Cryptocurrency coins and money. Source: QuoteInspector.com (Creative Commons license).
Elon Musk is no stranger to the financial world. He and his brother Kimball started the company now known as PayPal. Even though he is no longer associated with PayPal, he is still an active player in the global financial scene. Lately, he has delved into the world of cryptocurrency.
Like anything he goes into, Musk has shaken up the cryptocurrency scene. He has given his support to Dogecoin. He has also made his company Tesla accept payment in Bitcoin. However, the decision was rescinded, citing disputed concerns about the environmental impact of crypto mining.
Cryptocurrencies are a digital alternative payment method that is free from a centralized authority. This means any centralized management does not fix the prices. The first and most popular cryptocurrency was named Bitcoin. Other cryptos include Binance, Dogecoin, Ethereum, and many more. They trade just like traditional currencies trade.
Mining is the process of putting new Bitcoins into circulation. It is a resource-intensive process that requires high-capacity computers to carry out the complex computation involved.
Musk largely stayed out of cryptos initially, going as far as denying he was the enigmatic Satoshi Nakamoto, credited with creating cryptocurrency. The CEO even appeared skeptical of the legality of crypto in its infancy. He was also one of the victims of a high-profile hack of Twitter accounts used to promote a crypto scam.
Musk largely stayed out of cryptos initially, going as far as denying he was the enigmatic Satoshi Nakamoto, credited with creating cryptocurrency.
Things changed however, in 2019 when Musk began to pay attention to crypto. He praised Bitcoin's structure and claimed there was some merit to Ethereum. Later that year, Musk pronounced his blessings on Dogecoin, calling it his favorite crypto. As a result of his massive fanbase on Twitter, Musk's approval doubled the coin's price within four days.
For the rest of the year, Musk continued to influence the price of Dogecoin with his tweets. The price swung the opposite way when he criticized the coin.
Another market upheaval came when Tesla bought $1.5 billion of Bitcoin and said it would accept crypto as payment. The coin surged to its highest price ever, about $58,000. Musk would later tweet that Tesla would no longer take the currency.
We may have yet to hear the last word on Tesla and crypto however, as Musk said Tesla might go back to accepting crypto, based on reports of the usage of renewable energy in the mining of cryptos.
Musk however, continues to be involved in cryptos in a personal capacity. He tweets and responds to memes and jokes on Dogecoin on Twitter. Musk also confirmed at the B Word conference that he holds Bitcoin, Ethereum, and Dogecoin in his name. His partner, artist Grimes is also involved in cryptocurrencies.
"I would like to see Bitcoin succeed," he declared. Bitcoin went up 6%, and Ethereum jumped 10.6% after the statement.
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Cryptocurrency