Early in the morning, March 24, Tesla CEO Elon Musk announced via his Twitter that the company's customers can now pay for cars purchase with Bitcoins. On February 8, from the 8-K form filed with the SEC, it became known that the company has acquired $1.5 billion in Bitcoin cryptocurrency. Tesla also promised to start "accepting bitcoin as a form of payment for our products in the near future," and is now following the plan. At the moment, this option is only available in the United States, but will be introduced in other countries throughout the year.
You can now buy a Tesla with Bitcoin— Elon Musk (@elonmusk) March 24, 2021
Musk stressed that Tesla will not exchange the received Bitcoins for traditional currencies, which also corresponds to one of the cases described in the company's statement from the 8-K: "subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt." The purchase and storage of cryptocurrency by Tesla is an updated investment policy to give the company more flexibility to further diversify and increase the return on its cash.
In recent years, Bitcoin has become an investment product, especially after its explosive growth in late 2017. Most investors use it as a store of value, calling it "digital gold," however there are already many services that allow making payments using Bitcoin and some other cryptocurrencies. For this purpose, separate third-party payment systems were created. When a client buys a product, he or she pays for it with Bitcoin at the address of a digital wallet (provided by the exchange service). After that, the owner of the wallet converts Bitcoin into fiat and transfers it to the account of the company that sold the product.
However, Tesla went the other way. The company uses only internal and open-source software and also operates Bitcoin nodes directly. Having its own node, Tesla achieves high security of transactions carried out by the user. This is especially important if the node owner plans to conduct multiple Bitcoin transactions per day. In this way, it also contributes to the overall security of the Bitcoin network.
Tesla is using only internal & open source software & operates Bitcoin nodes directly.— Elon Musk (@elonmusk) March 24, 2021
Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency.
The prices on the Tesla website are still quoted in US dollars, and when paying in Bitcoin, the buyer will receive the converted amount in cryptocurrency, which he must pay within a certain time window. Clients who have chosen Bitcoins as a means of payment should be extremely careful when entering the wallet address and amount, if an incorrect address is entered during the transfer, Bitcoins will be irretrievably lost, which Tesla warns about on the website.
© 2021, Eva Fox. All rights reserved.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.