Tesla stops accepting BitCoin, nearly entire cryptocurrency market hammered
The price of nearly every cryptocurrency has taken a nose-dive after Tesla suspended consumer purchases using BitCoin, citing environmental concerns.
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."
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.
Stay on top of all Apple news right from your HomePod. Say, "Hey, Siri, play AppleInsider," and you'll get latest AppleInsider Podcast. Or ask your HomePod mini for "AppleInsider Daily" instead and you'll hear a fast update direct from our news team. And, if you're interested in Apple-centric home automation, say "Hey, Siri, play HomeKit Insider," and you'll be listening to our newest specialized podcast in moments.
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.
Stay on top of all Apple news right from your HomePod. Say, "Hey, Siri, play AppleInsider," and you'll get latest AppleInsider Podcast. Or ask your HomePod mini for "AppleInsider Daily" instead and you'll hear a fast update direct from our news team. And, if you're interested in Apple-centric home automation, say "Hey, Siri, play HomeKit Insider," and you'll be listening to our newest specialized podcast in moments.
Comments
There fixed it for you.
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.
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.
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?
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.
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...