Tesla – a top 10 Fortune 100 company run by one of the world’s richest people, Elon Musk – transferred $ 1.5 billion of its treasury cash to Bitcoin (BTC) in early February. Musk’s Bitcoin purchase terrified traditional investors who had to understand how their investment in Tesla would affect Bitcoin.
Currently, much of Tesla’s revenue comes from sales of excess renewable energy credits (RECs), which will dry up over the next few years as competing automakers produce their own zero-emission vehicles and build RECs with states that need them.
In Tesla’s filing with the US Securities and Exchange Commission, the company said it had updated its investment policy to be more flexible in diversifying and maximizing returns on cash. As part of this plan, Tesla announced that it would invest in certain “alternative reserves including digital assets, bullion, [and] exchange traded gold funds. “The statement goes on:
“We then invested a total of $ 1.50 billion in Bitcoin under this policy and may acquire and hold digital assets from time to time or over the long term. In addition, we anticipate that we will accept Bitcoin as payment for our products in the near future, subject to applicable laws and initially to a limited extent, which we may or may not liquidate upon receipt. “
In the Bitcoin market, Tesla has viewed the recognition and advancement in the crypto industry as an institutional validation for the use of Bitcoin as a store of value.
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Use of decentralized micro energy sources for bitcoin mining
Tesla’s other companies manufacture and sell solar panels, solar roofs, and batteries. The batteries are used in their cars and provide power storage for solar systems in residential areas.
Solar systems in residential areas can feed excess energy into the grid. The local utility will split a customer’s electricity bill based on the amount of electricity drawn from the system.
Tesla Powerwalls can store this excess energy and power various things in your home, including air conditioning, and charge your Tesla electric vehicle.
The excess energy from Tesla’s micro-energy sources can be diverted to carry out crypto-mining operations. Without crypto mining, the excess energy is either wasted or stored and sold for pennies on the dollar. Now Tesla and other energy companies can turn excess electricity into a digital asset like Bitcoin that is instantly bankable.
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How SpaceX fits
Many speculate that Tesla’s investment in and acceptance of Bitcoin as a means of payment is an important signal for the direction of the company. As we know, Musk is also the CEO of SpaceX, the company that plans to establish a colony on Mars in the next decade. However, US dollars generally do not work on Mars. The extended communication time between Earth servers and Mars servers poses many problems. There will still have to be a verifiable and trustworthy way of transferring value between the economies of the planets.
Bitcoin offers a better solution for securely transferring values between planets on a trusted network where 10 minute blocking times are beneficial rather than problematic. The SpaceX Colony can trade locally in an appropriate local medium of exchange and safely bring that value back to Earth, with no middlemen or concerns about inflationary monetary policy on Earth. Bitcoin offers people a more seamless way to integrate economies between planets. Hence, colonies on Mars are likely to be running Bitcoin nodes utilizing SpaceX’s Starlink satellite constellation.
Decentralized server architecture for setting up the Internet of Value
The transition from the analog world to a digitally indigenous society requires programmable money. The current fiat banking system is archaic, inefficient and incapable of meeting the needs of a technologically advanced society.
Bitcoin mining is the backbone of this development. Bitcoin is the best-known digital currency in the emerging decentralized economy. Bitcoin has reached critical network effects and is the logical choice for a digitally native global reserve currency. The Internet of Value – where value is transmitted as efficiently, cheaply, and reliably as it is today – is free from the control of any single government or corporation. Bitcoin serves this purpose due to the decentralized architecture integrated in the Bitcoin protocol.
Critics attack Bitcoin because it has too much computing power in mainland China. In the meantime, the decentralization of Bitcoin’s computing power will continue to improve as more and more energy producers recognize the benefits of converting excess energy into digital assets through Bitcoin mining.
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Bitcoin mining is necessary to create first-level security for the decentralized economy, a function that central banks are now providing for the fiat-centric global economy. The decentralized economy is becoming more efficient and complex. The strength of Bitcoin is that it has the world’s most powerful computer network, which can be used to secure the base layer of the decentralized economy on which all other value transfer solutions are built. We are witnessing the development of a new, decentralized financial ecosystem. One day, you might be able to send $ 20 to your friends on Mars without thinking twice about what it takes to get them there.
This article does not contain any investment recommendations or recommendations. Every step of investing and trading involves risk, and readers should do their own research in making their decision.
The views, thoughts, and opinions expressed here are the sole rights of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
William Szamosszegi is the CEO and founder of Sazmining Inc, a cryptocurrency mining developer and consultancy, and host of Everything Crypto Mining: The Sazmining Podcast. He is optimistic about the future of Bitcoin as the dominant global digital reserve asset and believes that Bitcoin is the first-level solution to solid money. William grew up in Maryland and studied psychology and management at Bucknell University. William spends his free time exercising, seeing friends, and reading.