Tesla ditches bitcoin payments over environmental concerns
American e-car manufacturer Tesla (TSLA) stopped accepting bitcoins as a payment option due to environmental concerns. The move sparked lots of discussions regards to Bitcoin’s energy consumption, and the crypto community divided into two camps.
While an energy-intense Proof-of-Work (PoW) consensus algorithm was very popular among early cryptocurrencies, the vast majority of recent projects choose more eco-friendly consensus algorithms like Proof-of-Stake (PoS). However, Bitcoin maxis argue that currently only PoW can provide enough decentralization to ensure censorship-resistance, and the more energy Bitcoin uses, the more expensive it is to attack the network.
According to PoW supporters, the PoS centralizes power in the hands of early adopters, rich elites, custodial exchanges, and governments that can seize large amounts of cryptos from businesses and its citizens. These concerns are highly relative for Ethereum, which is currently in the transition phase from PoW to PoS. On top of that, the falling price of ETH will make Ethereum 2.0 more vulnerable to well-funded attacks during the next bear market.
The one thing most crypto adopters agree on is that the energy for Bitcoin mining, especially in regards to coal-fired power plants, is used without proper context. Bitcoin mining is a competitive business, so renewable energies account for somewhere between 39% and 77% of Bitcoin’s total energy consumption, simply because they are cheaper than coal.
At the same time, major Bitcoin miners reside in China, where coal is presumably subsidized by the government, making it a viable source of energy for mining, but that’s not a problem with Bitcoin per se. Moreover, many Chinese miners are naturally located close to underutilized hydro power facilities far away from populated centers, so they consume cheap energy which otherwise would be wasted due to the electricity transmission constraints. While hydroelectric power is not carbon zero, its environmental impact is far lower than that of coal, which has been historically used by the media to attack crypto.
Besides that, Bitcoin’s electricity consumption didn’t significantly change since Tesla started accepting bitcoins back in March, and the company is still holding a large position in BTC. These two factors sparked speculations that there might be other undisclosed reasons for such a sudden 180-degree turn.
The bottom line is that Bitcoin’s carbon footprint is a problem that should be addressed, but it’s important to distinguish between legit concerns and biased reports. We should also keep in mind that the traditional banking industry and the Internet itself consume more energy than the Bitcoin network. The Internet of things will bring that energy consumption to a completely new level, and yet corporations don’t drop support for IoT technologies due to environmental concerns.
Dog coins craze
The crypto community has seen it all - ‘Bitcoin killers’, ‘Ethereum killers’, ‘Monero killers’, ‘Uniswap killers’, and now it’s the time for ‘Dogecoin killers’. Once a crypto project achieves success in its niche, the army of copy-cat projects emerges.
After the rapid rise of DOGE, many teams tried to create similar meme-focused tokens and pump the price. The most successful in pumping the price was the community behind Ethereum-based Shiba Inu (SHIB) token. There is a big catch, though, 50% of the total supply of Shiba Inu has been transferred to Ethereum co-founder Vitalik Buterin without his consent. After a huge surge in price of this new dog coin, Buterin’s SHIB tokens were valued much more than his ETH holdings.
While the Shiba Inu community was speculating on what Vitalik will do with his massive SHIB bags, he came up with a brilliant move. Buterin simply donated 50 trillion of SHIB, worth around $1 billion - yes, billion with a ‘b’ - to the India COVID Crypto Relief Fund. A few days later he also burned 41% of SHIB total supply, donated other meme tokens to various organizations, and asked the crypto community not to send him any tokens without his consent.
In other news
DeFi protocol Rari Capital (RGT) has been exploited to the tune of $11 million. After the attack, the team behind the protocol gave up its entire allocation of 2 million RGT - worth around $25 million at the time of the announcement - to project’s DAO in order to reimburse victims.
According to a report from Bloomberg, the world’s largest crypto exchange by trading volume Binance is under an investigation by the U.S. Department of Justice and IRS for money laundering and tax evasion. The agencies haven’t accused Binance of any wrongdoing.
The team behind popular Monero-focused mobile app CakeWallet announced that all BTC and LTC addresses generated within the app with 12-word seed phrases can be brute forced due to the usage of an insecure random function. While victims complain about missing funds, developers urge users to update the app to the latest version and transfer funds to newly created 24-word seed addresses.
BSC-based yield farming aggregator PancakeBunny has suffered from a flash-loan attack resulting in a loss of $200 million. The attacker was able to loan and then sell a huge amount of protocol’s native token BUNNY, causing its price to crash. According to the team, project’s vaults haven’t been breached.