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.
Jack Dorsey and Jay Z have created an endowment to fund bitcoin development initially in Africa and India, TechCrunch reported. Jack Dorsey is the CEO of Twitter and Square, and Jay-Z is a rapper. TechCrunch also reported that the two have pledged 500 bitcoin – which is around $23.3 million – toward ₿trust.
On February 11, 2021, @jack tweeted: “JAY-Z/@S_C_ and I are giving 500 BTC to a new endowment named ₿trust to fund #Bitcoin development, initially focused on teams in Africa & India. It’ll be set up as blind irrevocable trust, taking zero direction from us. We need 3 board members to start:”
There appears to be good reason to focus on teams in Africa. According to TechCrunch, Africa (especially Nigeria) has experienced a surge in cryptocurrency transactions recently. Cryptocurrency offered protection against currency devaluation and for value exchange during cross-border transactions. Bitcoin is also useful for situations where the government shut down bank accounts.
India, however, might pose a problem regarding Bitcoin. Bloomberg Quint reported that India has introduced a bill called The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, to the ongoing Budget session of Parliament.
It is possible that the 500 BTC in the irrevocable trust could help people in Africa (who are already using Bitcoin.) It might not work out so well in India if their government is ready to ban Bitcoin.
CNBC reported about the downside of Bitcoin. It has a carbon footprint comparable to that of New Zealand, producing 36.95 megatons of CO2 annually, according to Digiconomist’s Bitcoin Energy Consumption Index. It also consumes as much power as Chile. The Cambridge Bitcoin Electricity Consumption index says Bitcoin produces 110.53 TWh, which is more than the entire annual energy consumption of the Netherlands.
I think that Jack Dorsey and Jay-Z mean well and want to help people by making Bitcoin available to them. The environmental cost of bitcoin is too high. Perhaps Jack Dorsey and Jay-Z can invest in something that wouldn’t harm the planet as much as cryptocurrency mining does.
The Department of Justice has arrested a man who allegedly was running a bitcoin mixing service on the dark web that helped criminals launder bitcoin transactions. ZDNet reported that this was the first case the Department of Justice brought against a bitcoin mixer.
The Department of Justice stated that Larry Harmon, from Ohio, was arrested for his operation of Helix, which the Department of Justice describes as a “Dark-net based cryptocurrency laundering service.” He was charged with money-laundering conspiracy, operating an unlicensed money transmitting business and conducting money transmission without a D.C. License.
According to the indictment, Harmon operated Helix from 2014 to 2017. Helix functioned as a bitcoin “mixer” or “tumblr,” allowing customers, for a fee, to send bitcoin to designated recipients in a manner that was designed to conceal the source or owner of the bitcoin. Helix was linked to and associated with “Grams,” a Darknet search engine also run by Harmon. Harmon advertised Helix to customers on the Darknet as a way to conceal transactions from law enforcement.
The indictment alleges that Helix moved over 350,000 bitcoin – valued at over $300 million at the time of the transactions – on behalf of customers, with the largest coming from Darknet markets. Helix partnered with the Darknet market AlphaBay to provide laundering services for AlphaBay customers. AlphaBay was one of the largest Darknet marketplaces in operation at the time it was seized by law enforcement in July of 2017.
When I hear the phrase “money-laundering”, it makes me think of physical money being sneakily transferred through various businesses and/or bank accounts. I had not considered that bitcoin could also be laundered, but it appears it is possible. I think that this precedent – that you can get arrested for laundering bitcoin – could make those who are currently doing it consider stopping.
Another interesting thing about this case is that it makes it clear that bitcoin isn’t really private. There are apparently ways for law enforcement to track where the bitcoins go, how many bitcoins go were transferred, and the people involved in transferring it.
Steam announced that it will no longer support Bitcoin as a payment method. This news is going to affect players who were purchasing Steam games with Bitcoin, but doesn’t appear to change things for those using other methods of payment.
Steam says it will no longer support Bitcoin as a payment method on their platform due to high fees and volatility in the value of Bitcoin. In the announcement, Steam points out: “Historically, the value of Bitcoin has been volatile, but the degree of volatility has become extreme in the last few months, losing as much as 25% in value over a period of days.”
