Throughout the last couple of months, Bitcoin has faced obstacles that have made it seem like the currency may not have a bright future. At one point, it seemed like Bitcoin might be what we are all using as primary currency years from now.
However, a few key moments over the summer have made it seem like that might be possible for other forms of cryptocurrency, but not for Bitcoin.
On May 12, Elon Musk announced that Tesla would no longer be supporting vehicle purchases using Bitcoin.
Musk, one of the biggest billionaire supporters of Bitcoin in the past, said on Twitter, “Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
Tesla’s past support of Bitcoin led in part to its price skyrocketing, but following this announcement, the price dropped 5% in just a couple of minutes.
Musk still sees a future for cryptocurrency but will not support the use of Bitcoin until its impacts on the environment are lessened.
In the same tweet, Musk said, “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.
“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”
Over the summer, China, too, began to crack down on Bitcoin.
The Chinese government has toyed with the idea of banning Bitcoin for a while now but has instead opted for periodic crackdowns rather than a full-on ban.
This most recent crackdown has included banning financial institutions and payment companies from providing crypto-related services, mass arrests of people suspected of using cryptocurrencies in nefarious ways, and shutting down Beijing Qudao Cultural Development Co Ltd, a company that “was suspected of providing software services for virtual currency transactions,” according to a statement released by China’s central bank.
These measures led to the price of Bitcoin plummeting yet again, and now half the world’s Bitcoin miners have gone dark.
The Chinese government has shown concerns about the volatility of Bitcoin in the past, saying that they are trying to guard against financial risks and have also brought up the environmental issue.
Other concerns that the Chinese government might have are that Bitcoin transactions are difficult to trace, and cryptocurrencies make it possible to get around China’s capital controls and easily convert yuan into other currencies.
The price of Bitcoin has started to increase again as the summer winds down. But given that one Bitcoin currently costs around $50,000, as of Aug. 22, and most either know little about mining or lack the capability to mine, it seems unlikely that Bitcoin will catch on with the majority of the population.
While Bitcoin has had a decline, Dogecoin has risen in popularity. With its cheap cost and companies beginning to use it for transactions, it seems like Dogecoin will soon take the spot as the top cryptocurrency.
While Musk’s enthusiasm with Bitcoin dropped, he shifted his support to Dogecoin, constantly bringing up the price by tweeting about it and announcing that SpaceX, Musk’s other company, used the cryptocurrency to pay for a lunar satellite launch.
So while Musk was vague in his tweet about which cryptocurrencies he planned on using in the future, it looks like he has made his choice. And with other billionaires such as Mark Cuban also supporting Dogecoin, the cryptocurrency landscape seems to be headed in a new direction.
