These past few months, Elon Musk has been heralded as the unofficial spokesperson of cryptocurrency. But last week, several tweets caused a big divide in the crypto community. With some example tweets, we try to paint the picture of the heated arguments, the inevitable backlash and the discussions that followed.
Where to begin?
Besides Tesla and SpaceX, Elon is also known for his online persona and his interest in cryptocurrency. With the memes that he shares and his title of ‘Dogefather’, it’s sometimes hard to distinguish what’s satire and what’s not. Musk’s announcement (to his 54 million followers) of Tesla accepting Bitcoin as a way of payment, caused quite a surge of the BTC price. But his recent interest in Dogecoin and criticism of Bitcoin, caused some well known BTC experts to retort. It all started with Elon’s statement on Bitcoin and its energy consumption, retracting his previous decision of accepting BTC payments two weeks later.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP— Elon Musk (@elonmusk) May 12, 2021
This quickly prompted replies from Michael Saylor (founder and CEO of Microstrategy) and Anthony Pompliano (early investor and blockchain specialist). Musk’s fanbase, quickly criticized these two, which resulted in a week long debate.
Ironic because no incremental energy is used in a #bitcoin transaction. The energy is used to secure the crypto-asset network, and the net impact on fossil fuel consumption over time will be negative, all things considered.— Michael Saylor (@michael_saylor) May 12, 2021
Elon ... you realize that 75% of miners use renewable energy, right?— Pomp 🌪 (@APompliano) May 12, 2021
This energy story has been debunked over and over again.
In the days that followed, Musk tweeted that he has been working with the Doge developers to improve its transaction efficiency. In addition, he tweeted about an ideal Doge blockchain where block times and block sizes where increased tenfold. Which is a bit weird, due to DOGE also being a Proof-of-Work blockchain and therefore having the same drawbacks in terms of energy consumption. It didn’t take long for the Bitcoin experts to point out the flaws in Musk’s design, causing him to retort. One of these experts was Adam Back, an English cryptographer who was at the forefront when Bitcoin was invented.
Ideally, Doge speeds up block time 10X, increases block size 10X & drops fee 100X. Then it wins hands down.— Elon Musk (@elonmusk) May 16, 2021
Doge is years unmaintained, a literal joke copy of outdated version of bitcoin with long known vulnerabilities. Factually #Bitcoin doesn't consume incremental power per transaction. And has layer2s like lightning and @Liquid_BTC which amplify capabilities. https://t.co/yxJgQyXAMc— Adam Back (@adam3us) May 13, 2021
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
It seemed that all these opinions and discussions were starting to piss Elon off, resulting in him simply posting emoji’s as a reaction. On the 16th of May, Michael Saylor posted a video addressing Bitcoin’s energy consumption. Elon’s response? Saylor Moon, a reference to an old Japanese cartoon that was popular in the 90’s and of course a jab at Saylor’s name. This, somewhat childish, reaction caused a rift between the pro Bitcoiners and Elon’s massive 54 million audience.
Saylor Moon— Elon Musk (@elonmusk) May 16, 2021
He should wear outfit for Halloween, but with “Bitcoin” tattooed high on thighs— Elon Musk (@elonmusk) May 16, 2021
The divide made Elon even more agitated and he started commenting on other people’s posts. Peter McCormack, Bitcoin maximalist and podcast host of What Bitcoin Did, started a tread where he addressed DOGE’s and Bitcoin’s decentralization issues. In a pretty long twitter thread Peter explained his vision, resulting in Musk’s comment, doubting his expertise by calling all criticizers ‘experts’. Things turned rather ugly, rather quick.
Obnoxious threads like this make me want to go all in on Doge— Elon Musk (@elonmusk) May 16, 2021
Bitcoin is actually highly centralized, with supermajority controlled by handful of big mining (aka hashing) companies.— Elon Musk (@elonmusk) May 16, 2021
A single coal mine in Xinjiang flooded, almost killing miners, and Bitcoin hash rate dropped 35%. Sound “decentralized” to you?https://t.co/Oom8yzGRNQ
Musk didn’t tweet for a few days, but Elon’s messages combined with certain negative Chinese articles, caused the market to dip immensely. The dip, combined with the activated stop-losses, was the start of a landslide. This week, the crypto market had to deal with 40% drops all across the board. We will never know whether Musk’s tweets kickstarted the dip, but the negative sentiment certainly had its effect on the market. After some days of silence, Elon pivoted slightly, clarifying that Tesla has no intention of selling its coins and closed off with the following tweet.
Tesla has 💎 🙌— Elon Musk (@elonmusk) May 19, 2021
Without a doubt, to be continued.
Read all you need to know on our Bitcoin Overview Page.