Weeks after it announced buying $1.5 billion worth of bitcoin as well as its endeavour to accept cryptocurrency as a payment alternative, Tesla’s Technoking – Elon Musk, makes it official.
Musk made this known in an announcement on Wednesday where he revealed that people can now possibly buy a Tesla vehicle in the U.S. with bitcoin.
While the announcement isn’t surprising, it is coming sooner than expected, giving that the initial revelation about the move was made just last month.
Although Tesla updated its support page to include the right information on how to pay with bitcoin, Musk went through his typical route to announce the new development on Twitter.
You can now buy a Tesla with Bitcoin
— Elon Musk (@elonmusk) March 24, 2021
“You can now buy a Tesla with bitcoin,” Musk, who asked to be addressed as “Technoking of Tesla,” tweeted on Wednesday.
While the option is currently limited to the customers residing in the U.S., Musk claimed others would be able to buy Tesla e-vehicles with bitcoin later this year.
In the meantime, please familiarize yourself with what it means to buy a Tesla with bitcoin.
Tesla will use internal and open-source software to enable smooth cryptocurrency transaction
Dealing or transacting with cryptocurrency (bitcoin) as a corporate company requires more security infrastructure and optimization.
As for Tesla, Musk informed that the company would be using both “internal” and “open-source software” to receive bitcoin payment.
Although he didn’t dive deep into how it works, Musk added that Tesla “operates bitcoin nodes directly.”
The implication of this is that Tesla will verify every transaction while avoiding multiple payments of cryptocurrency by customers.
What happens if you make multiple payments?
Concerning multiple payments, Tesla, in its refund policy, however, cautioned buyers that should they seek a refund, Tesla may choose to pay them back in U.S. dollars.
What this means is that customers can receive the lesser value of what was paid initially or if so lucky, receive a bigger value than what was initially paid.
However, Tesla may be out for the profits in most cases; hence, customers who seek refund may be underpaid, or at best, paid the equivalent of the amount that was paid initially in USD.
For some reason, this doesn’t sound right – more like a gamble, but it is quite understandable, giving that it’s only a function of refund, and as expected on the company’s terms and condition.
Like us, many also feel that Tesla was very quick to implement the new payment procedure, which has attracted mixed reactions from experts.
“This is a seminal moment for Tesla and for the crypto world with Musk now cutting the red ribbon on Bitcoin transactions within the broader Tesla ecosystem,” Daniel Ives, an industry expert, said.
“We expect less than 5% of transactions to be through bitcoin over the next 12 to 18 months; however, this could move higher over time as crypto acceptance starts to ramp over the coming years,” he added.
Musk is a strong believer in bitcoin
Experts have seen Elon Musk’s interest in bitcoin to go oddly against the core purpose of Tesla as an environmental-friendly car company.
According to research carried out by the University of Cambridge, bitcoin mining consumes more electricity annually than the whole of Argentina.
Also, it was discovered in a publication by Nature – one of the most prestigious academic journals globally – that bitcoin emission alone could push global warming above 2 degrees Celsius.
As much as this could pose as bad marketing for Tesla, Musk does not seem bothered about the potential implication of the natural hazard that has been associated with bitcoin.
Instead, Musk remains one of the few major tech CEO to have embraced bitcoin and, evidently, one of the very few to have integrated it as a transactional model on a large scale.
In doing this, Musk has steered a lot of interest over the past few months, especially with his numerous tweet about cryptocurrency.
Interestingly, Musk is highly reckoned with when it comes to trading, and he has – on several occasions – successfully influenced major trading positions.
“Musk is now tied to the bitcoin story in the eyes of the Street and although Tesla made a billion paper profit in its first month owning the digital gold, it comes with added risk,” Ives added further.
Tesla announced the purchase of $1.5 billion worth of BTC when the cryptocurrency was valued at around $37,000; as at the time of this publication, bitcoin is valued at $53,176. You can do the maths!
There are mixed reactions about Tesla’s association with bitcoin
Not so many think that Tesla’s association or investment in bitcoin is a profitable one.
On the odd side of the reactions, some investors are pretty much convinced that Tesla and bitcoin are both in bubble territory.
While their opinion is not totally out of place, such could be seen playing out nicely in terms of the high volatility rate at which Tesla’s market value swings back and forth.
For instance, Tesla’s market value rocketed to about $800 billion across the 12 months ending January 2021; however, it dropped below the $600 billion mark in February. It currently stands at $635 billion.
While the future remains unpredictable, Tesla has shown so far that cowardice is not an option when it comes to innovation.
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