What's Happening? Musk, Bitcoin, hacktivists and everything in between

June 07, 2021 / 08:39 PM IST

Elon Musk, Tesla’s outlandish founder, and Bitcoin, the most popular of all cryptocurrencies have shared a weird love-hate relationship for a long time now. Bitcoin swings wildly at each of Musk’s tweets, where he oscillates between supporting them and disregarding them at regular intervals. The latest in this series is a group of international hacktivists, namely Anonymous, who called out Musk for “playing games” with bitcoin.

What’s the row about?

In a video posted by the hacktivist group on Facebook, the hackers targeted Elon Musk by saying that his “carefully curated” image is being exposed and that he should “expect” them, given his eccentric actions in the cryptocurrency markets have adversely affected the lives of many investors. 

“People are beginning to see him as nothing more than another narcissistic dude who is desperate for attention. You may think you are the smartest person in the room, but now you have met your match. We are Anonymous! We are Legion! Expect us,” the group warned in the video. 

Elon Musk’s push for a Bitcoin Mining Council sparked much outrage since it is seen as an attempt to centralize bitcoin mining, which is based on the very fundamentals of decentralization and autonomy. The council aims to unite North American bitcoin miners and promote better, cleaner energy practices and sustainable mining measures. 

Centralizing Bitcoin

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A closer look at the current bitcoin mining landscape would tell you that this process, in fact, is already highly centralized. With China making up for more than 65% of the world’s bitcoin mining activities, the US features in the list with the next largest share of 7.24%

In a bid to become compliant with US regulations on anti-money laundering, one of the country's largest bitcoin mining organizations, Marathon Digital Holdings, began eliminating irregular transactions from their blocks. The North American organization, notably, is also a member of the recently formed Mining Council. 

For a concept based entirely on the pillars of localization and human-free mediation and interactions, this is a direct threat to the independence of the blockchain and cryptocurrency system at large. 

In addition to this, Tesla’s over-reliance on its regulatory credits for revenue generation has also drawn flak from many experts. 

Regulatory Credits and Tesla

With growing concerns around the climate and environment in recent years, efforts for reducing or eliminating automotive carbon print have gained prominence. Globally, governments have incentivized automobile makers to develop vehicles that are environment friendly by various means like providing subsidies and more. 

In many U.S states, automobile manufacturers are required to fulfill a certain target of producing Zero-Emission Vehicles (ZEVs) out of the total number of cars they produce. 

Based on this figure, such automakers get certain credits and subsidies. Since Tesla exclusively sells electric cars which come under this category, the company always has surplus credits and can sell them at a solid profit. 

Per Tesla’s latest Annual Report, “We earn tradable credits in the operation of our automotive business under various regulations related to ZEVs, greenhouse gas, fuel economy, and clean fuel. We sell these credits to other regulated entities that can use the credits to comply with emission standards and other regulatory requirements. We recognize revenue on the sale of automotive regulatory credits at the time control of the regulatory credits is transferred to the purchasing party as automotive sales revenue in the consolidated statements of operations.”

And much of Tesla’s profit comes from these sales, which are lapped up by non-electric automobiles, which, in turn, need them to qualify the pollution standards set by the US and other countries. As per Tesla’s recent figures, the company earned $1.58 billion from such carbon tax credit sales in 2020, a figure that has steadily grown in the last 2-3 years, from 419 million in 2018 and 549 million in 2019, respectively. 

The hacktivist group also alleged that this was Tesla’s major source of revenue, instead of its electric car sales. Meanwhile, as the tiff continues, bitcoin tumbled to around $36,400 dollars today, registering a 5% fall in its trading volume over the last 24 hours. 
Ira Puranik
first published: Jun 7, 2021 08:28 pm

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