Bitcoiners Aren’t Thrilled with Elon Musk’s New Mining 'Council'

“I hope he sells his Bitcoin and goes away," said Peter McCormack, host of the What Bitcoin Did podcast.
May 26, 2021, 7:24pm
Bitcoiners Aren’t Thrilled with Elon Musk’s New Mining 'Council'
Image: Bloomberg / Contributor via Getty Images

Elon Musk was briefly a hero in the cryptocurrency space. The terminally online, Dogecoin-meme-sharing CEO boosted Bitcoin’s price when Tesla announced in February that it had invested $1.5 billion into the leading crypto, and would also accept BTC as payment for its electric cars.

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But that reputation was shattered this month when Tesla reversed course. Musk said that concerns about Bitcoin mining’s environmental impact—hardly new information, although apparently it was to him—had caused the firm to stop accepting BTC until “mining transitions to more sustainable energy.” Bitcoin’s price sank immediately and dramatically, and his myriad follow-up tweets about Bitcoin and aiding Dogecoin’s development only managed to piss off the faithful even further.

His latest moves in the space aren’t faring much better with Bitcoiners. On Monday, Musk tweeted that he “spoke with North American Bitcoin miners,” and said that they had “committed to publish current & planned renewable usage” and would push for adoption of such practices by worldwide miners. The group, organized with MicroStrategy CEO Michael Saylor (MicroStrategy is the largest known corporate holder of bitcoins), is called the Bitcoin Mining Council and includes executives from companies such as Riot Blockchain, Blockcap, and Galaxy Digital.

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“The miners have agreed to form the Bitcoin Mining Council to promote energy usage transparency & accelerate sustainability initiatives worldwide,” Saylor tweeted. “[They] decided to establish an organization to standardize energy reporting, pursue industry [environmental, social, and corporate governance] goals, & educate+grow the marketplace.”

Decentralization is at the heart of Bitcoin, which operates on a network of thousands of distributed nodes around the world with no controlling entity. Although the Bitcoin Mining Council may seem well-intentioned, the mere thought of billionaires and industry heavy-hitters teaming up to potentially alter the future course of Bitcoin rankled some enthusiasts. Publishing energy transparency reports is fairly innocuous, even good, but Bitcoin has seen past efforts by miners and firms to collude to force through controversial network changes.

While that is not what has been proposed by the Bitcoin Mining Council, Bitcoiners bristle at any sort of centralized play in the space, such as a potential OPEC-like effort to strong-arm control of mining. Some see the Mining Council as simply a way to appease Musk and get past the recent Tesla-induced market hit, or to combat misconceptions around Bitcoin’s energy use in general, while others fear the worst.

“All of you cheering for the centralization of Bitcoin mining is the most ridiculous thing I’ve ever seen, and I’ve seen a lot,” tweeted Meltem Demirors, chief strategy officer of digital asset management firm CoinShares. Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, told CoinDesk that the forming of the council opened an “interesting can of worms,” and suggested that having such a group for a decentralized network was a “definitional issue.”

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Peter McCormack, host of the popular What Bitcoin Did podcast, has been one of the most outspoken advocates against the Mining Council and Musk’s growing influence on Bitcoin’s trajectory. 

“The issue that concerns me most about the Mining Council is that the meeting was established to appease Elon Musk, who after being in Bitcoin for 5 minutes, continues to spout incoherent nonsense regarding the currency,” McCormack told Motherboard.

Although McCormack tweeted that “Saylor is a good egg,” he has been pointed with his criticism of the Mining Council. He told Motherboard that Musk’s own “energy agenda is highly suspicious” given Tesla’s dependence on energy credits for profitability, and suggested that Musk refuses to accept education and help from Bitcoiners. McCormack isn’t buying the need for the Bitcoin Mining Council, nor the value of Musk as an industry advocate.

“The whole thing is highly disappointing, as he is making the work of those promoting human and financial freedom more difficult,” said McCormack. “I hope he sells his Bitcoin and goes away.”

Saylor insists that there is nothing untoward going on here. The laser-eyed Bitcoin aficionado appeared on CoinDesk’s Consensus streaming conference on Tuesday, and claimed that the Bitcoin Mining Council is designed to wrest back the narrative from people who are “hostile to Bitcoin,” particularly in the media. He also suggested that concerns over Bitcoin mining’s energy consumption were an “existential threat” for the cryptocurrency, and pushed back against the idea of behind-the-scenes collusion.

“If it was a secret meeting, I wouldn’t have told millions of people the next day that it was a secret meeting, trust me,” Saylor quipped.