Tesla stops accepting BitCoin, nearly entire cryptocurrency market hammered

Posted:
in General Discussion
The price of nearly every cryptocurrency has taken a nose-dive after Tesla suspended consumer purchases using BitCoin, citing environmental concerns.

Credit: AppleInsider
Credit: AppleInsider


Bitcoin dropped as much as 15% on Wednesday following the Tesla announcement, hitting a low point just above $46,000 per coin. As of writing on Thursday, the price for a single Bitcoin has recovered to $50,836.20, down 7.4%.

In a tweet on Wednesday, Tesla CEO Elon Musk said that the company is "concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel."

Tesla & Bitcoin pic.twitter.com/YSswJmVZhP

-- Elon Musk (@elonmusk)


According to a Citigroup report from April, Bitcoin mining -- the process of putting new tokens into circulation -- is consuming 66 times more electricity than it did in 2015. As Bitcoin's price skyrocketed over the years, the complexity of mining, the kind of energy and processing power required, also rose.

Alongside Bitcoin's slide, other cryptocurrencies like Ether and Dogecoin were also down. The rush to sell caused outages at some cryptocurrency exchanges on Wednesday.

The move comes a few months after Tesla said it had purchased $1.5 billion in Bitcoin and planned to accept it as payment for vehicles. Musk on Wednesday said that Tesla wasn't selling any Bitcoin and intends to start accepting it as payment again once mining becomes more sustainable.

In late April, Tesla Chief Financial Officer Zachary Kirkhorn said the company believes in Bitcoin's long-term value and planned to collect the tokens from customer purchases. Kirkhorn, in a recent Tesla regulatory filing, added the title "Master of Coin."

"Cryptocurrency is a good idea on many levels and we believe it was a promising future, this cannot come at great cost to the environment," Musk said.

The price of Bitcoin is still up about 489% year-over-year as of Thursday, May 13.

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Comments

  • Reply 1 of 39
    BeatsBeats Posts: 2,337member
    Can’t believe Dogecoin is an actual thing...
  • Reply 2 of 39
    I wouldn't be surprised if Musk and others at Tesla didn't reduce their investment in Bitcoin prior to the announcement.  I assume it would't meet the legal definition of insider trading since Bitcoin isn't a regulated market?
    watto_cobra
  • Reply 3 of 39
    lkrupplkrupp Posts: 9,146member
    So I can’t buy a $120K model X with my Dogecoin stash? 
    randominternetpersoniHywatto_cobra
  • Reply 4 of 39
    applguyapplguy Posts: 136member
    I don’t understand. Musk seems like an intelligent and knowledgeable person. It was known before Tesla bought Bitcoin the amount of energy required to mine crypto. Now to have that epiphany moment that crypto is bad for the environment. Surely Musk can add 2+2. 
    randominternetpersond_2cgWerksseanjwatto_cobra
  • Reply 5 of 39
    dysamoriadysamoria Posts: 3,306member
    applguy said:
    I don’t understand. Musk seems like an intelligent and knowledgeable person. It was known before Tesla bought Bitcoin the amount of energy required to mine crypto. Now to have that epiphany moment that crypto is bad for the environment. Surely Musk can add 2+2. 
    People need to stop putting that man on a pedestal. 
    macplusplusOferStrangeDaystmayd_2PhiltkyrezwitsxbitiHyJanNL
  • Reply 6 of 39
    DAalsethDAalseth Posts: 1,565member
    applguy said:
    I don’t understand. Musk seems like an intelligent and knowledgeable person. It was known before Tesla bought Bitcoin the amount of energy required to mine crypto. Now to have that epiphany moment that crypto is bad for the environment. Surely Musk can add 2+2. 
    /S

    There fixed it for you.
    rezwitsapplguy
  • Reply 7 of 39
    MarvinMarvin Posts: 14,478moderator
    Beats said:
    Can’t believe Dogecoin is an actual thing...
    All the coins make as much sense as each other. They are all useful as an IOU system.

    Person A wants to buy something for $50 online in a similar way to using cash. Although the transaction has a ledger, the goods/services don't have to be recorded.
    Person A gives $50 fiat to coin seller (bitcoin, dogecoin, whatever coin) and gets coins ($50 IOU).
    Person A gives the coin IOU to Person B in return for the $50 worth of goods/services.
    Person B sells coins for $50. If the person who got $50 from A is the same person who gives $50 back to B, it's just a way of making transactions like using cash online.

