Elon argue bitcoin incentivises energy

Share post!

elon argue bitcoin incentivises energy

If miners could capture just 20% of wind and solar energy that is delayed on US power grids, BCEI projects that global mining capacity could triple.

Additionally, costs for renewable energy would also see a rapid decline. This is because “bitcoin and energy markets are converging” and BCEI believes that “the energy asset owners of today will likely become the miners of tomorrow”.

However, the argument could be viewed as a justification for bitcoin’s energy consumption.

This begs the question: how much is pristine money – which has never existed in the history of mankind – worth; the answer of which could be found in the trade-off with energy consumption as the network grows.

Subscribeto the semi-weekly newsletter for regular insight into bitcoin and crypto. Go on.

I do at this point think Bitcoin is a good thing. I am a supporter of Bitcoin. I was a little slow on the uptake. I think Bitcoin is on the verge of getting broad acceptance by conventional finance people.”

He also noted that he did not have a “strong opinion” on other cryptocurrencies.

In the clubhouse chat, he said that “Occasionally I make jokes about dogecoin, but they are really just meant to be jokes. Dogecoin was made as a joke to make fun of cryptocurrencies.”

Musk doubled down on his support for Bitcoin, though.
He jokingly called Bitcoin (BTC) an anagram for The Boring Coming (TBC), and later that December, it was announced that Tesla had purchased $1.5 billion worth of the cryptocurrency.

Then, in March, he announced that Tesla would begin to accept Bitcoin for its cars.

After Tesla announced that it would no longer accept Bitcoin for its cars, the crypto community showed anger and frustration on social media. Elon Musk’s take on Bitcoin has shifted several times throughout history, and his Tweets have always been unpredictable, so this really shouldn’t be that surprising.

First Thoughts

The PayPal co-founder’s first prominent comments on Bitcoin came during a podcast in 2019 with Cathie Wood, the CEO and CIO of Ark Invest.

Don’t miss out on how smart money is playing the crypto game. Subscribe to our premium newsletter – Crypto Investor.

When asked how he felt about crypto during the podcast, he said that “Bitcoin and ethereum scammers were so rampant on Twitter that I said I’d just join in.

I said at one point, ‘do you want to buy some Bitcoin?’ and then my account got suspended.”

He also said that “I think the Bitcoin structure is quite brilliant. I’m not sure that it would be a good use of Tesla’s resources to get involved in crypto. We’re really just trying to accelerate the events of sustainable energy.
One of the downsides of crypto is that it is computationally quite energy-intensive.”

“Paper money is going away, and crypto is a far better way to transfer value than pieces of paper,” he added.

Later in the year, Musk made his first comments about Dogecoin when he wrote a tweet saying, “Dogecoin may be my favorite cryptocurrency.

Growing Support

In December of 2020, Musk posted a not-so-safe-for-work meme about the temptations of Bitcoin while trying to live a normal life.

Michael Saylor, the CEO and founder of MicroStrategy, responded by saying that Tesla would be doing shareholders a favor if it converted some of its balance sheet to Bitcoin.

“If you want to do your shareholders a $100 billion favor, convert the $TSLA balance sheet from USD to #BTC. Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor.”

In response, Musk asked, “Are such large transactions even possible?”

The crypto community was quick to inform Musk that this was entirely possible. Musk then made his Twitter bio #bitcoin and said, “In retrospect, it was inevitable.”

Later, in a Clubhouse room, Musk had very positive comments about Bitcoin.

He also points out that because Bitcoin miners can be located anywhere, they can make use of renewable energy in places that conventional energy customers couldn’t otherwise use.

“You can start up a mining operation with one hundred per cent renewable energy anywhere, really far from any grid and still be able to utilise all the energy efficiently.”

This means that poorer countries can use natural resources, like hydropower, to mine Bitcoin and make money. This was a central argument in Stone Ridge’s annual shareholder letter, which outlines the economic benefits Bitcoin will bring to the world.

On this week’s episode of CoinGeek Conversations, Zach stresses that he thinks we should measure Bitcoin’s energy consumption against the value it brings to the world.

Out of 3.92 million votes, 78 percent voted Dogecoin should become a payment option for Tesla, and 22 percent were against the idea.

This survey was one of the events that led to the announcement of bitcoin being unsuitable as payment option for Tesla vehicles, as Musk had also used SpaceX launch to promote Dogecoin three days before.

Ripple effect of Musk and Tesla decision down Bitcoin, Dogecoin

Musk is an influential figure in the cryptocurrency market, and any decision he makes usually have an impact on how crypto investors react. This was reflected in the price movement of bitcoin and Dogecoin in the early hours of Thursday.

Bitcoin price fell from $52,984 per coin to $47,720, with holders losing over $5,000, as some investors moved to protect their loss or engage in profit taking.

It’s pretty cool.”

In May 2020, JK Rowling famously said on Twitter that “People are now explaining Bitcoin to me, and honestly, it’s blah blah blah collectibles (My Little Pony?) blah blah blah computers (got one of those) blah blah blah crypto (sounds creepy) blah blah blah understand the risk (I don’t, though.)”

Musk responded to her thread, saying, “Pretty much, although massive currency issuance by govt central banks is making Bitcoin Internet money look solid by comparison.”

Musk riled up crypto-twitter again by posting a meme insinuating that Dogecoin would become the standard by which the global financial system would run.

It has since leveled to about $44,000, but many are still struggling to understand the true motive given Musk’s previous support for Bitcoin and his response to Dorsey regarding the energy question.

One prominent crypto insider and podcaster, Peter McCormack, wrote a Twitter thread about Musk’s confusing actions with crypto and likened him to a troll, to which Musk responded, “Obnoxious threads like this make me want to go all-in on Doge.”

Another Twitter account countered Musk saying that Dogecoin is far more centralized than Bitcoin. Musk retaliated by alleging that Bitcoin has centralization issues as well.

The problem with his response is that Bitcoin can’t be controlled by mining power alone as nodes and other participants also have a say in its direction. This led people to question his understanding of Bitcoin even further.

The researchers explained that the divergence between renewable energy production and electricity demand could be mitigated by creating an ecosystem “where solar/wind, batteries, and Bitcoin mining co-exist to form a green grid that runs almost exclusively on renewable energy.”

Not only is this doable, it is doable without jeopardising the sector’s profitability.

Following this line of reasoning, the authors go on to describe the bitcoin mining sector as “an energy buyer of last resort” that can be situated anywhere on the planet.

The paper asserts the geographical limitations of renewable power plans, which typically results in energy supply being “either abundant or non-existent”.

The end result is significantly more power than society typically needs for a few hours per day and not nearly enough when demand spikes.

Share post!

Leave a Reply

Your email address will not be published.