Image: Tesla

Tesla CEO Elon Musk sent Bitcoin investors into a frenzy in March when he announced that people in the U.S. would be able to buy one of his electric vehicles with the leading cryptocurrency. Now, just a month and a half later, the billionaire has reneged on the novel payment option due to environmental concerns stemming from Bitcoin’s high energy usage during mining and transactional operations. Bitcoin prices dropped over 10 percent following the announcement.

In an SEC filing in February, Tesla revealed that it bought $1.5 billion worth of bitcoin and it may invest in more of bitcoin or other crypto currencies in the future. At that time, the company said it would start accepting bitcoin as a payment method for its products.

Sources: Elon Musk, CNBC

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13 Comments

  1. [QUOTE=”David_Schroth, post: 34254, member: 1″]
    But…. More power is used on the regular banking system but they still take USD?
    [/QUOTE]
    What, How do you figure that?

    If the same amount of transactions would happen on bitcoin as regular banking systems, bitcoin would require 10 times the power consumption of the entirety of humanity.

  2. [QUOTE=”MadMummy76, post: 34265, member: 1298″]
    What, How do you figure that?

    If the same amount of transactions would happen on bitcoin as regular banking systems, bitcoin would require 10 times the power consumption of the entirety of humanity.
    [/QUOTE]

    Well, the number of transactions that happen on the bitcoin network do not change the amount of power consumption that the network takes, so processing 1 transaction per block vs a full block (whatever the limit is today – 2mb?) uses the same exact amount of power (number of hashes at a given difficulty to solve the block is constant, regardless of transaction count), therefore I do not see how there’s truth in your assertion about requiring 10 times the power consumption of humanity as the number of transactions scale.

    Going on to the banking industry’s use of power, the top banks in the US alone have about [URL=’https://www.statista.com/statistics/250220/ranking-of-united-states-banks-by-number-of-employees-in-2012/’]1.2 million employees[/URL]. I’d imagine the global number is higher, but for those employees, they have to have office space, HVAC and all those other things that use power. Then you’ve got their datacenters with racks upon racks of servers (not unlike racks of bitcoin miners) carrying out the hundreds of different software applications. Add in banking regulators, at both the federal and state level, the payment card industry (Visa, MC, Amex, Discover, etc.). Then, those banks have vendors that also use power to provide services to them.

    I find power usage to be a strawman argument against the merits/demerits of bitcoin/crypto. There’s no shortage of worse demerits to point out about the cryptoworld and why it can’t replace the traditional banking system, but power simply isn’t one (it just riles up all the environmentalists when they are fed only some of the facts as opposed to the entire picture).

  3. [QUOTE=”David_Schroth, post: 34270, member: 1″]
    Well, the number of transactions that happen on the bitcoin network do not change the amount of power consumption that the network takes, so processing 1 transaction per block vs a full block (whatever the limit is today – 2mb?) uses the same exact amount of power (number of hashes at a given difficulty to solve the block is constant, regardless of transaction count), therefore I do not see how there’s truth in your assertion about requiring 10 times the power consumption of humanity as the number of transactions scale.
    [/QUOTE]

    Yes, within the limit the power consumptuin does not change, but in order for bitcoin to handle the same amount of transactions as regular banking does you’d need to increase the limit

    You cannot just magically do an infinite number of transactions a day without increasing processing. That is the reason bitcoin transactions are slow to go through.

    [QUOTE]
    Going on to the banking industry’s use of power, the top banks in the US alone have about [URL=’https://www.statista.com/statistics/250220/ranking-of-united-states-banks-by-number-of-employees-in-2012/’]1.2 million employees[/URL]. I’d imagine the global number is higher, but for those employees, they have to have office space, HVAC and all those other things that use power. Then you’ve got their datacenters with racks upon racks of servers (not unlike racks of bitcoin miners) carrying out the hundreds of different software applications. Add in banking regulators, at both the federal and state level, the payment card industry (Visa, MC, Amex, Discover, etc.). Then, those banks have vendors that also use power to provide services to them.
    [/QUOTE]
    Why do you imagine there would be no banks and bankers if everoyne adopted bitcoin instead of visa? Or regulation, of any kind? This is like saying vegan food is better because restaurants and chefs costs a lot of resources.

    [QUOTE]
    I find power usage to be a strawman argument against the merits/demerits of bitcoin/crypto. There’s no shortage of worse demerits to point out about the cryptoworld and why it can’t replace the traditional banking system, but power simply isn’t one (it just riles up all the environmentalists when they are fed only some of the facts as opposed to the entire picture).
    [/QUOTE]
    A strawman argument? That means misinterpreting the argument of the opposition and then debunking that. That definitely does not apply here. Sorry but if you are going to assert that the environmental argument is not valid you are going to have to demonstrate it. By showing some facts, because the only actual fact I see is that bitcoin already uses more power than a typical medium sized country in the first world, but gives back nothing of value for it. Outside of the short term gains by manipulators and miners.

