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Elon Musk sent cryptocurrency markets into a tailspin on Wednesday when he posted a statement on Twitter under the header, “Tesla & Bitcoin.”

The notice marked a U-turn for the electric automaker. Tesla, which drove a crypto rally by buying Bitcoin earlier this year, would stop accepting the digital money as payment for vehicles. “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” CEO Musk said.

Bitcoin’s price plummeted more than 12% in the aftermath, and it is now trading below $50,000—though still up 400% over the past 12 months. “Cryptocurrency is a good idea on many levels and we believe it has a promising future,” Musk clarified. “But this cannot come at great cost to the environment,” he said, noting that Tesla would explore less energy intensive cryptocurrencies for payments. (Tesla added that it will not sell its remaining Bitcoin reserves.)

Members of the fractious cryptocurrency tribe, who had earlier celebrated Musk’s embrace, reacted with incredulity, defiance, wit, and many sales pitches. “[D]id you do any research on bitcoin before buying it,” posed Neeraj Agrawal, head of communications at Coin Center, a cryptocurrency-focused think tank, wryly.

“Everything is relative,” replied Binance, one of the world’s biggest cryptocurrency exchanges. The tweet pointed to a chart claiming that governments and traditional banking systems are vastly more expensive and consume far more energy.

“Elon … you realize that 75% of miners use renewable energy, right?” commented Anthony Pompliano, a cryptocurrency investor, presumably referring to figures recently put forward by an analyst at Ark Investment Management. “This story has been debunked over and over again,” he said.

The arguable wastefulness of Bitcoin mining—a process that rewards people who lend computing power to support the Bitcoin network—has long been a heated subject of debate. As Bitcoin has rocketed in prominence over the past year or so, so has the volume of critics who contend that Bitcoin mining devours electricity and poisons the atmosphere.

Enviro-activists have a point. Research by the Cambridge Center for Alternative Finance estimates that Bitcoin’s distributed computer network uses as much electricity as some small countries, such as Sweden or Malaysia. Bank of America analysts plotted the network’s growing energy consumption, which already exceeds companies like American Airlines, as my colleague Sophie Mellor wrote about here.

Crypto boosters push back. They highlight renewable energy resources miners are tapping, like unused hydro power, or otherwise wasted resources, like excess natural gas. In an April paper, Square and Ark Investments even argued, optimistically, that Bitcoin mining could “accelerate the energy transition” to cleaner power sources, like solar and wind.

Both sides make valid points. Among the most thoughtful considerations of the issue is a contribution by Nic Carter, a partner at Castle Island Ventures and former crypto analyst at Fidelity Investments. In a piece for Harvard Business Review, he dissects the many assumptions people make about Bitcoin’s climate impact. Which side a person ultimately takes depends, mostly, he argues, upon how one regards Bitcoin: Is it a valuable world-changing necessity, or vacuous world-destroying nitwittedness?

As he writes:

If you believe that Bitcoin offers no utility beyond serving as a ponzi scheme or a device for money laundering, then it would only be logical to conclude that consuming any amount of energy is wasteful. If you are one of the tens of millions of individuals worldwide using it as a tool to escape monetary repression, inflation, or capital controls, you most likely think that the energy is extremely well spent. Whether you feel Bitcoin has a valid claim on society’s resources boils down to how much value you think Bitcoin creates for society.

While the debate over Bitcoin’s costs rages on, rivals are vying for the spotlight. The price of Nano, a formerly overlooked project that claims to be behind a carbon-friendly coin, surged 50%. Cardano, another lesser-known crypto, popped too.

Plenty of cryptocurrency entrepreneurs seized the moment tout their own pet projects. Justin Sun, a big cryptocurrency investor, highlighted his Tron project as a Bitcoin alternative. Arthur Breitman, co-creator of Tezos, recommended Musk explore “proof of stake” cryptocurrencies, like his own. And Bram Cohen, inventor of the supposedly eco-friendly Chia, suggested Tesla sell its Bitcoin completely.

Oh, and let’s not forget Dogecoin. Billy Markus, a creator of the dog-themed cryptocurrency cheekily beloved by Musk, offered, “if only there was a merge mined cryptocurrency that had a much smaller carbon footprint than bitcoin, and also had a dog on it 🤔🤔.”

Maybe! After all, Musk did recently poll his Twitter followers about whether Tesla should accept Dogecoin payments. (The majority voted “yes.”) Then again, Dogecoin, like Bitcoin, uses “proof of work” mining—even if it is less voracious than Bitcoin, it’s not an overwhelming improvement.

