It all began with a declaration of love in February of this year, not on Valentine’s Day, but the week before. Tesla announced that it has invested $ 1.5 billion in Bitcoin and will now accept cryptocurrency as a way to pay for its electric cars. It was a sign of confidence in the currency, which in the following weeks will reach a record high of more than $ 60,000. It was a decision that also opened up some of the barriers that exist in the financial markets, leading companies like Visa and Paypal to accept cryptocurrencies on their platforms and banks like Goldman Sachs or JP Morgan to offer investment products that take them into account.
At the time of the announcement, several critics indicated that Tesla’s decision did not fully meet the environmental and sustainable values it promoted so much through its electric cars. It appears that Tesla’s Elon Musk, CEO or Technoking, didn’t pay much attention to these reforms when the love for cryptocurrency was revealed, however, after the honeymoon phase ended, relationship problems came to the fore. Last week, in prof tweet (Obviously) musk I showed Bitcoin can no longer be used to purchase its cars, until no more sustainable ways have been found to work with the network blockchain Platform. How big is Bitcoin’s environmental impact? Let’s go to some numbers:
- Bitcoin is used 0.5% From all electricity produced worldwide, through its transactions and operations Mining. It is a consumption higher than that of Argentina with a population of 45 million.
- Spend Bitcoin transaction 707 kWh In energy, 11 times more than Ethereum (the second largest cryptocurrency) and 6,000 times more than Dogecoin (a meme that is actually the fourth digital currency with the highest capitalization).
- The Bitcoin transaction uses the same energy as $ 1 million Visa transactions and equivalent 78 thousand hours To watch non-YouTube videos.
This is because the complex Bitcoin network requires thousands or even millions of attempts to resolve an in-domain transaction blockchain And that Miners They have the reward owed (in coins). This process means that it ends up wasting a lot of electricity that, in most cases, is still produced with fossil fuels, which are harmful to the planet. Until now, Some theories It indicates the potential for Bitcoin to support investment in renewable energy. It remains to be seen.
What’s Next? Musk’s decision caused the cryptocurrency market to crash:
1) Bitcoin is down about 25% and is now worth $ 42,000 (as of the date of this newsletter)
2) Globally, the market has seen the +400 billion shed from its rally, given that many cryptocurrencies are linked to the value of Bitcoin.
It is not yet known which way the South African billionaire will go, but for now, these are some insights that can be taken from his Twitter activity.
- A Tesla You will not sell your Bitcoins, And do not accept currency in transactions until more sustainable ways are found to deal with it.
- Tesla will research what solutions other cryptocurrencies can offer, specifically the ones that manage it Spend less than 1% Of total energy spent Bitcoin.
- It’s hard to tell the joke the truth, but last week, Musk launched a poll on his account that asked his followers if Tesla should use Dogecoin as a payment method. 4 million people responded and of those,78% He said yes.
We don’t know if Musk is ready to go ahead and find new love, but Doge’s continued support, be it with Memes, whether in Sketches Humorous, Whether by bid Name Doge-1 To one of SpaceX’s rockets, he seems to be pointing at it. This is another example of the influence of a billionaire and how his words influence the direction the financial markets could take.
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