Tesla’s CEO, Elon Musk, has implied that there is a high possibility that Tesla will soon start accepting cryptocurrencies as a fee for its cars. Tesla is among a number of companies who had started accepting crypto as payment in the past, but stopped a few weeks after its announcement. Tesla’s choice to stop taking bitcoin as payments from customers sent the price of bitcoin crashing.
If Tesla had started receiving bitcoin as payment and buyers could change their fiat currency to bitcoin on trading platforms, why did they stop?
WHEN DID TESLA SAY THEY WOULD START ACCEPTING CRYPTOCURRENCY FOR PAYMENT?
Unlike before, Elon Musk did not tweet about Tesla’s cryptocurrency payment plans; the probability of Tesla accepting cryptocurrency as payment came in its quarterly financial filing in September.
The quarterly filing with the Securities and Exchange Commission (SEC) is a financial statement showing how a company has fared during a period, usually four months. In the September filing to the SEC, Tesla said that it was considering accepting cryptocurrency as payment for Tesla products.
Tesla is not the first major multinational brand that has plans of accepting cryptocurrencies as payment for goods. Retail giant Amazon, rumours have it, is also considering accepting cryptocurrencies payment for goods on its platform.
However, in the case of Amazon, they (Amazon) is considering developing an Amazon native token that buyers and sellers can use on the platform, to buy and sell goods.
But with Tesla, there are no plans, at least for now, of developing a Tesla native token.
Still, native tokens or not, this isn’t Tesla’s first attempt at accepting digital currencies as payment. They accepted Bitcoin in the early months of the year.
Some months ago, Tesla announced, through Elon Musk’s twitter handle, that they would be accepting payment for goods via bitcoin. In light of that announcement, Elon Musk bought bitcoin of over $1.5 billion in the early months of 2021.
But just months after the announcement, Tesla stopped accepting bitcoin as payment.
WHY DID TESLA STOP ACCEPTING BITCOIN?
When Tesla started collecting crypto for payment, they paved the way for other top companies around the world to do the same. Tesla is a leading brand, with stock prices rising daily, it was only natural that other brands saw their endorsement of bitcoin as good and thus followed suit. Or at least had plans of doing the same: accepting crypto for payment.
But no sooner had Tesla started accepting bitcoin as payment than they stopped.
And why did they stop?
According to Tesla’s CEO Elon Musk, receiving bitcoin as payment, given its environmental effects, was hypocritical of him and the Tesla brand. Bitcoin was detrimental to the environment. The proof of work protocol that bitcoin uses has deleterious environmental impacts. The amount of energy required to mint one bitcoin is huge, and this causes a lot of carbon monoxide to be released into the atmosphere.
The super computers and mining equipment that miners use causes the carbon footprint of wherever the mining is to increase.
The world is fighting against climate change, and Elon Musk, a man obsessed with seeing that space becomes just as habitable as earth, doesn’t think supporting bitcoin payment is in tandem with his environmentalist ideologies.
Tesla stopped accepting bitcoin as payment, and the market was significantly affected by its decision. Bitcoin’s price fell by 6% in one hour on major exchanges such as Redot.com.
WHAT HAPPENED AFTER ELON MUSK’S ENVIRONMENTAL CONCERNS?
Elon Musk’s tweet caused miners, bitcoin enthusiasts and top mining companies to seek ways to have a roundtable conversation about the environmental impacts of mining. Miners and blockchain developers have proposed strategies that can be employed to reduce the environmental impacts of mining, one of such strategies is proof of stake, a validation protocol that uses less energy.
Elon Musk has not openly declared that he approves of bitcoin and its mining processes. However, he opined that Tesla is ready to start using other cryptocurrencies that use renewable energy and those whose gas fees are very low compared to bitcoin.
SINCE NO BITCOIN, WHAT DIGITAL ASSET IS ELON MUSK SUPPORTING?
Elon Musk has been rallying behind meme-coin dogecoin, tweeting about its future and encouraging his followers to buy doge.
Elon has always, in several tweets before, said that he stands firmly behind the dogecoin project, even proposing that should he finally decide to build a technology university, dogecoin will be used for paying school fees.
TESLA HAS DEDICATED TO CRYPTOCURRENCY
Tesla’s belief in the possibility of cryptocurrency being used as a currency is strong. The company has tweets where it says that it is committed to cryptocurrency’s potential to revolutionize the financial world.
In June, Elon Musk made it known that Tesla was ready to commence receiving bitcoin again when miners start using renewable energy in its mining. It is great that Musk must be a proponent for renewable energy, but there are some documented effects which renewable energy has on the environment, no matter how perfect it may seem.
Some of these issues include the long-term environmental impact of the technology used to design the equipment used in renewable energy. For example, the battery used to power solar panels has long-term impact on the environment. So, while it is commendable that bitcoin miners are seeking other forms of renewable energy, the effects of these alternative methods are often left unsaid.
The truth is that renewable energy is not as clean as many think, or as it has been reported.
There are miners around the world who already use renewable energy to power their computers, but the numbers are still small when compared to those still using non-renewable energy sources.
There is no concrete information on the cryptocurrency that Tesla would use, but the signs, from Elon Musk’s tweet and support for dogecoin, point towards dogecoin.
So, why does Elon Musk love dogecoin?
The reasons for Musk’s love for dogecoin could be that:
- Elon Musk just loves having fun, and since dogecoin is a meme coin with a low point of entry which allows people without plenty of money to access it with the biggest market capitalization.
- It could also be that the low transaction fee and energy the meme coin uses are a big attraction for Elon Musk.
- Then, there is the growing dog community. The dogecoin community is growing daily as people become more interested in meme coins, buying and holding dogecoins in several wallets across the world.
While the reasons listed above are valid, the more logical reason why Elon Musk, who was voted on Twitter as Dogecoin’s CEO, supports dogecoin and might make it the official cryptocurrency for Tesla payments is because dogecoin uses smaller energy for its deals, and processes deals fast with low transaction fees. As an environmental activist, Musk’s commitment to a safe earth had never been in doubt. What started as a joke might be the real deal, soon.