    The mining aspect is silly and is a flawed way to prove transactions. The idea behind it is that people who invest more into computing would be more trusted but that's been proven to not be the case where people have managed to get over 50% of the compute power and been able to double spend their coins.

    Proof of Stake crypto will take over from Proof of Work eventually. People are just investing more into Proof of Work systems because they can make more money - they are effectively generating money but it's been purposely slowed down over time to make it more stable and it increases energy usage to crazy levels as well as causes supply shortages of GPU. Proof of Stake doesn't need miners.



    The main problem with Proof of Stake is that it shows how little general use crypto would have. An IOU system is just an extra transaction to have to make and few people would bother. The interest in crypto has all been driven by people buying early coins and making 1000x returns. Someone recently sold millions in Dogecoin from a $145m wallet and there are others:

    https://www.msn.com/en-us/money/topstocks/a-2425-billion-dogecoin-whale-lurks-but-robinhood-ceo-says-e2-80-98we-don-e2-80-99t-have-significant-positions-in-any-of-the-coins-we-keep-e2-80-99/ar-BB1gqWXv

    The Winkelvoss twins are sitting on a few billion in coins. Crypto is often lauded as a currency that allows people to be free from the corrupt system of government-controlled finance but a lot of the people who made huge gains were people who were already rich and had the capital to invest. If someone who had $10m invested $100k into each of the top 10 coins, they could easily have made $100m and those people are selling the coins for fiat now that everyone has access to buying coins. It'll end up as another system of transferring money from poor people to rich people.

    Elon Musk is potentially doing this to promote Dogecoin more, it uses less energy:

    https://www.msn.com/en-us/news/technology/spacex-will-launch-a-moon-mission-funded-by-dogecoin-in-2022/ar-BB1gFKOa
    https://www.deseret.com/2021/5/10/22423052/dogecoin-environment-energy-use

    Tesla could even make their own coins if they wanted. If they made their own currency and got the value up, they could potentially make more from that than they do from their business.
    chiacg27roundaboutnowOferPDRPRTSavon b7dewmeforegoneconclusionstourqueFileMakerFeller
  • Reply 8 of 39
    Not Chia.  Remember that hard drive-heavy cryptocurrency you all reported on a month or so ago?  It’s going strong, as it’s considered more environmentally friendly that BTC or ETH.  
  • Reply 9 of 39
    Maybe Elon should have done 2 minutes of research first to understand the coin mining process...unless, like indicated in an earlier thread, this is a game to increase the value of Doge, which I'm certain it is. It's pathetic the way markets can be manipulated.
    Oferd_2PhiltkyiHyseanjwatto_cobra
  • Reply 10 of 39
    blastdoorblastdoor Posts: 2,371member

    Here is a suggestion for the Biden administration— to help ease the chip shortage, reduce energy waste, and make life harder for criminal organizations (eg, Russia), make cryptocurrency illegal in every possible way. Work with other world leaders to do the same. It’s a scourge that must be ended. 

    flyingdpwillettDogpersonmuthuk_vanalingamxbitiHyMplsPmatrix077tokyojimuseanj
  • Reply 11 of 39
    glennhglennh Posts: 40member
    Bitcoins for a Tesla? Maybe a few Tesla Shareholders sent a quiet word to Tesla’s Board Members and Legal Team along the lines of giving away products ie shareholder wealth for a made up Ponzi scheme currency that “ain’t” LEGAL and Tendered by any Government or Governmental Currency Control Agency on PLANET EARTH!

    It is only a matter of time before the first such agency or government bans “Clepto-currency”. After the pipeline ransomware attack this week, those days are closer at hand than their speculators realize. 
    muthuk_vanalingamiHywatto_cobra
  • Reply 12 of 39
    entropysentropys Posts: 2,970member
    applguy said:
    I don’t understand. Musk seems like an intelligent and knowledgeable person. It was known before Tesla bought Bitcoin the amount of energy required to mine crypto. Now to have that epiphany moment that crypto is bad for the environment. Surely Musk can add 2+2. 
    I am sure he is quite good at that, and still has his money too.
    watto_cobra
  • Reply 13 of 39
    hentaiboyhentaiboy Posts: 1,239member
    I wouldn't be surprised if Musk and others at Tesla didn't reduce their investment in Bitcoin prior to the announcement.  I assume it would't meet the legal definition of insider trading since Bitcoin isn't a regulated market?
    They sold 10% of their holdings a couple of weeks ago, after pumping it, for a quick $101M profit.
    randominternetperson
  • Reply 14 of 39
    entropysentropys Posts: 2,970member

