QQ music technology news on May 18 news, in recent months, Tesla CEO Elon Musk frequently released seemingly contradictory tweets related to bitcoin, which caused the price of this cryptocurrency to fluctuate dramatically. Analysts believe that Musk’s move is intended to support bitcoin price stability as long as possible until Tesla completes the clearance.
Bitcoin fell nearly 8% in the blink of an eye on Sunday, local time, and even more on Monday, thanks to musk. Since Tesla announced the purchase of $1.5 billion worth of cryptocurrency on February 8, the price of bitcoin has been rising and falling simultaneously with the tweet released by musk.
When Tesla said it would begin to accept bitcoin payments for cars, the price of the cryptocurrency rose. Then, when musk announced that he would suspend bitcoin trading, its price fell again, which prompted the bitcoin price to fall by about $10000, or nearly 20%, within 12 hours.
On Sunday, when musk talked with well-known bitcoin bulls on social media, it seemed that the price of bitcoin fell again after suggesting that Tesla might or had sold its bitcoin. Then, when he issued a “clarification of speculation” late Sunday saying that Tesla did not sell any bitcoin, the price of bitcoin rose, though not enough to make up for the loss.
In the words of global data analyst danyaal Rashid, does the bitcoin community feel that musk “has too much influence on prices”? There are concerns that such price fluctuations will damage the reputation of bitcoin and other encryption assets. “People may lose confidence in these cryptocurrencies, because one of Musk’s tweets can confuse prices and dispel any idea that there are any real fundamentals at work,” Rashid wrote
Despite this fact, it should not be ignored that Musk on Wednesday overturned his decision to accept bitcoin to buy Tesla cars, linking his decision to a short board of bitcoin. After all, bitcoin’s computers consume a lot of energy, most of which comes from fossil fuels.
In the statement, musk mentioned that “the use of fossil fuels in bitcoin mining and trading has increased rapidly”, which is obviously inconsistent with his claim that Tesla is fighting against fossil fuel driven climate change. It should be pointed out that if he is really worried about the environmental impact of bitcoin, it seems too late, especially when he implies that he has just understood the nature of bitcoin, because this issue has been known and widely discussed at least a few years ago.
Now let’s take a look at this question. Can musk help? In theory, bitcoin is produced by solving the increasingly profound computer puzzles, and it needs to increase the computing power to solve them. This process is called mining. Successful miners will get 21 million bitcoins. At present, about 18.7 million bitcoins have been mined. Therefore, the enthusiasm caused by mining the last batch of bitcoins is increasing.
People often compare the energy consumption of running mining computers with the energy consumption of the whole country, but environmentalists worry about not only the consumption level, but also the source of energy. It is estimated that 65% of all bitcoin mining takes place in China, and about 86% of energy consumption comes from non renewable energy, of which 58% comes from coal, 20% from oil, and 8% from natural gas. Overall, carbon dioxide from bitcoin mining could raise global temperatures by two degrees Celsius in 30 years, according to Sierra Club. This will have a devastating impact on the environment, leading to widespread extinction, forest destruction and the collapse of marine ecosystems.
Announcing Tesla’s decision not to accept bitcoin payments, musk said it would resume operations once mining shifted to more sustainable energy. But obviously, the process is still quite long. To this end, musk said he was looking for other cryptocurrencies that consume less than 100 times bitcoin’s energy.
This may be a more reasonable target, because the energy consumption of bitcoin per transaction is 707 kwh, which is more than 10 times that of the second largest cryptocurrency, Ethernet, which consumes 62.56 kwh. Other cryptocurrencies consume less power, including Cardano, dogcoin and XRP. In fact, Musk’s tweet may be a covert promotion of dogcoin.
However, it is also an arduous task to get the cryptocurrency market out of the dependence on bitcoin. In the expanding field of cryptocurrency, bitcoin is still the undisputed king. Even in the case of devaluation, its market value is close to $794 billion, which easily exceeds the market value of ether (367 billion), Cardano (64 billion), dog (61.6 billion) and XRP (52 billion), while the lesser known cryptocurrencies such as chainlink, Stella and Tron lag far behind.
Of course, all of these values are largely speculative, because, unlike government backed fiat money, cryptocurrencies do not even represent theoretically valuable assets. Their value is only the price that bidders are willing to pay, and there is no price floor.
To be sure, over time, anyone holding bitcoin and other such assets has made a windfall, as the price of bitcoin has risen about 343% since last year, when it traded at $9724. On the other hand, holding bitcoin requires perseverance, because its price also plummeted last year: at current prices, the value of bitcoin is one-third lower than a month ago, when it traded at $63347.
Why musk is so interested in bitcoin, dogcoin or any other cryptocurrency remains a mystery. Even when Tesla said it would accept bitcoin payments, it did not make such transactions particularly easy. Customers have to pay within 30 minutes of the deal, or the bitcoin price will change and they will have to start over. Tesla warned that if a customer makes a mistake, such as entering the wrong recipient code into a bitcoin account, and Tesla never receives the money, it’s the customer’s own problem.
This is because bitcoin transactions are designed to be irreversible for whatever reason. It’s not clear how many Tesla bought bitcoin cars, and several people tweeted that they did, but Tesla has yet to confirm the reports.
As for Tesla’s $1.5 billion bitcoin reserve, it never made much sense from the company’s income statement. When Tesla disclosed the investment in February, it said its bitcoin would be recorded as an “indefinite intangible asset”. According to the accounting rules, the value of these assets must be assessed quarterly, and Tesla will have to report losses when its bitcoin value falls below the purchase price. But Tesla is not allowed to recognize revenue, even if the price rises, unless it sells bitcoin.
Obviously, this leads to the accounting imbalance of bitcoin and even losses. If bitcoin goes up, Tesla can sell bitcoin at any time and recognize the proceeds. However, considering that Musk’s speculation on selling bitcoin has led to a drop in the price of bitcoin, his post on Twitter has led him into a potential conflict of interest, because he can effectively manipulate the price of bitcoin through his own comments (whether positive or negative).
When Tesla announced the acquisition of bitcoin, some analysts warned that the company’s investment is very risky for bitcoin holders, and bitcoin fans had better pray that Musk’s interest in cryptocurrency will not soon cool down. So what is Musk’s ultimate goal? His goal may be to weaken interest in bitcoin by emphasizing its environmental impact. Perhaps he’s published contradictory tweets in the past few days to support the price stability of bitcoin so that Tesla can clear its position（ Tencent technology reviser / Jinlu)