If I were a betting man, I would wager Musk is taking a good, hard look at Ethereum right about now. The cryptocurrency project is set to switch from proof of work to so-called proof of stake mining, a technological upgrade that could drastically reduce its environmental footprint, in the coming months. As the world’s second-most valuable and popular cryptocurrency, it’s the most obvious choice.

Assuming the update succeeds.

Robert H. Hackett

@rhhackett

robert.hackett@fortune.com

***

I’m hosting a virtual event next Thursday that you can sign up for here. I’ll be chatting with cybersecurity experts from Accenture, HP, MedSec, and The University of Texas at Dallas about the recent Colonial Pipeline hack, the threat of ransomware, and tips to defend against cybercrime. Tune in from 1 to 2 p.m. ET on Thursday, May 20. Registration is open.

DECENTRALIZED NEWS

Credits 🚀

Coinbase reported earnings ... The results were a narrow miss, but still impressive ... Palantir is considering adding Bitcoin to the balance sheet ... Goldman Sachs suit quit after scoring big on Dogecoin ... Square wants to beat back crypto patent trolls ... Corporate card startup Brex adds crypto rewards ... Beijing wants to be the blockchain capital of the world ... Alibaba's Ant Group expands digital yuan trials ... Ethereum hits new record highs ... The Internet Computer, which aims to decentralize Amazon Web Services, debuts at $45 billion ... Another crypto, Nano, rises 50% ... New crypto exchange Bullish counts Peter Thiel as a backer ... Everything you might want to know about corporate crypto accounting ... PayPal taps Google Cloud ... Samsung Galaxy phones make crypto easier ... TikTok tests in-app purchases ... Fintechs love teens ... Blockchain gaming studio Forte valued at $1 billion ... The New Yorker profiles Robinhood ... Google Pay lets you send money to India ... Ethereum creator Vitalik Buterin donated $1 billion of Shiba Inu Coin to Indian COVID relief.

Debits 🐻

Bitcoin plunged after Tesla paused car purchases citing environmental concerns ... The price of Shiba Inu Coin—a Dogecoin knockoff—plummeted after Buterin's Indian COVID relief donation ... The Facebook-led Diem Association, née Libra, withdrew its application for a Swiss payments license as it focuses its initial rollout solely in the U.S. ... Microsoft to close its Azure blockchain service ... Tax-related location tracking apps for the IRS ... Crypto firms rush to hire lobbyists ... "lemme go do crypto where it’s easy and no one else knows it" ... PPP loans shredded Kabbage ... Simple bank app shutdown goes awry ... Fake apps steal your money ... Tor network abused for crypto scamming ... Muddy Waters shorts insure-tech Lemonade because it "does not give a fuck about securing its customers’ sensitive personal information" ... Bill Ackman is "kicking himself" for not understanding crypto ... Grimes says she had a panic attack after Dogecoin-themed SNL afterparty.

FOMO NO MO

Conventional valuation is also useless for cryptocurrencies which earn no interest, rent or dividends. Instead, advocates claim digital currencies will displace the fiat currencies issued by central banks as a transaction medium and store of value. “Crypto has the potential to be as revolutionary and widely adopted as the internet,” claims the prospectus of the initial public offering of crypto exchange Coinbase Global Inc., in language reminiscent of internet-related IPOs more than two decades earlier. Cryptocurrencies as of May 7 were worth $2.4 trillion, according to CoinDesk, an information service, more than all U.S. dollars in circulation.

You read that right: The total market value of all cryptocurrencies—$2.3 trillion— recently surpassed the value of all U.S. dollars in circulation—$2.16 trillion—as the Wall Street Journal observes. The point features in an article examining what might happen to stocks and cryptocurrencies should the Fed's money printer stop going brrr.

The usefully forward-looking piece is part of a package of stories the Journal calls "The Great Cash Splash," published this week. Other stories in the set include, "From Dutch tulips to Internet stocks, how to spot a financial bubble" and "If crypto crashes tomorrow, it's no big deal. In five years, it might be." All are worthwhile.

BUBBLE-O-METER

4.2%

The rise in the Consumer Price Index (CPI) for April versus a year earlier, as reported Wednesday by the U.S. Labor Department. CPI measures the change in price for a basket of day-to-day living expenses across food, energy, and housing, and it is one of the most reliable gauges of inflation. The headline figure surprised many market watchers; it's the biggest spike since Sept. 2008.

Lael Brainard, a Federal Reserve governor, said she regards the surge as "transitory" and expects a return to normalcy in coming quarters. In others word: Expect no sudden changes to the Fed's monetary policy, its bond-buying, nor its general pandemic economy-propping up program. Bitcoiners are keeping a close eye on CPI as they look to their precious digital gold as a possible, wealth-preserving inflation hedge, despite its incredible volatility.