Crypto Critic: Will bitcoin take Tesla to Mars?
Crypto Critic: Will bitcoin take Tesla to Mars? Crypto Critic: Will bitcoin take Tesla to Mars?

The king of electricity and Bitcoin

Tesla – one of the top companies on the prestigious Fortune 100 list, run by one of the richest men in the world, Elon Musk – purchased Bitcoin for $1.5 billion in early February. Musk’s purchase of the most popular cryptocurrency surprised traditional investors, who now need to understand that their investment in Tesla will be tied to Bitcoin. Currently, much of Tesla’s revenue comes from the sale of surplus renewable energy credits (RECs), which will run out in the next few years as competing electric automakers produce their own zero-emission vehicles and work with local governments to expand networks of renewable-based charging stations.

Formalities

In a statement filed by Tesla with the U.S. Securities and Exchange Commission, the company said it has updated its investment policy to be more flexible in diversifying and maximizing returns on idle cash. As part of this plan, Tesla said it will invest in certain alternative reserve assets, including digital assets, gold bullion and gold in exchange-traded funds. The statement continues:

Subsequently, under this policy, we have invested a total of $1.50 billion in Bitcoin and may purchase and hold digital assets from time to time. Further, we expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable regulations and initially on a limited basis, which we may or may not liquidate upon receipt.

The Bitcoin market has seen the move made by Tesla as the crypto industry advances, finally gaining institutional validation by using Bitcoin as a store of value.

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Surplus

Other companies under Tesla’s management make and sell solar panels, solar roofs and batteries. Batteries are used in cars and provide energy storage for home solar systems. Residential photovoltaic systems can provide excess energy to the grid. The local utility company will prorate the customer’s electric bill based on the amount of energy taken from the system. Tesla Powerwalls can store excess energy and power various equipment in the home, such as charging electric vehicles from Tesla.

Excess energy from Tesla Powerwalls can be redirected to run cryptocurrency mining operations. Without cryptocurrency digging, excess energy is easily wasted or stored and sold for pennies. Now Tesla and other energy companies can convert excess energy into assets cyfors, such as Bitcoin, that can be immediately used for financial purposes.

Cosmic direction

Many speculate that Tesla’s investment and acceptance of Bitcoin as payment is a significant sign of the company’s direction. As we know, Musk is also the CEO of SpaceX, a company planning to establish a colony on Mars in the coming decade. However, US dollars or other fiat money will generally not work on Mars. The extended communication time between Earth’s servers and Mars’ servers creates many problems. However, there will still need to be a verifiable, trusted way to transfer value between the economies of both planets.

Bitcoin offers a better solution for securely transferring value between planets on a trusted network where 10-minute intervals between blocks are beneficial rather than cumbersome. A SpaceX colony can trade locally using a convenient local medium of exchange and safely transfer that value back to Earth without any intermediaries or concerns about inflationary monetary policy on Earth. Bitcoin offers people a more seamless way to integrate economies between planets. This is why colonies on Mars will likely operate Bitcoin nodes using SpaceX’s Starlink satellite constellation.

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Evolutionary time

The transition from an analog world to a digitally native society requires programmable money. The current fiat banking system is archaic, inefficient and unable to meet the needs of a technologically advanced society.

Bitcoin mining is at the heart of this evolution. Bitcoin is the most recognized digital currency in the newly emerging decentralized economy. Bitcoin has achieved critical network effects and is the logical choice for a digitally native global reserve currency. The Internet of Value – where value is transferred as efficiently, cheaply and reliably as data is today – is free from any government or institutional control. Bitcoin serves this purpose because of the decentralized architecture built into its protocol.

The basis for a new economy

Critics have attacked Bitcoin for having too much computing power in mainland China. Meanwhile, bitcoin’s decentralized computing power will continue to improve as more and more energy producers see the benefits of converting excess energy into digital assets through bitcoin mining.

Bitcoin mining is necessary to establish layer one collateral for the decentralized economy, a function that central banks currently provide for the fiat-oriented global economy. The decentralized economy is becoming more efficient and multi-layered. Bitcoin’s strength is that it has the world’s most powerful computer network, through which it secures the fundamental layer of the decentralized economy on which all other value transmission solutions are built. We are witnessing the development of a new decentralized financial ecosystem. One day you may be able to send $20 to your friends on Mars without thinking twice about what it took to get it there.

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Finans Critic