It makes sense in a solidly virtualized casino economy

Tesla is a hype company with a small side gig in mfg

Tesla is a company that posts to reddit screenshots of tweets about subjects scraped from reddit. With a small side gig collecting government energy subsidies.

Well, it’s not completely unrelated: bitcoin drives energy consumption, which in turn drives demand for batteries of all shapes, which are a massive part of Tesla’s business plan.

How's that energy consumption drives demand for batteries? Does gas consumption drives demand for spare gas canisters?

IMHO rising energy price is totally not good for Tesla's and other electric car manufacturers. It increases TCO of electric vehicles and companies' cost of support for premium models with free charging access.

Higher energy consumption -> higher demand for effective generation from all sources, including renewables -> higher demand for batteries to manage non-continuous supply, which is fairly typical of many renewables (wind, solar, etc).

Energy-prices fluctuations are relatively irrelevant in the long run. Oil will run out, and renewables are the only hope to address energy needs without killing the planet. This message is well-understood by now, the transition has started, it’s just a matter of how fast (or slow) we get to the new normal.

Again with the energy point. The energy is insignificant compared with almost anything else. Wasn't some article that the sum of all standby electronics uses more energy than bitcoin and that's only in US?

What are you, Apple? That gives no charger for "environmental reasons" while packaging its wireless headphones in a crapload of unnecessary plastics.

If you are so energy consciousness then go bark at US military, those are the biggest polluters and energy hungry of the world.

Bitcoin consumes more electricity than entire countries - more than the Czech Republic for example. It consumes a third (or was it a fifth?) of all the electricity of all data centers in the world. It is by no means insignificant.

That's not a counterpoint if those countries also consume an insignificant amount of energy.

Isn't a rebuttal different than a deflection?

Anyway half - 3/4ths of bitcoin mining is using clean energy that wasn't going to be used for anything else, or a sustainability solution for energy that was going to be used as pollution.

> Anyway half - 3/4ths of bitcoin mining is using clean energy that wasn't going to be used for anything else

While the clean energy claim may be true, why do you claim it wouldn't have been used for anything else?

because a lot of energy is not utilized if it will be lost in transit. they don't send it and there is extra capacity on site and from the specific source of energy. there are gigawatts of energy that can only be used at the source, which has never had a use until the mining machines showed up.

Then why not stop producing it, instead of using it on Bitcoin? Even 'clean' energy production has environmental costs, from environment destruction for hydro to maintenance/production costs for solar and wind.

Now that we've moved the goal posts, is it still more of an environmental cost than just imagining it was fossil fuels or energy that being pulled away from other use cases?

The answer to your question depends on which power source we are referring to. Where Bitcoin is a sustainability solution, it is reducing waste by products which were already being produced and now are not being produced because they are used for energy.

Bitcoin is a multi-billion industry whether you respect its existence or not, your arguments will simply have to get more nuanced to have a real conversation about what's happening.

Organizations that know better are intentionally omitting the source of energy, in their discussion about the amount of energy. Don't fall for it.

Excess electricity can be a real problem, and is getting worse with renewables. But surplus energy would be better used to desalinate seawater, or produce hydrogen through electrolysis, or storage.

Except the plants are not built at the sea and desalination is not a clean process.

Or with electrolysis or storage you need to generate it and transport it to where it can be used, getting you back to square one because nobody is doing that because it is uneconomical. Whereas mining is not because it can be all done on site in remote locations and doesn't even need great internet. High latency, spotty internet is good enough for crypto mining.

We know what the ideals are: no pollution and infinite energy, or no pollution and less energy use. Thats not going to happen, and crypto wasn’t part of those 50 year old models, yet it is accomplishing a lot of those ideals and people choose not to respect its existence as it alters their worldview.

If bitcoins price continues to rise, miners will be greatly incentivized to further decrease power costs. I hope this leads to innovation in clean power tech, especially in developing nations.

Right. 60% of the hashrate in China, where 60% of the power comes from coal, to mine a useless coin.

If miners could burn cyanide to mine, they would. They don't give a single shit about clean energy, just cheap energy

so upwards of ~36% of Bitcoin mining is coal powered. yes, that fits all the estimates that Bitcoin mining is almost a supermajority using renewable energy at some plants and and curbing pollution as a sustainability solution at other plants.

1/ Bitcoin itself might be 100% on renewables. But it's still causing a need for non renewables to be used, to compensate for the fact that you're mining a useless coin. I'd rather have us use this energy in a useful way.