    glennh said:
    Bitcoins for a Tesla? Maybe a few Tesla Shareholders sent a quiet word to Tesla’s Board Members and Legal Team along the lines of giving away products ie shareholder wealth for a made up Ponzi scheme currency that “ain’t” LEGAL and Tendered by any Government or Governmental Currency Control Agency on PLANET EARTH!

    It is only a matter of time before the first such agency or government bans “Clepto-currency”. After the pipeline ransomware attack this week, those days are closer at hand than their speculators realize. 
    Well, TBF, the entire point of cryptocurrency is independence from government, which increasingly regards the people’s’ individual assets as its stuff. The blockchain is its certification.  You do realise that these days a government’s money pool is only worth what the market reckons it is worth?  
    At present governments around the world are quite busy lending itselves money in a “virtuous” cycle to expand the money pool and keep the economy working. Until now this has been done without causing much inflation, but the signs are worrying the seventies beast may be rising again. It took years of difficult supply side measures to fix that beast. But I digress.
    I think you are right there are elements of a Ponzi scheme in much of the mechanisms to get into a cryptocurrency in the first place, and a lot of them may not end well. I worry that these dodgy players will end up junking the good thing about cryptocurrency, the blockchain, which has so many useful features for markets and trading in just about anything (eg paddock to plate food trading) it would be sad if the baby got tossed with the bath water. 
    Oferd_2iHycgWerks
  • Reply 15 of 39
    Cryptocurrencies, like any currency, are wide open to the vagaries around market and consumer psychology. Money only has value because we all agree that it has value. Regular money like coins, paper, cards, etc. are controlled by "trusted" financial institutions and national governments. There is a touchstone that is capable to settle everyone down, most of the time, so everything keeps on going.

    Cryptocurrencies lack that last bond with material reality. They are just agreed upon by a minority of people to have intrinsic value. The concept of blockchain is interesting, and so far has appeared to be very solid. But cryptocurrencies, despite all technological sophistication, still feels like a fallacy to most people, regardless of their educations background. I myself have a PhD in Electrical Engineering, and I don't trust cryptocurrencies as viable alternative—or substitute—to regular currency. Yet I have some colleagues that are somewhat heavily invested on them.

    The analogy with the stock market is disingenuous at best. If I own APPL stock, for example, I own a part of a company, with real products and services, tangible revenues and profitability. Cryptocurrencies are not any of those thing, being more like and end in and onto itself.

    Some years ago, and still today to some extent, you couldn't get a decent GPU because that market was swallowed whole by bitcoin mining. And for some time now we are hearing the rumbles about environment impact.

    And all that for what? Paper money has less an impact than bitcoin (even if you use low denomination notes). Conventional debit and credit operations consume an almost negligible fraction of the power needed for the same operation over a cryptocurrency. There is no gain in using cryptocurrencies. The only "problem" it solves is for criminal activities and actors, like untraceable ransoms, smuggling, drug traffic, etc. Now there is something I'd like to associate my brand with...
    d_2dewmetokyojimu
  • Reply 16 of 39
    sflocalsflocal Posts: 5,618member
    Beats said:
    Can’t believe Dogecoin is an actual thing...
    A friend of mine continously posts about buying Dogecoin and I interpret it as her trying to "pump and dump" instead of any actual investment.

