Elon Musk is definitely interested in electronic currency, but it appears he does not want to understand it. At leastI fear that he does not have a deep enough understanding of both Bitcoin (BTC) and decentralized systems in general.
A decentralized system needs to be protected, and proof-of-work (PoW) is the alternative for Bitcoin to secure its electronic asset. The more successful Bitcoin isthe more energy is required for PoW to secure the network. To put it differently, why Bitcoin uses up a lot more electricity than Dogecoin (DOGE), as an example, is because BTC is much more protected than DOGE.
Related: Pros answer: How can Elon Musk affect crypto space?
The irony of Elon Musk
From a power perspective, BTC uses up more energy in Bitcoin mining. This is a result of the simple fact that Bitcoin is in a leadership position. The irony is that electricity is amorphous — amorphous in the feeling that you don’t understand where it comes from. By simply looking at a kilowatt of electricity transmitted for you, unless someone told you, you do not understand where it comes from. You need to monitor the source source, where occasionally the origin is renewable and green — like solar, wind, hydro or geothermal — but at times the energy is filthy coal, nuclear and other filthy energy materials which are out there.
The principal difficulty is that energy itself is impartial. Energy does not understand where it came from. Energy is just energy — electricity. So, the irony is the fact that with Elon Musk, the electric automobiles he sells at Tesla are powered by the same energy that is used in the coal-powered BTC mining machines. It is ironic he’s been criticizing the mining machinery for using up a great deal of energy, as the Tesla automobiles are powered with a great deal of electricity that comes from all around the world. If you get to build and sell 10 million automobiles, they are going to use a good deal of energy for a principle.
Who’s right, who’s wrong?
The way to truly eliminate dirty energy is to close down production at the origin: the power plant. This is the only way to eliminate unsustainable resources of energy. In case Bitcoin mining is essential, you may believe that Christmas lights are okay or turning on the air conditioning is okay when in reality, Christmas lights — in my opinion — are truly unnecessary. I may also argue that air conditioning is also unnecessary. On the flip side, washing machines and dryers are essential, but if you really wanted to, then you could attempt to do the laundry naturally, by hand and in the creek behind your house.
These subjective concerns about what is wrong or right, or how one uses their electricity, come down to society. Can we allow society and the older adults who live in it to choose how they would like to use electricity? Should there be some standards, rules or perhaps laws that would govern it?
If you may use washing machines or air conditioners, why can not you utilize Bitcoin mining machines? All of these appliances are wasting electricity, but these instances are designed to make our lives simpler and better.
Whether it’s that the Paris Agreement or any other significant global decree, the aim must be to eliminate dirty energy during its origin, at the plants, as stated before. To be completely fair, lots of the other businesses utilize a good deal of electricity: aluminum, steel, gold and silver mining — they take up a great deal of electricity and use a good deal of energy, whether it’s electricity or fossil fuel electricity. Ultimately, it is a matter of decision on which action is bad or good. The response here will be entirely subjective: For some, it is good to mine gold or process steel, while mining Bitcoin is environmentally damaging. Conversely, I would argue that mining Bitcoin is great, and processing gold and steel is wasting money, resources and energy. After all, it is subjective.
Why did Musk choose Dogecoin?
Elon Musk enjoys becoming famous, and he enjoys power — many people probably do. What is interesting is that with Bitcoin, he does not have influence on it, because of Bitcoin’s already powerful following. To put it differently, he couldn’t take over Bitcoin and establish the direction for it, as it is already too powerful for that.
Ether (ETH) has a very public founder, Vitalik Buterin. Binance Coin (BNB) has Changpeng Zhao, so on and so on, and they can’t be taken over because there are notable men and women within the driver’s seats, so to speak. Last, you have Dogecoin, that was made to be like a hobby project, but then the founders of Dogecoin seemed to have vanished, and DOGE was not actively maintained.
Here is an interesting theory: Elon Musk discovered about the tragedy of Dogecoin and recognized it could be something he could seize control over. (That is why I believe he did not choose any other cryptocurrencies, since they had their very own beloved founders and leaders). With such a powerful, renowned leader of Dogecoin, the cost skyrocketed. That is my idea, but generally speaking, I really don’t like centralized electronic monies. The simple fact which you can take over Dogecoin and establish the leadership single-handedly is a bad indication for Dogecoin. To me, that is not very interesting.
This article doesn’t contain investment recommendations or advice. Every single investment and trading proceed involves risk, and readers should conduct their own study when making a determination.
Lee received his bachelor’s and master’s degrees in computer science from Stanford University, and began his career in technology for a software engineer at Yahoo. Lee is also vice-chair of this board of this Bitcoin Foundation along with the brother of Litecoin founder and advocate Charlie Lee.