This creates a problem for customers trying to purchase games with Bitcoin. When checking out on Steam, a customer will transfer x amount of Bitcoin for the cost of the game, plus y amount of Bitcoin to cover the transaction fee charged by the Bitcoin network. The value of Bitcoin is only guaranteed for a certain period of time, so if the transaction doesn’t complete within that window of time, then the amount of Bitcoin needed to cover the transaction can change. The amount it can change has been increasing recently to a point where it can be significantly different.
Steam points out that when that situation happens, they either have to refund original payment to the user to or ask the user to transfer more funds to cover the remaining balance. The user gets hit with a Bitcoin transaction fee either way. As a result, Steam says it has become untenable to support Bitcoin as a payment option.
Bitcoin, the cryptocurrency that started out as a technological curiosity, has grown rapidly in the last couple years. Bitcoin adoption has been on the rise, and this has prompted the development of tools and services that help Bitcoin users convert their digital money into real-world cash. Coinbase, one of the larger Bitcoin players in the market, described itself from the beginning as a “PayPal-like” service, where users could log in and convert Bitcoin to cash, or vice versa.
Expanding its efforts to make Bitcoin exchanges even easier, Coinbase recently announced it will be adding support for PayPal and credit cards. From a Coinbase e-mail sent earlier this week:
One of our objectives at Coinbase is to add as many funding mechanisms as possible to make exchanging digital currency easy. As a step in that direction, Coinbase now accepts PayPal (for bitcoin sells) and credit cards (for bitcoin buys).
It’s worth noting that Coinbase isn’t using both of these new services for everything. As the e-mail states. Coinbase users will be able to use PayPal when selling Bitcoin, and they’ll be able to use credit cards for Bitcoin purchases. Previously, Coinbase only conducted transactions thru registered bank accounts.
These new payment systems are currently in beta, but they are accessible to most Coinbase users.
Bitcoin. It’s the cryptocurrency some of us love, and some of us hate. It’s demise is being constantly predicted by tech pundits. Yet, it continues to endure. Despite what the naysayers think, there are plenty of companies trying to find ways to expand the reach of Bitcoin. Two such companies have now teamed up to release a new Bitcoin debit card.
Bitcoin exchange Coinbase recently joined forces with payment processor Shift. Together, they’re launching a Bitcoin debit card that carries the Visa logo:
Whether your currency is new or old shouldn’t matter. Bitcoin is now accepted online and offline at over 38 million merchants worldwide. Case closed.
The process is fairly simple. Load some Bitcoin into your Coinbase account. Sign up for the debit card thru Shift and then link the two accounts. Once everything’s done, you can now pay for virtually anything with Bitcoin where Visa debit cards are accepted.
If you’d like to make it easier to spend your own Bitcoin like “real money,” keep in mind that the Shift debit card does carry some fees. For example, there’s a $10 fee for the issuance of a plastic card (which also goes for replacement cards), there’s a $2.50 fee for using the Bitcoin card at an ATM, and a 3% fee for all international transactions. However, there are no annual fees or fees on domestic transactions. However, both Coinbase and Shift reserve the right to start charging fees on domestic transactions in the future.
You can learn more about the new Bitcoin debit card at the Coinbase blog.
Bitcoin is lauded by many as the currency of the future. Supporters say the cryptocurrency is superior to the dollar because Bitcoin is decentralized, allowing the system to stay honest as it’s constantly being authenticated by everyone who uses it. Bitcoin has also developed a bit of a reputation as being the currency of choice for illicit goods and services, mainly because Bitcoin transactions can be difficult to trace, making a true “anonymous” transaction much easier.
But despite all of its futurist appeal, Bitcoin is still vulnerable to some very old fashioned problems, as one man recently learned when he was robbed at gunpoint for $1,100 worth of Bitcoin. It might seem impossible that someone could be robbed in the real world for something that’s essentially virtual. But many Bitcoin users will meet up in person to ensure their electronic transaction goes thru smoothly. It was during one such meeting that a Brooklyn man discovered trading in Bitcoin can be just as dangerous as using cash.
No details have been made public about the specifics of the transaction. But the man went to a prearranged destination and met with another man to make the transaction. There, he was led to a parked car in order to finalize the deal. Once inside, the other man allegedly pulled a gun and ordered the first man to send the Bitcoin. The robber then stole the man’s cell phone and took off.
Fortunately, no one was hurt during the robbery. But the incident shows why it’s important to be safe during any kind of personal transaction, regardless of the currency being tended. Always meet others in neutral, public places such as coffee shops or even police stations. If you’re trying to make an arrangement with someone else and they refuse to do this, they’re probably up to no good.