Recently, billionaire Elon Musk announced that Tesla would no longer accept Bitcoin as payment. This sent the value of Bitcoin plummeting having lost more than 20% over the last week. Musk claims that the reason for this decision was due to Bitcoin’s high amount of energy consumption. Musk has instead given preference to meme-currency Dogecoin whose energy consumption is just 7% of Bitcoin. It’s another episode in the saga of Elon Musk and Dogecoin.
Elon Musk is a prolific Twitter user. His tweets have gotten him in trouble with his company and regulatory bodies in the U.S. But recently, Musk has been tweeting about things beyond the control of the U.S government, cryptocurrency. His recent tweets regarding Dogecoin and Bitcoin have seen USD $300 billion wiped from the market. People are mad to say the least.
This was the result of an announcement from Tesla that the car company will no longer accept Bitcoin as payment and has also sold some of the Bitcoin it bought earlier this year. Tesla has claimed that this sale was only to test market liquidity. Now it seems likelier than ever that Tesla may sell the rest of their Bitcoin holdings possibly sending the value plummeting further.
Musk has been touting Dogecoin as the next big thing and in the process has angered many crypto supporters. The reclusive co-creator of Dogecoin, Jackson Palmer, had some words to say about Musk in a tweet that has since been deleted, “Elon Musk is and always will be a self-absorbed grifter.”
What prompted this sudden outburst from Palmer was Musk’s statement that he was working with “Doge devs to improve system transaction efficiency.”
Since this tweet it has been revealed by Decrypt that Musk has been working with Dogecoin since 2019. Ross Nicoll, one of the developers, said that Musk has “encouraged them to improve the higher transaction throughput” and provided input, advice, and further connections. The developers did, however, decline any funding from the billionaire.
Musk has gone even further by proposing a radical dogecoin upgrade that he says is “needed [for dogecoin] to become the currency of Earth.” The upgrade will address dogecoin’s scalability and security issues.
Musk when talking about the upgrade on Twitter said,
For those bad at math 👆, 100X higher transaction volume with 100X lower fees means total fees earned stay same. Low fees & high volume are needed to become currency of Earth.— Elon Musk (@elonmusk) May 16, 2021
Bitcoin have allegedly already tried this and said that things don’t quite work that way and instead created bitcoin cash, a ‘fork’ of bitcoin that is better suited to larger numbers of smaller transactions.
Chief executive of bitcoin development company Blockstream, Adam Back, said,
“The 10,000 alts tried all manner laughable physics and comp sci. There are multiple issues with larger blocks. Bitcoing has at this point the most hyper-optimised, algorithmically and hand tuned assembler fastest ECDSA (Elliptic Curve Digital Signature Algorithm) signature verification code for a reason.”
Musk responded to a thread criticising him as a troll and continued to criticise Bitcoin as being ‘highly centralised’,
The future of the crypto market certainly looks like it’s in for a rough ride this year with Musk’s huge amount of influence on the market. Many supporters of cryptocurrency have made their feelings clear that Musk’s Twitter posts risk damaging the new technology.