  4. [QUOTE=”MadMummy76, post: 34273, member: 1298″]
    Yes, within the limit the power consumptuin does not change, but in order for bitcoin to handle the same amount of transactions as regular banking does you’d need to increase the limit

    You cannot just magically do an infinite number of transactions a day without increasing processing. That is the reason bitcoin transactions are slow to go through.
    [/QUOTE]

    A larger block size (meaning, more transactions) still does not change the power requirements of hashing a block at a given difficulty level. Only difference would be storage space required for the blockchain, but there’s also methods of pruning available to counteract that.

    [QUOTE=”MadMummy76, post: 34273, member: 1298″]
    Why do you imagine there would be no banks and bankers if everoyne adopted bitcoin instead of visa? Or regulation, of any kind? This is like saying vegan food is better because restaurants and chefs costs a lot of resources.
    [/QUOTE]

    I’m not saying that the banking industry would cease to exist, just the fact that it likely uses more power than crypto hashing does, yet, no one is bagging on them for doing so.

    [QUOTE=”MadMummy76, post: 34273, member: 1298″]
    A strawman argument? That means misinterpreting the argument of the opposition and then debunking that. That definitely does not apply here. Sorry but if you are going to assert that the environmental argument is not valid you are going to have to demonstrate it. By showing some facts, because the only actual fact I see is that bitcoin already uses more power than a typical medium sized country in the first world, but gives back nothing of value for it. Outside of the short term gains by manipulators and miners.
    [/QUOTE]

    I suppose the argument getting misinterpreted here is the fact that mining does use power to validate the blockchain. A lot of power is used to do so (also, a true statement). However, taking that and comparing it to some random first world country’s power usage without relevance other than a quantity of power is making a false claim that it’s somehow bad because that reason. Maybe there’s a better name for the argument presented, but it simply falls flat to me when people start comparing the power used to hash blocks to arbitrary things like a country’s power use. Want to improve the argument? Compare it to something comparable, like the banking industry, and see the relative value provided. Of course, it’s near impossible to calculate the actual power usage of the banking industry, so no one in their right mind will likely attempt it…

  5. So does that mean they sold their billions in Bitcoin? Did they ever buy it to begin with?

    1. Elon and his friends buy a ton of crypto, pushes it on social media to raise the price, sells it, and then tweets about crypto being bad so the market drops for him to rebuy at a lower price and then repeat the cycle.

  6. Environment concerns. Irony considering spent batteries and all. Surely the manufacturing of Tesla’s is incredibly eco friendly, but they draw the line on a non regulated currency.

    Got to have your stand on something I guess

  7. [QUOTE=”kcthebrewer, post: 34315, member: 498″]
    Elon and his friends buy a ton of crypto, pushes it on social media to raise the price, sells it, and then tweets about crypto being bad so the market drops for him to rebuy at a lower price and then repeat the cycle.
    [/QUOTE]
    We’ll see but I think you’re closer to the truth. Market manipulation has existed long before crypto and old tricks can always be adapted to new venues. Can’t say I’ve heard much mention on what happened with Tesla stock prices but here’s a glimpse.

    [ATTACH type=”full”]1049[/ATTACH]

    Big surprise, they started going up a little after declining, a couple of days after this. Granted, thats not a drastic spike nor as immediate as some things do these days but it did happen.

  8. So… if someone were to make a large taxable purchase with bitcoin.. or whatever crypto currency. And they didn’t buy it. Wouldn’t the created value of the currency be taxable? I mean they SHOULD have paid taxes on it.. but yea.

    So in essence unless you purchased the currency through an exchange you have to pay taxes on that as capital gains right? So in addition to the normal buying a Car costs and taxes add another.. what.. 15% to that?

  9. [QUOTE=”Grimlakin, post: 34365, member: 215″]
    So… if someone were to make a large taxable purchase with bitcoin.. or whatever crypto currency. And they didn’t buy it. Wouldn’t the created value of the currency be taxable?
    [/QUOTE]
    That… is a good question.

    From Investopedia (no idea if that’s a good source or not) — yes, you do have to pay capital gains on purchases – if the value you obtained the bitcoin from is less than the value you spent retail, capital gains would be due on the difference. In theory you’d get to claim losses on a dip then as well.

    Wonder if you are mining for BTC (either directly or indirectly via another currency), if you get to count your costs of equipment and operation as costs to obtain the currency. That would be tricky figuring out utilities and overhead costs… as they both are moving targets as well as your BTC gain / value. You’d need to keep very careful records.

    [SIZE=5][B]KEY TAKEAWAYS[/B][/SIZE]
    [LIST]

  10. Bitcoin has been classified as an asset similar to property by the IRS and is taxed as such.
  11. U.S. taxpayers must report Bitcoin transactions for tax purposes.
  12. Retail transactions using Bitcoin, such as purchase or sale of goods, incur capital gains tax.
  13. [/LIST]

    [URL unfurl=”true”]https://www.investopedia.com/articles/investing/040515/are-there-taxes-bitcoins.asp#:~:text=Key%20Takeaways,goods%2C%20incur%20capital%20gains%20tax[/URL].

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