Elon Musk’s Bitcoin U-Turn:
Nothing But PR & Energy Politics
By Sonnet Gomes
I was so content with my current tiny investment in Cryptocurrency, especially Bitcoin, till last night. When Elon Musk’s Bitcoin U-Turn simply throws me off the edge.
Musk’s Tweet on suspending vehicle purchase using Bitcoin not only struck a boult on me but also my itty-bitty crypto asset. No wonder I was enraged to see the price dropping, and my investment is fading away.
However, it took me a while to come to my senses (thanks to my wife for a late-night Coffee) and realize what is actually going on.
Musk’s Twitter Activity from Last Night
The entire Tweet, I am sure, will amaze almost anyone. Let’s look at a few lines of it first, and then I will dive deep into them.
- “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel” (O Boy, O Boy! we had no clue about it until the Tweet!)
- “Cryptocurrency is a good idea on many levels, and we believe it has a promising future” (So Tesla and SpaceX are not dumping all its crypto assets because they are nothing but energy-guzzler carbon-emitting machines)
- “Tesla will not be selling any Bitcoin, and we intend to use it for transactions as soon as mining transitions to more sustainable energy” (He actually loves Bitcoin and keeping all the digital assets for future use. Wondering what it’s that? Well, the next Bitcoin big selling)
Did Musk Just Wake Up? Of Course Not!
Bitcoin and other cryptocurrencies are nothing but power guzzlers that produce more carbon than monetary value. Is it something new to learn about?
Certainly not! Since the mid-2010s’ we all know about it. The mining of any digital currency used to rely mostly on fossil fuels and generated a tremendous amount of CO2.
Oh, Damn
An article in Nature Communication predicted back in 2018 that the Bitcoin-related CO2 can solely push the global temperature up to 2℃ in the next three decades. The basis of the prediction was energy consumption data collected since the inception of digital currency.
If you move back a year, another study literally proposed a Crypto Carbon Credit to offset the enormous amount of CO2 emission.
Bitcoin Mining
None of those trends influenced Elon Musk’s Bitcoin U-Turn. And if I am not mistaken, Tesla purchased $1.5 billion of Bitcoin in February 2021
Now let’s take a look at a transactional scenario of carbon emission due to Bitcoin mining. Between 2016 and 2018, the entire digital currency mining operation produced around 13 million tons of CO2. To generate $1 worth, Bitcoin consumed 240% more power than Gold and 143% than Platinum in 2018.
According to Digiconomist, a single Bitcoin generates 532.35 kg CO2, consumes 1120.74kWh of electricity, and produces 110.9 grams of electronic waste. We all knew about it, and the numbers are getting big.
Then why do you think Musk wakes up one fine morning and decides to say bad things about the Bitcoins. Well, the answer is hidden in China. I promise I will get onto it, but there is something I want to share before.
Is Elon Waiting for a Greener Bitcoin. Heck no!
Here comes the Great PR campaign of the Tesla boss. He already accepted the prospect of Bitcoin and keeping all his coins in the safe for the future. But there is a catch.
He wants it to be greener, aka eco-friendly.
According to leading Bitcoin Bulls like Anthony Pompliano, 75% of the miners use renewable energy to minimize the cost and enhance their profit. And above all, less than 3-million Bitcoin is left to mine. So, both the mining race and energy-guzzling will soon end anyway.
Why The Tesla Reversal?
You must be wondering why Tesla reversed its course of action about Bitcoin purchase. The process may not be super-green, but after reaching the threshold, the power devouring will end.
There are two possible answers. Tesla may be moving towards the mining business by introducing “mining transitions to more sustainable energy.” Don’t lose your mind if pretty soon you see a tweet from the SpaceX boss that they have established a mining rig in the middle of nowhere in the Arizona desert or the backside of the moon.
This step has a direct connection with the China issue. And I promise you again that I will move there right now. Before switching there, let me tell you the second answer.
Tesla will switch its interest to a much low-profile low-priced cryptocurrency (I guess Dogecoin). And a Tweet saying Tesla is buying billions of Dogecoin will create another cryptocurrency Black Friday.
Without doing anything, Tesla can leverage billions from that shopping frenzy.
It’s Time to Take the Control from China
I know I kept you waiting, but I promise those Chinese connections will be interesting to you.
More than 75% of the Bitcoin blockchain operation is housed in China. It means Jinping’s miners (digital, of course) have almost all the hashing power to control the entire digital currency system.
Do you think it is comfortable for either Musk or the USA? It’s not. So, it’s time to breach the Chinese power and bring it back to the western world.
A recent study predicted that 5.4% of Chinese electricity would go to Bitcoin mining by 2024. The amount number will be staggering 296.6 Twh. And this exceeds the total energy consumption of Italy and Saudi Arabia in 2016. The CO2 emission due to hashing will reach 130 million tons per year. Both Qatar and the Chez Republic could not exceed the number in 2016.
Do you get what I am trying to say here?
World leaders cannot let this happen, and they need something big to use as a paperweight to push China to reduce carbon emission. What can be more weighty than a nearly 1-trillion dollar industry?
It’s all about Business and Global Politics
When you expand your business worldwide (even on Mars), getting a hold of the cash flow and global politics matters. And Musk is doing just that.
I think Elon Musk, now wanting an immaculate digital currency, is simply the appetizer before the entrees.
https://www.calamitypolitics.com/2019/01/08/emergence-digital-currency/
