia , who in a radio interview last week accused him of 'price manipulation' and selling a 'big part' of his exposure.

'This is inaccurate,' Musk said. 'Tesla only sold ~10 per cent of holdings to confirm BTC could be liquidated easily without moving market.'

Musk had tweeted in May that Tesla 'will not be selling any bitcoin' and 'has not sold any bitcoin,' but investors are keenly awaiting Tesla's next earnings update - due next month - for any disclosure of changes to its position.

Musk has taken issue with the vast computing power required to process bitcoin transactions and in posted messages appearing to lament a breakup with bitcoin.

Other cryptocurrencies were steady after weekend gains, with Ether at $2,491 (£1,767) and one-time Musk darling Dogecoin buying about 32 US cents (23p).

Bitcoin rose 5.1 per cent to $37,360.63 (£26,529.60) on Sunday, adding $1,817 (£1,289) in value after Musk sent his latest tweet about renewable energy usage in mining

The billionaire said that he believed cryptocurrency has a promising future, but it cannot be at great cost to the environment

THE PROBLEM WITH BITCOIN 

Bitcoin emerged in the aftermath of the 2008 financial crisis.

It is unregulated, hard to trace and exists only in cyberspace in the form of a numerical code.

It can be exchanged anonymously with anyone in the world at the click of a mouse.

Police have described cryptocurrencies as one of the biggest emerging threats in organised crime. 

Former Chancellor of the Exchequer Philip Hammond backed calls for reform, warning that the world needs to 'be cautious about Bitcoin'. 

Bitcoin, the world's most popular cryptocurrency, was launched back in 2009.

Major companies already accepting Bitcoin – like Microsoft, Wikipedia and AT&T – typically use specialist payment processors that convert the cryptocurrency into traditional currency and send the sum to the company.   

Like other cryptocurrencies including Ether and Dogecoin, Bitcoin is still little used for commerce in major economies, hampered by its volatility and relatively costly and slow processing times.

Uber chief executive Dara Khosrowshahi said the ride-hailing company discussed and 'quickly dismissed' the idea of investing in Bitcoin, although he said Uber could potentially accept the cryptocurrency as payment.

While Tesla rival General Motors Co said it would evaluate whether Bitcoin could be accepted as payment for its vehicles. 

The problem with bitcoin is the energy involved in mining new coins and verifying existing value, according to billionaire Microsoft co-founder Bill Gates.

It uses more electricity per transaction than any other method or currency known to humanity due to the way it is mined by high-powered computers.

The machines continuously solve maths puzzles that require fast, expensive processors that use huge amounts of energy to run and keep cool. 

These farms are often connected to the electricity grid, and in most countries fossil fuels are the main source of energy for these national grids. 

Cryptocurrencies are generated by computers and cannot be traced - meaning that criminals and terrorists have used it to try to evade the authorities and hide their cash (stock image)

Studies have shown that the annual carbon emissions from the electricity generated to mine and process the cryptocurrency is equal to the amount emitted by whole countries, including New Zealand and Argentina. 

The main cost of sourcing new bitcoins is in the cost of electricity.

In the earliest days of bitcoin a miner could earn 50 BTC every few minutes, but the more bitcoin are uncovered, the harder it is to find them, creating a scarcity. 

Today a dedicated $2,000 (£1,419) bitcoin miner will generate about $8 (£5.68) in bitcoin revenue per day, not including the cost of electricity.

WHAT IS A BITCOIN? A LOOK AT THE DIGITAL CURRENCY

What is a Bitcoin?   

Bitcoin is what is referred to  as a 'crypto-currency.' 

It is the internet's version of money - a unique pieces of digital property that can be transferred from one person to another.

Bitcoins are generated by using an open-source computer program to solve complex math problems. This process is known as mining.  

Each Bitcoin has it's own unique fingerprint and is defined by a public address and a private key - or strings of numbers and letters that give each a specific identity.

They are also characterized by their position in a public database of all Bitcoin transactions known as the blockchain. 

The blockchain is maintained by a distributed network of computers around the world.

Because Bitcoins allow people to trade money without a third party getting involved, they have become popular with libertarians as well as technophiles, speculators — and criminals.

Where do Bitcoins come from?

People create Bitcoins through mining.

Mining is the process of solving complex math problems using computers running Bitcoin software.

These mining puzzles get increasingly harder as more Bitcoins enter circulation.

The rewards are cut in half at regular intervals due to a deliberate slowdown in the rate at which new Bitcoins enter circulation. 

Who's behind the currency?

Bitcoin was launched in 2009 by a person or group of people operating under the name Satoshi Nakamoto and then adopted by a small clutch of enthusiasts.

Nakamoto dropped off the map as Bitcoin began to attract widespread attention, but proponents say that doesn't matter: the currency obeys its own, internal logic.

Dr Craig Wright was suspected as the creator following a report by Wired last year and he has now confirmed his identity as the cryptocurrency's founder.  

What's a bitcoin worth?

Like any other currency, Bitcoins are only worth as much as you and your counterpart want them to be. 

Bitcoins are lines of computer code that are digitally signed each time they travel from one owner to the next. Physical coin used as an illustration

In its early days, boosters swapped Bitcoins back and forth for minor favours or just as a game. 

One website even gave them away for free. 

As the market matured, the value of each Bitcoin grew.

Is the currency widely used?

That's debatable.

Businesses ranging from blogging platform Wordpress to retailer Overstock have jumped on the Bitcoin bandwagon amid a flurry of media coverage, but it's not clear whether the currency has really taken off. 

On the one hand, leading Bitcoin payment processor BitPay works with more than 20,000 businesses - roughly five times more than it did last year. 

On the other, the total number of Bitcoin transactions has stayed roughly constant at between 60,000 and 70,000 per day over the same period, according to Bitcoin wallet site blockchain.info.

Is Bitcoin particularly vulnerable to counterfeiting?

The Bitcoin network works by harnessing individuals' greed for the collective good. 

A network of tech-savvy users called miners keep the system honest by pouring their computing power into a blockchain, a global running tally of every bitcoin transaction. 

The blockchain prevents rogues from spending the same bitcoin twice, and the miners are rewarded for their efforts by being gifted with the occasional Bitcoin. 

As long as miners keep the blockchain secure, counterfeiting shouldn't be an issue.

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