    I know people that made a nice living from it.  A part of me wishes I got in early and cashed out like they did, but I just don't have the drawers to get into such a speculative and unstable market.  Can't blame those that made like a bandit, but crypto is a gambler's tool, nothing more.  I still don't understand the skyrocket valuations these cryptocurrencies (especially Dogecoin) have.  It just doesn't make sense.  It has no real intrinsic value and I can't reconcile that in my head.
    randominternetpersonmobirdd_2muthuk_vanalingamapplguy
  • Reply 17 of 39
    Not Chia.  Remember that hard drive-heavy cryptocurrency you all reported on a month or so ago?  It’s going strong, as it’s considered more environmentally friendly that BTC or ETH.  
    Except that Chia's software is pretty lame: it doesn't support resuming plots so many many hours can easily be lost, the Mac OS GUI client often just spins forever trying to connect to a wallet, and syncing a full node is very flaky.
    edited May 13
  • Reply 18 of 39
    tommikeletommikele Posts: 456member
    I wouldn't be surprised if Musk and others at Tesla didn't reduce their investment in Bitcoin prior to the announcement.  I assume it would't meet the legal definition of insider trading since Bitcoin isn't a regulated market?
    Doesn't even come close to insider trading even if it were a regulated market.
  • Reply 19 of 39
    normmnormm Posts: 636member
    sflocal said:
    I still don't understand the skyrocket valuations these cryptocurrencies (especially Dogecoin) have.  It just doesn't make sense.  It has no real intrinsic value and I can't reconcile that in my head.
    I have the same problem understanding, particularly since there are currently more than 2000 different cryptocurrencies and this number is growing exponentially -- so there isn't actually any scarcity to give them intrinsic value!  But maybe the value is that (a) there is a real demand for untraceable digital cash, mostly for illegal stuff, and (b) only a few of these currencies will achieve a large enough user base to make them useful for transactions, preserving some scarcity.

    Even then, the total value as a currency is about the size of the world illegal cash market, which is actually relatively small.  I've seen the figure  0.1% of US GDP, so about $20 billion.  This would make the total value of cryptocurrencies currently overvalued by about a factor of one hundred.
    edited May 13
  • Reply 20 of 39
    tmaytmay Posts: 5,167member
    Marvin said:
    Beats said:
    Can’t believe Dogecoin is an actual thing...
    All the coins make as much sense as each other. They are all useful as an IOU system.

    Person A wants to buy something for $50 online in a similar way to using cash. Although the transaction has a ledger, the goods/services don't have to be recorded.
    Person A gives $50 fiat to coin seller (bitcoin, dogecoin, whatever coin) and gets coins ($50 IOU).
    Person A gives the coin IOU to Person B in return for the $50 worth of goods/services.
    Person B sells coins for $50. If the person who got $50 from A is the same person who gives $50 back to B, it's just a way of making transactions like using cash online.

    The mining aspect is silly and is a flawed way to prove transactions. The idea behind it is that people who invest more into computing would be more trusted but that's been proven to not be the case where people have managed to get over 50% of the compute power and been able to double spend their coins.

    Proof of Stake crypto will take over from Proof of Work eventually. People are just investing more into Proof of Work systems because they can make more money - they are effectively generating money but it's been purposely slowed down over time to make it more stable and it increases energy usage to crazy levels as well as causes supply shortages of GPU. Proof of Stake doesn't need miners.



    The main problem with Proof of Stake is that it shows how little general use crypto would have. An IOU system is just an extra transaction to have to make and few people would bother. The interest in crypto has all been driven by people buying early coins and making 1000x returns. Someone recently sold millions in Dogecoin from a $145m wallet and there are others:

    https://www.msn.com/en-us/money/topstocks/a-2425-billion-dogecoin-whale-lurks-but-robinhood-ceo-says-e2-80-98we-don-e2-80-99t-have-significant-positions-in-any-of-the-coins-we-keep-e2-80-99/ar-BB1gqWXv

    The Winkelvoss twins are sitting on a few billion in coins. Crypto is often lauded as a currency that allows people to be free from the corrupt system of government-controlled finance but a lot of the people who made huge gains were people who were already rich and had the capital to invest. If someone who had $10m invested $100k into each of the top 10 coins, they could easily have made $100m and those people are selling the coins for fiat now that everyone has access to buying coins. It'll end up as another system of transferring money from poor people to rich people.

    Elon Musk is potentially doing this to promote Dogecoin more, it uses less energy:

    https://www.msn.com/en-us/news/technology/spacex-will-launch-a-moon-mission-funded-by-dogecoin-in-2022/ar-BB1gFKOa
    https://www.deseret.com/2021/5/10/22423052/dogecoin-environment-energy-use

    Tesla could even make their own coins if they wanted. If they made their own currency and got the value up, they could potentially make more from that than they do from their business.
    Tesla doesn't make any profits from its EV business, excepting what it makes on carbon credits sold to other automakers, so that's a pretty low bar to meet.
    stourque
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