The Key Takeaways From Elon Musk's Bitcoin Meeting with Jack Dorsey

The ten-hour event featured a number of well-known and knowledgeable speakers, including Jack Dorsey and Elon Musk. Some of their arguments in support of Bitcoin and what makes it unique are outlined below.

“The B Word,” a day-long Bitcoin-centric online event hosted by the Crypto Council for Innovation and sponsored by Square and ARK Invest that aired on Wednesday, aimed to “correct mainstream narratives around Bitcoin, explain how institutions can embrace it, and raise awareness around areas of the network that need support.”

While the conference had many inspiring speakers and lively conversations throughout, the first two tracks offered some of the most important contributions to the current public debate on Bitcoin. They do a good job of addressing and assuaging public worries over the network's image in recent months, while also refocusing viewers' attention on what makes Bitcoin such a vital technology.

The most crucial parts of these two tracks are described below, including key details from Elon Musk, Cathie Wood, and Jack Dorsey's long-awaited conversation.

Nic Carter debunks the myth that bitcoin wastes energy.

Nic Carter, co-founder of Coin Metrics, addressed and disputed the prevalent allegation that Bitcoin wastes energy or is damaging to the environment in the first track, titled "Demystifying Bitcoin."

He begins by defining "waste" as a cost-benefit analysis. Only if the resources it uses surpass the utility it gives can something be termed wasteful– yet Bitcoin surely has utility:

“Bitcoin has a valid claim on some of society's resources as a neutral, global monetary network.”

Bitcoin is also remarkably, and increasingly, powered by renewable energy, and miners are rewarded for doing so. Carter's calculations range from 34 to 46% sustainable energy utilization, albeit accounting for barely 0.1 percent of global CO2 emissions.

Furthermore, as Chinese miners are being ousted, hash power is likely to cluster in more politically stable and carbon-intensive locations like the United States, Canada, and Northern Europe. In the long run, this will surely lower carbon intensity across the network.

Arjun Balaji debunks the myth that Bitcoin is unscalable

Arjun Balaji of Paradigm hosted a segment of track 1 where he dispelled the notion that Bitcoin cannot grow to settle transactions for billions of users.

He dismissed the notion that Bitcoin's blocksize should be increased to handle higher transaction volumes, arguing that doing so would jeopardize Bitcoin's decentralization by making it harder for the average person to maintain a full node.

Instead, he claims that Bitcoin can scale by layering. Deferred settlement, which is eventually secured by the base layer, is used by technologies like the Lightning Network to scale settlement assurance.

“Bitcoin is a settlement network that scales in ‘layers' like an onion.”

Users can choose from a variety of mechanisms to settle transactions, including sidechains and Bitcoin banks, all of which have different costs in terms of decentralization, security, and scalability.

“Bitcoin Ownership is Concentrated,” according to Nate Madrey, is a myth.

Nate Madrey, a research analyst at Coin Metrics, debunks the assumption that Bitcoin is overly concentrated in the hands of whales in Track 1 of the podcast.

This idea is frequently propagated by false headlines based on publicly available blockchain data showing a small number of addresses with large amounts of Bitcoin inside.

A Bitcoin address, on the other hand, does not always represent an individual. It might be an exchange, a financial institution, or a multisig wallet that uses a single address to represent hundreds or even thousands of people. Furthermore, many of the aforementioned "whale" addresses are dead wallets, perhaps belonging to persons who accumulated a large amount of bitcoin in the past but have since lost their keys.

In addition, when compared to other cryptocurrencies like Ethereum and Dogecoin, Bitcoin has the most consistent distribution across all percentiles. This is largely due to Bitcoin's proof of work consensus mechanism, which requires Bitcoin's first recipients—miners—to swiftly sell a considerable portion of their Bitcoin in order to meet the costs of maintaining their businesses, so helping Bitcoin spread on the open market.

Cathie Wood, Jack Dorsey, and Elon Musk discuss ‘The Talk'.

While many expected a heated fight between the two tech titans, the reality was a cordial discussion among three people who are united in their support for Bitcoin's development and adoption, including Musk.

The three began by discussing what piqued their interest in Bitcoin in the first place. It was a combination of disruptive innovation, economics, and widespread misunderstanding, according to Cathie Wood, CEO of Ark Invest.

Tesla's Technoking, Elon Musk, expressed interest in backing something that increases the quality of data used to sustain the economy.

When Dorsey, the CEO of Square and Twitter, first saw Bitcoin in 2009, he saw “a possibility to rebuild the whole foundation” of the financial system, which he claims “cause[s] so much distraction and so much cost.”

In response to earlier statements, Dorsey went on to explain why Bitcoin "changes everything." Because transactions can be verified by anybody, and the network is not controlled by any one state. He sees it as the internet's future currency.

“It can be owned by anyone. They have the ability to verify it for themselves. You don't have to trust anyone going in, and everybody can help influence the future of it, and it's not controlled by any government, bank, or corporate... it's a fantastic thing.” - Jack Dorsey, Twitter

From an economic standpoint, Wood sees Bitcoin as beneficial. When asked about Bitcoin's 21 million supply cap by moderator Steve Lee, Wood noted that it permits Bitcoin to serve as a store of value– one of the three functions of money– by avoiding inflation. She also feels that Bitcoin will serve as a medium of exchange as more apps are built on top of its technology.

“For the first time in history, a global monetary system founded on laws... Cathie Wood says, "This is a huge concept."

In contrast to some of his recent Twitter comments on the subject, Musk had a good perspective of Bitcoin during this discussion. He recognized that a fully executed second layer solution would allow bitcoin to “scale to do a large number of transactions” while criticizing its tiny block size.

Most notably, he's admitted that Bitcoin mining is gradually returning to sustainable energy sources, and that as a result, Tesla may resume accepting Bitcoin purchases.

Currently, the three speakers agree that the Bitcoin network's usability is a problem. Developers are already working on alternatives, including Dorsey's Square, which is now developing a Bitcoin hardware wallet.

Conclusion: Bitcoin's Future Is Bright

Finally, all three revealed their expectations for Bitcoin in the future. Wood believes that “the combination of blockchain and AI will revolutionize the world in ways we can't even imagine.” Musk wants to see bitcoin “improve the efficiency of the information system we call money” in order to achieve a “better level of living.” The hopes of Jack Dorsey are the highest of all:

“My aim is that [Bitcoin] contributes to global peace. We have all of these violent monopolies, and the distractions in our monetary systems are real.”

The discussion achieved the conference's main goal of "explaining how institutions can embrace Bitcoin and how we can all assist the network." The fact that such large businesses are pledging their support for the network, allocating resources to it, and clearing the air regarding widespread misunderstandings about it may help to restore confidence in the Bitcoin market.


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