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.
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.
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.
” 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.
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.
So, how would this motivate Tesla to stop accepting payment in Bitcoin? Well, environmental regulators may not be very fond of Bitcoin’s energy use. Tesla is currently applying with the EPA for more RECs under the new Biden administration, which could have had some level of impact on Tesla’s Bitcoin decision.
The members of the Environmental Protection Agency are comprised of high-ranking individuals of both public and private organizations or companies, most of which are geared toward some level of environmental preservation and protection.
Tesla and Musk’s future with Bitcoin, or really any cryptocurrency, is still very much unknown.
The only clear facts are that Tesla still holds Bitcoin and they now accept Dogecoin for cars. With how bumpy Tesla’s crypto road has been so far, there will likely be more surprises ahead.
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.
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.
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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.
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”.
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.
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.