+ 0.89
+ 0.26%
+ 0.07
+ 0.02%
+ 0.75
+ 0.18%

Bitcoin Gets a Carbon Black Eye from Musk, but Draper Stands by Price Predictions

May 14, 2021 9:29 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Bitcoin Gets a Carbon Black Eye from Musk, but Draper Stands by Price Predictions

Elon Musk brought the environmental concerns of Bitcoin mining to the fore, but supporters believe that the impact can be mitigated.

Tim Draper Stands by $250k in 2023

We recently spoke to arguably one of the most insightful and successful investors in crypto and emerging technology, Tim Draper, Founder at Draper Associates, DFJ, Draper University and asked him about his December 2019 prediction that Bitcoin would reach $250,000 in 2023.

Based on his prediction and staunch belief in Bitcoin and the potential of decentralized digital currency overalls, we asked if 2021 made him feel like saying “I told you so” yet. 

“No, I wouldn’t say that. I won’t say I told you so until it happens,” Draper said. “But I make my predictions and I stick to them.”
See also: BTC vs ETH price predicitons
We asked Draper if even in light of the recent dip he expected Bitcoin to cross the $100,000 barrier in 2021 and Draper simply affirmed, “Yes. Beyond that.”

In 2014, Draper won 50,000 BTC in US Marshall’s auction, and he invested in over 50 crypto companies with investments including Coinbase, Ledger, Tezos, and Bancor, among others. He is not a Bitcoin maximalist, as he explained, so we asked him, “What about Dogecoin? What’s driving it?”
“A dog? People like it. It’s cute,” Draper said. “And, of course, Elon Musk has been talking about it.”

Tesla Suspends BTC Purchases

Elon Musk has been talking quite a bit about both Bitcoin and Dogecoin in 2021. After months of extolling the strengths of Bitcoin, on May 12, Musk tweeted a statement reading in part, “Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions…”

If Elon has had a lifting effect on Bitcoin with his support, two days of criticism has had a deleterious effect, dropping 9.5% on Thursday, according to Bloomberg. 

Not content to simply rain on the parade of more than a year-long BTC bull run, with minor corrections, Musk is actively putting his support elsewhere to the world’s most known meme token, Dogecoin. 

Very surprise, much crypto

Elon Musk has expressed support before for Doge, earning himself the moniker “The Dogefather,” recently tweeted, “Working with Doge devs to improve system transaction efficiency. Potentially promising.”

Musk’s support has brought Dogecoin from $.43 to over $.50 — more than halfway to the $1 mark that supporters are hoping for to show the legitimacy of the token. 

Supporters of the coin on FinTok — the crypto-investment arm of TikTok — want more than legitimacy, of course, as you can see with the pinned tweet on @TikTokInvestors. They want to take this dog past $1 and into metaphorical escape velocity.

The Environmental Impact of BTC

Attention to environmental concerns has grown through 2021 and has come to a head with Musk’s and Tesla’s announcement, bringing BTC to under $50,000. 

However, some leaders in the industry believe that the environmental impact of Bitcoin is receiving disproportional focus. 

“Users need to understand that the electricity use narrative can be exaggerated. The singling out of Bitcoin mining for its electricity use can at times appear subjective,” Rob Chang, CEO, Director, and co-founder at Gryphon Digital Mining, an environmentally-friendly Bitcoin mining operation that claims to use 100% renewable hydroelectric power.

Joseph Fiscella, blockchain developer and Founder of Florincoin (Flo Network), now known as PIN Network, challenged the idea that Bitcoin is having the polluting impact that detractors claim. 

“Bitcoin mining is not location dependent. Bitcoin can be mined anywhere power can be generated. This isn't the case for almost any other power consumption giant that needs to be near a large population to be useful,” Fiscella said. 

Jag Sidhu, CTO Blockchain Foundry and Developer of Syscoin, stated that the energy consumption of Bitcoin has to be measured based on all of its direct and indirect usage, but pointed out that as it grows, the footprint will shrink for individual users. 

“The absolute amount is directly proportional to the valuation of the Bitcoin ecosystem, not only its own market cap but all of the value derived off of it through the myriad of verticals being built where Bitcoin is directly or indirectly securing value through settlements. However, as the industry grows, the density of energy expended per transaction grows as well, therefore minimizing the individual footprint per user,” Sidhu said. 

Sidhu believes that Bitcoin will be limited in its ability to reduce energy usage per user and can achieve greater user density and reduced energy per user through merge mining on compatible blockchain networks. 

“If Bitcoin remains as an SoV, which it is looking like it is, the density will only marginally increase and thus the energy consumption in proportion grows… the derived value and density grows through merge-mined networks such as the Syscoin network… which provide utility that Bitcoin cannot,” Sidhu said. 

Of course, some hope not only to combat the environmental impact of Bitcoin mining but look to create environmental improvement.

“While carbon offset credits are great, alone they are not enough to account for the impact of crypto on the planet. Carbon offsetting should be done in tandem with adopting blockchain solutions that use the lowest amount of energy possible. The financial revolution should be a net positive for the environment, not a net negative,” W. Sean Ford, COO of the Algorand network, said. 

Luis Felipe Adaime, CEO of MOSS, a Brazilian company that has tokenized carbon credits to benefit projects in the Amazon, believes that the environmental impact of Bitcoin is undeniable and needs to be managed.

“BTC’s proof-of-work is a highly complex, energy-consuming process that leads to high GHG emissions, mostly from the burning of fossil fuels. ETH is moving to proof-of-stake to address the emissions of the Ethereum network. There are reasons to believe that BTC’s growing popularity will lead to faster adoption of green energies, but, in the meantime, the carbon footprint of the world’s largest cryptocurrency is undeniable,” Adaime said. 

In 2021, it seems clear that Bitcoin is meeting global demand for decentralized digital currency. As long as there is a use and a demand, Bitcoin will be part of our reality — but it doesn’t need to be at the cost of the environment.

“Blockchain projects need to understand that responsible use of renewable electricity and economic viability are not mutually exclusive ideas. There is a narrative out there that renewable energy is more expensive energy. That is simply not the case,” Chang said.

Cover modified image by ejaugsburg from Pixabay 


For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.


Cryptocurrency Markets

Related Articles

EXCLUSIVE: Dogecoin Co-Creator On Development Efforts Says 'No Knock On Elon,' Others But Actions Speak Louder Than Words

Dogecoin (DOGE) co-creator Billy Markus shared his thoughts on Tesla Inc (NASDAQ: TSLA) CEO Elon Musk and others’ efforts to advance and develop the meme coin. read more

Bitcoin Chops, But Could Be Prepping For A Move

Bitcoin (CRYPTO: BTC) fell off a cliff on March 12 after Tesla Inc (NASDAQ: TSLA) CEO Elon Musk announced on Twitte read more

Billionaire Ken Moelis Is Watching The Crypto Space, Compares It To Gold Rush Of 1848

What Happened: Ken Moelis, billionaire investor and head of global investment bank Moelis & Co (NYSE: MC) said he had been watching the cryptocurrency space carefully. read more

Texas Regulators Move To Allow Banks To Custody Crypto Assets

What Happened: A notice issued by the Texas Department of Banking on June 10 shows that state-chartered banks can provide customers with virtual currency services on condition that the bank has applicable protocols read more