Bitcoin Hits New Remarkable Records After Tesla Investment
Tesla Payments for Electric Cars Could Also Be Made By Using Bitcoin In The Future
The cryptocurrency Bitcoin value has recently soared to a record high for two consecutive days after the electric car making firm Tesla, owned by Elon Musk, bought around $1.5 billion worth of the cryptocurrency. The worth of Bitcoin has risen above the value of $48 000 before it falls back to $45,470, although the worth has been increased about 28% from the previous amount in the last week.
This recent sudden move by Tesla is believed by some investors as a signal that in the upcoming future, Bitcoin would likely become a mainstream asset in finance. Meanwhile, the green automobile makers Tesla have experienced certain criticism, as they are heavily investing in an energy-intensive cryptocurrency.
According to an analytic report by the University of Cambridge, the cryptocurrency Bitcoin utilizes more energy than the entire country of Argentina in a single year since it has developed in the year 2009. The production of cybercash Bitcoin, which is also termed Bitcoin mining, requires large hardware in computers for efficient working and power for processing and thus requires a large quantity of energy to do so.
An editor working at the current affairs website TechCrunch tweeted that the electric car making company Tesla has sold carbon credits in return to buy the cryptocurrency Bitcoin, but the process of obtaining Bitcoin requires massive amounts of energy, which is equivalent to the amount of energy used by a small-sized country for mining purposes.
Tesla has explained the reason behind their large sum of investment in Bitcoin, which is to maximize the number of returns on cash that has been lying dormant for a long duration in the accounts of a company. In the future, Tesla is also looking forward to accepting payment for their electric vehicles in the form of Bitcoin.
This recent move by Tesla has sparked the interest in the market for Bitcoin, which has carried on for another day on Tuesday. The shares for those firms which provide a platform for trading purposes to Bitcoin along with the technology which is used for the mining of Bitcoin have observed a surge in South Korea, Australia, and China. Other tech giant firms that develop computer chips, including SK Hynix, have also risen due to the move.
From the year 2021 up till now, the worth of the virtual currency Bitcoin has observed an increase in about 62% in its total value, on top of a 300% rally in the past year of 2020, as the investing parties are looking in search of alternative assets for a time when the interest rates in multiple countries are experiencing a record low.
Bitcoin has observed interest from several large investment firms throughout the world, including companies like Blackrock, which have recently altered their mandates regarding investment in an attempt to allow some of their funds to be invested in the cryptocurrency.
Although, the central banks are still somewhat skeptical regarding digital currency like Bitcoin. In the month of October last year, the governor of the Bank of England, Andrew Bailey, has cautioned the public regarding the use of Bitcoin as a method for their payments, stating that the cryptocurrency lacks the intrinsic value which is seen in gold or cash payments. Meanwhile, some of the institutional investors are also suspicious of the volatility of the price for digital cash like Bitcoin.
Bitcoin and It’s working
Bitcoin is a form of cryptocurrency, meaning that it lacks any physical form. Instead of having paper money, this digital currency is usually traded with other people over a computer network. Bitcoin is currently operational on all networks across the globe, with millions of nodes, which work altogether for the processing and storing of transactions.
Bitcoin does not have any central banks located across the world for its control. This form of cryptocurrency also does not have any central points for the storage of all transactions that are being done across the region, meaning that the database of Bitcoin does not have any record to show the past transactions that have been made by using Bitcoin, leaving no paper trace behind for evidence.
Instead, Bitcoin is operating around the globe with network-based ob thousands upon thousands of nodes, which is used to store and process all transactions.
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