Musk dorsey argue bitcoin incentivises

musk dorsey argue bitcoin incentivises

Tesla Stops Accepting Bitcoin

On May 12th, Musk unexpectedly posted a tweet that announced Tesla would no longer accept Bitcoin for its cars as it is “concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of all.”

This came shortly after he had agreed with Dorsey that Bitcoin could have the potential to push the use of renewables faster.

The post lit Twitter aflame with confusion, anger and frustration. It also dropped Bitcoin’s price from around $58,000 to its lowest trough since of just over $42,000.

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.

University of Cambridge, 76% of Proof-of-Work miners use renewable energies as part of their energy mix, and 39% of the total hash rate is done with renewables.

Hydroelectric power makes up 62% of the power sources for mining facilities, followed by coal at 38%, natural gas at 36% and wind at 17%.

Square, a payments company started by the founder of Twitter, Jack Dorsey, has become a growing member of the crypto ecosystem. Jack Dorsey posted a report from the company about Bitcoin’s energy use on Twitter.

The report claims that “Bitcoin mining, – in conjunction with renewable energy and storage – is especially well suited to accelerate the energy transition (to renewables).”

On April 21st Jack Dorsey sent out a tweet that linked this report and said, “Bitcoin incentivizes clean energy.”

Musk simply responded “True” to the tweet.

For a bad actor to take control of the network, they would need to make up for over 50% of Bitcoin’s computing power. With how much cumulative power exists in Bitcoin’s network today, this would be near, if not entirely, impossible.

Bitcoin’s intense use of energy for security reasons hasn’t stopped environmentalist concerns over this massive expenditure of energy. The main argument against Bitcoin is the sheer quantity of power it uses.
Bitcoin uses amounts of energy comparable to entire nations like Sweden, Argentina and others.

To counter these concerns, members of the crypto industry have researched the types of energy that Bitcoin uses rather than just focusing on the amount it uses.

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.

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.

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The cost of renewable power is plummeting and an increasing share of energy is being supplied by renewable electricity.

There are so many existing incentives that the International Energy Agency expects wind and solar to account for about 12% of electricity demand by 2030, up from 5% in 2019.

Wood says new research ideas – published in a paper by her Ark Investment Management and Dorsey’s Square Inc – “debunk the myth” that bitcoin mining is damaging the environment.

READ:Taxman has an eye on your crypto profits

On Twitter, Dorsey said bitcoin “incentivises renewable energy”. Musk responded: “True.”

But there’s still the fact that the mining devours massive amounts of power.

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.

Dorsey’s digital payment services company Square and global asset manegement firm ARK Invest have jointly released a white paper on “Bitcoin as Key to an Abundant, Clean Energy Future”.

In a tweet on Wednesday, Dorsey said: “Bitcoin incentivises renewable energy.”

Musk replied: “True,” after tweeting that starting next week,”Tesla Solar Panels and Solar Roof will only be sold as an integrated product ‘with’ Tesla Powerwall battery.

In the white paper, Square and ARK Invest said that “the energy asset owners of today can become the essential bitcoin miners of tomorrow”.

The ‘Bitcoin Clean Energy Initiative’ has developed a short research paper as a “starting point to share our vision for how bitcoin mining – in conjunction with renewable energy and storage – is especially well suited to accelerate

the energy transition”.

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.

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