Elon Musk and Bitcoin — a troubled love story 💔
There’s new drama in Elonland. Let’s recap the last two months of the Elon — Bitcoin love story.
- Tesla silently buys $1.5B of BTC
- Musk pumps BTC on twitter (his bio has breefly been “#Bitcoin”)
- BTC goes to the moon 🚀
- Tesla says they bought BTC and they’ll accept BTC payments
- BTC goes to the stratosphere 🚀🚀🚀
- Tesla sells some BTC to pump its quarterly earnings (aka “prove liquidity”)
- Tesla stops accepting BTC because of “environmental concerns”
- BTC crashes
What. A. Ride.
A couple of paragraphs about the environmental impact of BTC, in case you don’t know about it. Feel free to skip them if you are familiar with it.
The cool thing about BTC is that it’s a currency you can use without having to trust anyone with handling your transactions. When you wire 100€ to a friend, you trust the bank that they added a line saying “-100€” on a database with your records, and added another line saying “+100€” on your friend’s record.
With BTC, you don’t need to trust anyone. This is enabled by a system called “proof of work” — simplifying, a network of computers validate that transaction by solving a cryptographic puzzle. That puzzle is solved by a computer, which is literally burning energy to make some calculations just to prove “hey, I did work — validate this transaction”. Most cryptocurrencies work in similar ways, and a lot of them are more efficient than BTC (which was the first crypto).
I have a question:
did Elon not know about BTC’s environmental impact when he bought $1.5B of it? The guy literally sends rockets to Mars, and didn’t know the basic concepts of crypto?
Of course he did.
If you keep this in mind, you have to be really naive to not believe that all this story was a big market manipulation move.
We can argue whether that’s legal or not (spoiler: it’s not), but I’d like to focus more on how we mere mortals should behave in this world.
I think Elon Musk is one of the greatest entrepreneurs who ever lived (how can you disagree?), BUT his God-status is making too few people question his actions.
I respect the man for being a money-printing troll, but if you want to survive in today’s crazy world you need to develop some critical sense. Not everything Elon Musk does is a good idea. Everything he does works just because people assume that he’s only capable of good ideas. His twitter account is a self-fulfilling prophecies machine.
So whenever Elon tweets “Bitcoin is freaking great”, I want you to hold on, take a big breath, go study how BTC works and then evaluate for yourself whether it actually is. You should still buy some right after he tweets, but that’s another story.
Freedom can’t exist without free thinking.
In a world run by tech companies, you can’t be free if you don’t understand them and the technology they use (or don’t use, but tweet about).
Originally published at https://blog.gianlucamauro.com on May 14, 2021.
