Elon Musk cites a recent dip in mining hash power owing to flooding in China, claiming Bitcoin mining is centralized.
Musk offered a wrong stat to prove his claim and more importantly, the Bitcoin network’s decentralization comes from the network node.
Elon Musk has become the talk of the crypto town owing to his recent face-off with Bitcoiners on Twitter and a subsequent meltdown where he first made bizarre claims about Bitcoin’s ‘per-transaction’ cost and later even threatened to go all-in Doge. Among many claims, one that got the attention was his claim of centralization in Bitcoin mining where he pointed towards the flooding in Xinjiang that led to a rapid decline in the Bitcoin network’s hashrate. However, the claim that the hash power of the network dropped by 35% is outright false.
Bitcoin is actually highly centralized, with supermajority controlled by handful of big mining (aka hashing) companies.
A single coal mine in Xinjiang flooded, almost killing miners, and Bitcoin hash rate dropped 35%. Sound “decentralized” to you?https://t.co/Oom8yzGRNQ
— Elon Musk (@elonmusk) May 16, 2021
The actual drop was around 17% that bounced back soon after, not to forget the drop in mining hash power came to a couple of days after the actual flooding.
Also, most non-bitcoiners often confuse between the hash power input via mining pools as the criteria for centralization/decentralization while the actual decentralization comes from the nodes that are distributed across the globe and responsible for making the network more decentralized.
This map shows distribution of reachable #Bitcoin nodes found in countries around the world.
— Documenting Bitcoin 📄 (@DocumentingBTC) May 15, 2021
Musk’s claims of Bitcoin being bad for the environment has been debunked long back as the top cryptocurrency is pushing for the adoption of renewable energy. The energy consumption of the network would go down further with time as each halving cut the supply rate and subsequent network consumption. While Bitcoin is not perfect but it has surely evolved over the years to become more relevant every year and would continue to do the same with or without the support of celebrities. Musk is not the first celebrity Bitcoin buyer who tried to force his belief onto a community that has seen it all over the past 12 years and just like Roger Ver or Jhon McAfee failed eventually.
Musk Not New to Obnoxious Views and Comments
Elon Musk is not new to tweeting outlandish stuff and even getting fined by the authorities and even his own company’s board of directors, the only difference though, he has never received a push back this large and of such high magnitude as the Bitcoin community. Musk’s continuous shilling of Dogecoin and bizarre claims of increasing the block size by 100X and decreasing the fee by 100X seems to have gotten on the nerve of many since it doesn’t make much practical sense.
Musk’s meltdown on Twitter has made him an overnight villain for the Bitcoin community despite Musk clarifying that Tesla has not sold their entire Bitcoin stash as of now.