Much ink has been spilled over the past few days about the unannounced reunion of North American miners. Asked at the Consensus conference organized by Coindesk, Michael Saylor set out to dispel the legitimate fears of bitcoiners.
On the decline of Bitcoin
Before coming to this famous “mining advice”, Michael SAylor gave his opinion on the recent fall in bitcoin:
“If you take an occasional interest in bitcoin, you will only see the price volatility. But after having examined it in depth, we realize that it is a long-term investment playing out over a generation, a decade. […] Of course, volatility was higher than usual last week. […] But let’s take a step back: a ton of institutions decided to buy at the start of the year, when we were at $ 30,000. The value of bitcoin has doubled in three months but it cannot double every quarter. The institutions therefore stopped buying before returning again at a very good price.
Indeed, it is necessary to look at the volumes of trade on Binance – which is probably the most liquid exchange. On Black Thursday in March 2020, it traded for $ 2 billion in BTC, the annual record. On the day Microstrategy announced its BTC purchase, August 10, it had traded for $ 1 billion in BTC on the day. Last week, it traded 14 or 15 billion on certain days. 60 billion in all over a period of 6 days. So, in summary, over one year, the price of bitcoin has increased fourfold with liquidity increasing by a factor of 5 to 8, or even 10. In other words, institutions this week bought $ 60 billion worth of bitcoin from people who panicked because of what I consider to be FUD. […] You always have to look if the price is moving without volume or with a lot of volume because this tells you the sentiment of the institutions. “
On the “Mining Council” controversy
Noelle Acheson then engaged with the famous “mining council” which hit the headlines this week. Michael saylor gave some background:
“Elon strongly believes in crypto technology to enhance freedom. Bitcoin is for him a long-term store of value. He expressed this sentiment in several ways, including taking a multi-billion dollar BTC position. We all know he recently became concerned that bitcoin could be a catalyst for fossil fuels. This release caused a stir on Twitter, allowing bitcoin to take over media space for a whole week.
Bitcoin is great, but it’s not that easy to explain to the general public. I don’t think making up a character on Twitter is the right way to educate audiences and build consensus. So I contacted Elon and we had a very long conversation. He told me that we would all win if miners were transparent about their energy use and energy sources. It is true that we do not have a common model to clarify energy consumption. We don’t have a forecast model either, so we let journalists create their own models. The most famous being that bitcoin was to boil the oceans within a handful of years …
My take is that energy efficiency is increasing exponentially. Indeed, the S19 mining machines have multiplied the energy efficiency by 5 compared to the S9 miners. Between improving mining machines, halvings and changing transaction costs, I think energy efficiency will increase exponentially and energy consumption will decrease. It’s a complicated subject. I asked Elon if he had any dealings with the miners. He said he would like to meet them. I then contacted them and they accepted. Elon wanted to know what their plans were for the future and the miners wanted to understand his concerns. We wondered how to be the good guys on the environmental issue.
I think bitcoin is a great way to recycle wasted energy and we have a great story to tell. […] I saw a tweet today that suggested that bitcoin runs on 2-3 times more renewable energy than other industries. This is an asset that we must pass on, but which must be backed up by solid data. ”
The journalist then insisted on the fears of the bitcoiners imagining (rightly) that this meeting could turn into some kind of agreement with dark designs.
“All participants in this meeting, including Elon, are fervent supporters of decentralization. The only reason we have had this meeting is that we want to ensure the success of a decentralized cryptocurrency. The source of decentralization is the use of energy. The threat that exists for bitcoin is the sustainability of the energy it consumes. […] We need to make sure that people hostile to BTC and the crypto industry don’t set the narrative mainstream for lack of verifiable data.
Some expressed concern that this meeting took place behind closed doors. If this meeting had been secret, I would not have told millions of people about it. I’ll tell you what happened during the meeting. Elon met the miners. The miners talked about their approach to energy and their commitments to sustainable development. We asked Elon for his advice, how we might handle the media concerns. And we talked about how to collect the energy consumption data. “
Michael gave the same speech at CNN’s microphone for a 7-minute recap from his own mouth:
It emerges from this interview that Michael Saylor went to the front to defuse the controversy. He offered Elon Musk a chance to get back on track. To see if the billionaire will continue to feel the soul of a large blocker while pumping the Dog coin …
Journalist / Bitcoin, geopolitics, economy, energy, climate
The comments and opinions expressed in this article are those of the author alone, and should not be considered as investment advice. Do your own research before making any investment decisions.