2/ Bitcoin is causing _more_ energy consumption. It's not curbing pollution, in any way. It's just grafting itself where the energy is cheap. Noone's building wind farms for bitcoin.

3/ If I cut off 36% (which is a low bound, other countries are not clean either) of your salary, go ahead and tell me it's okay because you still have the supermajority of it.

2/ at flare gas plants bitcoin is curbing pollution, and this helps the plants and the state meet their climate goals. yes their pursuit of cheap power is what takes them where they are, an economic incentive for sustainability solutions that 50 years of idealists never were able to consider and are now fighting to ignore because this solution doesnt decrease energy use.

3/ I’m not sure what you are saying here? Is this supposed to be an analogy to something? What happens if you get rid of that energy use? The bitcoin network will adapt to a lower difficulty rate... not sure what you think you’re saying here.

>If bitcoins price continues to rise, miners will be greatly incentivized to further decrease power costs.

That's not how bitcoin works. The price of bitcoin is the budget you can spend on mining a single coin. If the price is higher, you can afford to run more miners. If the cost of electricity goes down, you can afford to run more miners. If the efficiency goes up, you can afford to run more miners. Running more miners increases the mining difficulty and you are back where you started.

If Bitcoin is worth $50k people will destroy $50k of energy to acquire Bitcoin.

If bitcoin is worth $50k, people will destroy MORE than $50k of energy to acquire bitcoin, using resources that are subsidized either intentionally or unintentionally.

Miners are motivated by profit, if your cost of electricity is lower, your profit is higher. I’m not sure why you are trying to obfuscate that simple fact.

Miners are motivated by simple profit calculation, not R&D into energy generation. R&D has an unbounded capital risk, while bitcoin is a (relatively simple) statistical calculation of energy-cost which is a bounded cost (at any given time, within a range). Not a single bitcoin MINER is "greatly incentivized to further decrease power cost".

There are industries in much better positions to revolutionize energy production than bitcoin miners. In fact, there basically a single industry that doesn't have this incentive.

If bitcoin price continues to rise, wouldn't the power cost become relatively smaller? Wouldn't miners care less?

The amount of money for a given amount of energy spent mining you get is effectively Bitcoin price / difficulty.

If Bitcoin price goes up, then the return on energy gets greater. Therefore, it's worth it to spend more energy mining. Then difficulty rises and takes this incentive away, reaching a new equilibrium with more energy spent.

The energy required to provide standby power for every electronic device in the United States is a tremendous amount of electricity.

I'm afraid it makes sense if they are hedging bets against a major global economy...

Hedging against what? There are plenty of ways to hedge against inflation risk or currency risk without buying into an asset that can lose 50% or more of its value very quickly (and has, a number of times).

How would you suggest hedging against the death of fiat currency without buying a non fiat currency?

Maybe it's just me, but if we truly see the (global) death of fiat currency, the inability of Elon Musk to sell a Tesla is gonna be among the very least of anyone's problems.

In general yes, but I think Musk's inability to sell Teslas is going to be a major problem for the particular person deciding whether Tesla buys BTC or not.

> How would you suggest hedging against the death of fiat currency without buying a non fiat currency?

We’re aware there are non-U.S. dollar currencies out there? And non-currency assets one can buy?

Nigera is suffering from high inflation and their problem is that they aren't mechanizing their agriculture sector. The end result is that they import a lot of food and fail to export their cash crops. If the government borrowed/printed money and used it to grow the agriculture sector they could actually stave off inflation despite increasing the money supply.

As per usual, the major issue with fiat currency is how poorly the government is managing the country.

Bitcoin is not a viable hedge against a global economic downturn. Just because people push these narratives doesn’t make them true. There is absolutely no evidence that Bitcoin would not crash just as fast or faster than the economy. There are other viable assets that have well studied and well documented track histories.

Crypto currencies are best compared to pink sheets prior to increased regulation, and no one in their right mind would tell you to buy pink sheets to hedge against economic downturn even if their favorite did show a 10000% increase in value.

>There are other viable assets that have well studied and well documented track histories.

can you expand on that?

God this point doesnt make sense. Bitcoin exists in lands that are governed by men. The governments could make it valueless at the first sign of threat to political currency. BTC is not a hedge, it's just an asset class that is growing fast and gaining attention faster than adoption.

