I’m going to try to explain Elon Musk’s seemingly “big brain” but actually pretty dumb gambit with regards to Bitcoin mining. Note carefully the dates on each development in the story.
Why did Tesla buy $1.5 billion worth of Bitcoin?
Couple of factors – one short-term and one long-term.
Short-term play – Tesla’s production was halted due to supply chain effects from the pandemic. This is why there has been a lot of delivery delays this year. This meant that Tesla’s shrinking profits from selling carbon credits to other carmakers alone wasn’t enough to post a profitable quarter. So Tesla decided to buy Bitcoin and then sell some of it before the end of the quarter to make up for the shortfall.
Long-term play – The reason for Tesla’s revenue from carbon credits sales shrinking is that European carmakers are shifting focus to EV themselves, meaning they no longer need to purchase credits from Tesla to comply with strict emissions regulations in the EU.
So Tesla now needs to make up for this potentially permanent revenue loss. What do they do?
One day before Elon Musk tweeted that Tesla would no longer accept Bitcoin payments due to “rapidly increasing use of fossil fuels for Bitcoin mining and transactions”, Tesla applied for renewable credits certificate from the EPA.
Unlike carbon credits, the EPA’s renewable credits can be sold in the open market to ANY industry. Elon figured he could create a new renewable credits market out of Bitcoin mining.
Too bad for Elon Bitcoin mining uses 4x higher than the average share of renewables in the US (56%)
The dumbest part of all this has to be the use of “and transactions” because no incremental energy is used for transactions. This guy frankly has zero understanding of how Bitcoin works.
Personally, I don’t think he cares to understand. Notice how he’s trying to hijack dog coin and turn it into PayPal.
Bitcoin does not benefit beneficiaries of the fiat pyramid scheme. Tax-dodging billionaires who get free money from the government making the rest of our money worth less are at the top of the pyramid and they’re loving it! (credit iTruth84)