Elon Musk, the “Technoking of Tesla”, used Twitter to post some information that people who love cryptocurrency will probably enjoy. His tweet said: “You can now buy a Tesla with Bitcoin.” In a second tweet wrote: “Pay by Bitcoin capability available outside US later this year.”
CNBC reported that Tesla revealed last month that it had bought $1.5 billion worth of bitcoin and that it would soon start accepting the world’s most popular cryptocurrency as a form of payment. According to CNBC, Tesla’s electric vehicles typically cost between $37,990 and $124,000 before tax.
Tesla’s image as an environmentally-friendly car company sits at odds with the bitcoin network’s colossal carbon footprint. Researchers at the University of Cambridge found that it uses more electricity on an annual basis than the whole of Argentina. A 2018 paper published in Nature, arguably the most prestigious academic journal in the world, found that bitcoin emissions alone could push global warming above 2 degrees Celsius.
The Verge reported that according to Tesla’s bitcoin payment terms and conditions, its cars will continue to be priced in US dollars, and customers who choose to will pay the equivalent value in bitcoin. According to The Verge, Tesla estimates that a $100 deposit paid today equals 0.00183659BTC, for example.
Gizmodo pointed out something that was not explained by either Elon Musk or Tesla. Will Tesla price its cars based upon the number of bitcoins or paid for the fiat conversion of the time? If Tesla starts charging, for example, one bitcoin for a car, that will be the equivalent of roughly $56,000 today, but could be much higher or lower tomorrow.
Personally, I think bitcoin, and other cryptocurrency, are a gamble. The price can rapidly fluctuate based on unpredictable circumstances. It can be said that real currency can also do that. The difference is that the U.S. dollar has value because a society of people have agreed to treat it as though it has value. There is no such agreement connected to cryptocurrency.