If they were properly hedged then there would be no profit from Bitcoin going up. Global companies should be hedged so that currencies going up or down do not affect performance. Unless you’re betting on a particular currency.

Tesla's stock has never been a car manufacturer stock. That's why it has so much short-selling against it. If you value it as a car manufacturer and compare it's (underlying business numbers):(stock price) to anything else, it's insane.

"at any company that made sense" is true, to a point. But the point of tesla has been, for a not-insignificant number of people, not meant to make sense. It's faith based. It's cult based.

Elon Musk has strong parallels to Trump's appeal. It might not make sense. That's not the point.

I don’t view it as faith at all. I view Tesla as a software and technology company that incidentally makes cars. At least, this perspective can start to explain their valuation and the hype. I think Tesla is doing things no else is (was) doing and they have a massive first mover advantage and mind share. The other manufacturers are struggling to keep up, despite the persistent quality issues with Tesla. Tesla is giving people a product they want as early as possible. It comes with some warts, but Tesla figured out early on what people will accept and what people won’t in terms of quality.

Despite seeming like polar opposites they have a lot of similarities. A great knack for “triggering” their detractors, and a hyperdefensiveness in the face of criticism.

i think it is called "cult of personality", "great man theory" or "hero worship"

and it is probably related to medieval kings and queens, religious prophets and why some monkeys are more equal than others.

The challenge for Tesla and Elon is that I don't see the exit strategy? If Elon sells off his Tesla shares in any sizable quantity, it seems the stock would drop massively. If Elon steps down his involvement or passed away, same thing. So it seems it needs to keep on the show until Tesla can actually sustain its value somehow through normal business operations.

Knowing Elon he probably already planned on a way to exit the stock in a way that lets him reenter at the correct market valuation.

Execs in any public company routinely sell shares at a pre-determined rate every quarter. Execs besides Elon have been selling as part of the plan, and company employees are free to sell as well.

According to SEC filings, Elon himself hasn't sold any recently, but he owns 20% of Tesla, worth about $10B today. Even if Tesla drops 10x, he would have $100M worth of shares. Not to mention all his other assets, shares in SpaceX etc. He has more money than he will ever need.

> but he owns 20% of Tesla, worth about $10B today.

Tesla's market cap is $764.255B. 20% of that is $152.851B.

https://finance.yahoo.com/quote/TSLA/

Thanks, that number did seem a little off to me :)

> He has more money than he will ever need

Sure, he also probably takes a salary for his role at the companies as well. Still, there's a reason he continues to work I'd assume? It might be he truly wants to get electric car on the road, or it could be he wants more money. In both cases you could ask: "Can Tesla survive his inevitable exit?"

So ignoring Elon's motivations here, as maybe he just has fun running Tesla, who knows, still the question is relevant to other investors into the Tesla stock, and for Tesla's employees.

Fake it till you make it.

>Elon Musk has strong parallels to Trump's appeal.

Isn't that the strangest thing? If you watch videos of Elon he is no where near as charismatic as trump.

I think it mostly stems from his success with SpaceX and earning accolades for being, "The Guy who does Impossible things". His having a car manufacturing company with an impossible share price just make sense.

I think the similarity is less their personalities, and more in their use social media for shock value and attention, and the quasi-religious devotion of many of their supporters.

What Elon understands is that if you are interesting you don't have to pay for advertising. Tesla got hundreds of millions in advertising for this and it cost them nothing but a bit of risk on some of their cash position.

> Tesla is a car manufacturer!

That's what you think.

Tesla is a stock sales company that has a side business in manufacturing new toys & breakthroughs

yes .. but elon (handwaving wooo)

You didn't hear about SolarCity?

I'm just guessing here but they might be hedging against future trade restrictions set by China against US companies like Tesla. If another trade war was to happen, people in China might be able to buy a Tesla using Bitcoin vs having to buy a NIO.

I think there are a couple issues with this idea: firstly, they'd be accepting the Bitcoin, so they wouldn't need any on hand to process the purchases. Secondly, if China wants to prevent or restrict the sale of a physical good, especially one as large as a car, it's far easier to stop it from being imported (or manufactured) than to stop people from paying for it.

Cars are regulated beyond just the point of sale. I believe it would be rather difficult to get said car registered (presuming there's a Chinese equivalent to vehicle registration), if you could even arrange receipt in the first place ;)

How do you imagine that pans out for the Chinese buyer?