His tweet triggered a cascade of events which ultimately cause the price to fall. And the debate is we wouldn’t wonder if that wasn’t an inside job to gather more bitcoins at all.
On May 13, 2021 Elon Musk Tweeted from his official Twitter handle that read:
Tesla has suspended vehicle purchases using Bitcoin. 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. Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the
environment. Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as
mining transitions to more sustainable energy. We are also looking at other cryptocurrencies
that use <1% of Bitcoin’s energy/transaction.”
The tweet unleashed a debate on Bitcoin energy consumptions and some crypto enthusiastic even compared the energy consumed by Tesla to charge batteries. Trading view in their tweeted the bitcoin chart showing the damage.
Surprisingly, Treasury Secretary Janet Yellen has the same narrative as Elon Musk but it was bought by the crypto traders as much as Elon Musk’s time.
“I don’t think that bitcoin … is widely used as a transaction mechanism. To the extent it is used I fear it’s often for illicit finance. It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”
To understand rising energy usage for bitcoin, it’s important to understand the ‘Network Difficulty’ to mine bitcoins. Network Difficulty is a measure of the computational effort it takes to mine the cryptocurrency — has been going “up and up” over the last three years. More and more electricity is being used, That means that the network difficulty will also be going up (and) more miners are coming in because the hash rate’s going up.
Anthony Pompliano, Pomp Investments Founder, in an interview reacting to the energy level said that Musk is holding billions of dollars of bitcoin and he is not selling it. As far as energy consumption is concerned, more than 75% of miners use reusable energy to mine bitcoin.