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Tesla suspends Bitcoin as a payment method. Is Musk now interested in Dogecoin?
Yesterday, on May 13, 2021, Elon Musk tweeted that Tesla has suspended the use of Bitcoin as a payment method to purchase the vehicle. He stated that the reason for this decision was the increasing use of fossil fuels for the transactions and mining of Bitcoin. He continued that although cryptocurrency has a great future, but not at the cost of the environment. He further clarified that Tesla is not going to sell any Bitcoin and will also look at other cryptocurrencies using less energy per transaction.
He also attached the screenshot of energy consumption which stated that the estimated Bitcoin electricity consumption on May 10, 2021, was nearly 148.77 TWh. The upper and lower bound consumption was 511.75 TWh and 46.56 TWh, respectively.
On May 14, 2021, Musk again tweeted that he believes in crypto, but the considerable increase in consumption of fossil fuels can't be tolerated.
To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal.
@elonmusk, May 14, 2021
Soon after this tweet, he again tweeted that Doge seems quite promising in improving the transaction efficiency of the system.
Working with Doge devs to improve system transaction efficiency. Potentially promising.
@elonmusk, May 14, 2021
People are indeed taking this tweet seriously and taking it as a hint to adopt Dogecoin now.
#Dogecoin is the future of cryptocurrency of Earth!!
A Twitter user (@MattWallace888), May 14, 2021
It is the time that people stop saying DOGE is a joke and start saying it was a joke. It is real, and it is here to stay!
A Twitter user (@positravelty), May 14, 2021
Another thing which can be noticed is that the price of DOGE has started to climb up soon after Musk's tweet. It is currently priced at $0.53. On the contrary, the price of Bitcoin has begun to decrease, and it is presently priced at $50,418.6. It can be rightly said that Musk's single tweet can shake things up to the core.
Is Bitcoin really energy inefficient?
Bitcoin indeed uses a massive amount of electricity compared to any other method. Fossil fuels majorly power the energy consumed by BTC, and hence, the BTC miners are actually producing a lot of carbon pollution. The electricity consumed is increasing with the increased price of BTC.
Bitcoin uses the proof-of-work algorithm for bitcoin mining, and the consensus mechanism is itself energy-intensive. However, the intensive consumption of energy is a method to maintain value and prevent hacking.
It is estimated that fossil fuels power almost 61% of Bitcoin mining, and the rest, 39%, is powered by renewable energy, including hydroelectricity.