After canceling Bitcoin payments, Musk shows his "loyalty" to the crypto community by aligning with cryptocurrencies and forming a mining committee
After Musk's remarks that Bitcoin is "not environmentally friendly," he reiterated his preference for cryptocurrency.This article is from Deepchain, the original title is: 《From Supporting Cryptocurrency to Forming a Bitcoin Mining Council, Is Musk Showing Loyalty to the Crypto Community?》，Authors: Sergio Goschenko and Kevin Helms, compiled by: Tanker.
On May 13, Elon Musk, CEO of Tesla and SpaceX, tweeted: "Due to concerns about the environmental impact of Bitcoin, Tesla has suspended Bitcoin payments. Cryptocurrency is a great idea, and we believe it has a bright future, but it cannot come at a great environmental cost. Tesla will not sell BTC, and once its mining transitions to sustainable energy, we will resume using it for transactions. We are also considering using cryptocurrencies that consume less energy (<1% of Bitcoin's energy consumption)."
As a result, Musk's remarks became the "trigger" for the cryptocurrency market crash last week. The sensitive Bitcoin quickly reacted, and its price plummeted. As of the writing of this article, according to Coingecko data, the BTC price has fallen to $38,054.11, with a weekly decline of up to 13.0%.
Perhaps sensing the negative trend, Elon Musk began to "show loyalty" to the crypto community.
"Cryptocurrency vs. fiat currency? I stand on the side of cryptocurrency!"
As the world's richest person, Musk has become the most famous "internet celebrity" in the cryptocurrency industry. After previously stating that Bitcoin is "not environmentally friendly," he reiterated his loyalty to cryptocurrency and his preference for such emerging assets.
On May 22, in response to a tweet from a user, Musk wrote: "The real battle is actually between fiat currency and cryptocurrency. In short, I support cryptocurrency."
In fact, Musk has previously criticized the centralization issues of Bitcoin and shared an article about the influence of Chinese Bitcoin mining, which pointed out that a Bitcoin mining farm in China experienced a sharp decline in Bitcoin's overall network hash rate after suffering flood damage. In response, Musk harshly criticized:
"Bitcoin is actually highly centralized, with the vast majority of hash power controlled by a few mining (or hash power) companies."
For environmental reasons, Tesla stopped accepting Bitcoin payments in early May, but Musk believes that other cryptocurrencies can solve Bitcoin's dilemma, and his solution is—Dogecoin (DOGE), or rather, he intends to strengthen Dogecoin in the future.
Last week, there were reports that he had begun negotiations with Dogecoin protocol developers to improve the throughput of the Dogecoin blockchain and make it more efficient and decentralized than proof of work (PoW). By optimizing and improving Dogecoin, he hopes to achieve his established goal in the near future:
"Ideally, if the block size is increased tenfold, the transaction speed of Dogecoin will improve, and transaction fees will drop by 100 times, thus winning out."
Musk vs. Vitalik
In this way, Musk seems to once again prove himself as a loyal supporter of cryptocurrency—so yes, Musk is indeed a supporter of cryptocurrency, but after understanding his thought process, you may feel that he is different from other cryptocurrency supporters.
First of all, Musk is not a "stubborn" cryptocurrency supporter; rather, he is actively trying to change how cryptocurrency works to make it cleaner for the environment. Just after Musk proposed the plan to expand Dogecoin's capacity tenfold, Ethereum co-founder Vitalik Buterin published a paper on the limitations of blockchain scalability, directly targeting Musk.
Vitalik Buterin believes that a dramatic increase in blockchain scalability and throughput could lead to extreme centralization issues and undermine the fundamental properties of blockchain. He emphasized the necessity of decentralized governance, especially to eliminate the risk of single points of failure in the network, thereby enjoying protection from coordinated attacks. Without ordinary users having the freedom to run nodes, decentralization cannot be achieved.
Soon, Musk responded to this with just one sentence: "Vitalik Buterin is afraid of Dogecoin."
Forming a Bitcoin Mining Council
On May 25, Musk tweeted that he had met with several mining companies, which committed to reporting their current and planned renewable energy usage and encouraging global miners to follow suit.
It is reported that this meeting was hosted by Microstrategy CEO Michael Saylor, and the participating companies included Argo Blockchain, Blockcap, Core Scientific, Galaxy Digital, Hive Blockchain, Hut 8 Mining, Marathon, and Riot Blockchain. They are committed to forming a "Bitcoin Mining Council" aimed at achieving several major goals:
- Increase transparency in energy usage and accelerate the global sustainable development plan for Bitcoin mining.
- Standardize the disclosure of Bitcoin mining energy consumption.
- Pursue broad environmental, social, and corporate governance goals related to Bitcoin mining.
- Educate the market on how Bitcoin mining operates.
Michael Saylor expressed a very optimistic attitude about the formation of the "Bitcoin Mining Council" on Twitter, stating: "I was pleased to meet with Musk and leading Bitcoin miners in North America yesterday. The miners have agreed to form a Bitcoin Mining Council to increase transparency in energy usage and accelerate the global sustainable development plan for Bitcoin mining."
What do you think of Musk's series of actions to "show loyalty" to the crypto community after criticizing Bitcoin's environmental impact and withdrawing Bitcoin payment options, especially persuading Bitcoin miners to form a Bitcoin Mining Council to promote renewable energy usage?
