📍 Las Vegas, NV, USA. on 23rd Oct 2022 at 00:00
3 mins read
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Let’s be honest: Elon Musk loves having the spotlight on him. He’s one of those people that you either love or hate. In terms of the crypto community, he’s been both a hero and a villain.
Musk has fueled a wild ride of late. First, there was the report that Tesla was buying $1.5B in BTC. Then in an about-face, they sent media shockwaves by announcing that the company will no longer be accepting payments in bitcoin.
So what’s behind all of this? Is bitcoin’s energy consumption a problem as Elon claims. Or is there something else behind all of this noise?
What Did Elon Do This Time?
It all started after his May 8th appearance on Saturday Night Live. Elon later shared on Twitter a statement on Tesla’s situation with bitcoin.
In a nutshell, he argues that bitcoin’s energy consumption and its environmental impact was the reason Tesla stopped accepting bitcoin. It also mentions the increasing use of fossil energy sources used in mining as a reason to worry.
Musk insists cryptocurrencies are a good idea as long as it’s not at the expense of the environment. That’s why he’s advocating for a cryptocurrency world that consumes less than 1% of the energy used by bitcoin.
Elon, however, didn’t allow time for people to react when he announced that he was working with DOGE developers. This triggered a wave of hatred against him.
The Bitcoin Maximalists Beef Against Musk
This one tweet put the entire crypto market in the red leading to a tsunami of responses from many prominent people in the industry. First, we had the so-called bitcoin maximalists trying to explain how BTC energy usage works.
One of the first to say something was Anthony Pompliano. Pompliano replied to Elon’s tweet inquiring as to whether he knew that 75% of miners use renewable energy. “Pomp” also said that the bitcoin energy consumption myth had been debunked many times.
Then Michael Saylor, CEO of MicroStrategy chimed in. According to Saylor, there is no incremental energy use in a bitcoin transaction. He also said that the net impact of fossil fuels over time will be negative.
After these two, we had a legion of other maximalists saying that it was market manipulation. Others claimed that energy consumption is minimal when compared to that of traditional banking. Then there were those that reminded Elon that some Tesla charging stations are powered by fossil fuels.
The Other Side of The Coin
There are two sides to every coin. And the other side is not Elon, but those who defend him.
For example, @CryptoWhale has claimed that bitcoiners would slap themselves soon when they find out Tesla had sold all their bitcoins. Likewise, he said that it would be understandable after all the hate Elon has received.
Elon’s reply was a word that made everything ten times worse. He just said: “Indeed.”
At the time of that tweet, bitcoin was at 48K. After the tweet, it dropped to 43K. Elon had received so much heat that after a couple of days he had to clarify that Tesla has not sold any of its BTCs.
In a market as sensitive as the crypto market, this type of opinion will have a gigantic impact. After all this drama, bitcoin has dropped more than 20%. So is Elon to blame for the dump? It is hard to deny that his opinion did have an impact on the market.
Does bitcoin consume a lot of energy? That is also true. Is he trying to change the impact of mining? Also true.
He and Michael Saylor spoke with a group of North American bitcoin miners on May 24. At this meeting, it was agreed that a Bitcoin Mining Council would be created. This council would be responsible for publishing a report on the current and planned use of renewable energy in mining. All of this could clarify the state of mining and the future impact of the industry on the environment.
Although it is difficult to measure the impact of Elon’s energy consumption pontification in the short term, it is potentially positive for the future of cryptocurrency.