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Tesla buys $1.5B in Bitcoin, may accept it as payment in the future

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Re: Tesla buys $1.5B in Bitcoin, may accept it as payment in the future

#881

So... what is Tesla going to spend that BTC on when the time comes? They can't use it to pay wages or purchase materials. What kind of assets could Tesla possibly trade $1.5B in BTC for? I like the idea of cryptocurrency, but right now it seems to be more like a stock than an actual currency. There isn't much you can do with it still other than trade it back and fourth for other currencies. And I've never heard of a…

> I've never heard of a company making an investment like that in a stock.

It's commonplace for companies to invest cash in all sorts of things, including stocks, commodities, real-estate and other (fiat) currencies. Some of this is hedging against currency fluctuations, and some is speculative investing for gains.

If Tesla had invested $1.5B in stocks or commodities etc, they couldn't use those to pay for wages etc either. Presumably they view Bitcoin as an investment, and plan to later exchange some/all for fiat currencies, just as you would with stocks or commodities.

Re: Tesla buys $1.5B in Bitcoin, may accept it as payment in the future

#882

Bitcoin is a mystery to me. Somehow it's hailed as revolutionising the economy, by replacing currency with a worse kind of currency. It feels like this is where all the "how to get rich quick" book writers and other hustle bros went and created one giant financial pyramid, which works in quite simple way: - buy bitcoin - tell everyone around how revolutionary it is, so they buy it and what you holding increases in va…

Initially it was meant to be used as currency, but it's become more of an asset class now, mainly used as a store of value, similar to gold. Do you know how difficult it is to get millions of people to agree that something is a store of value, not only agree, but to put their money where their mouth is? THIS is why bitcoin is where it's at.

It happens periodically: tulips, Beanie Babies, etc.

Re: Tesla buys $1.5B in Bitcoin, may accept it as payment in the future

#883
post #489

Earlier quoted context omitted.

While away on vacation, I once sent $1000 in cold hard cash, on a Sunday, to an unbanked person in Los Angeles, in less than 1 hour, thanks to bitcoin and the recipient withdrawing it for cash at a Bitcoin ATM. There is not a single alternative service in the world that would have made this possible. If people thought a little beyond their personal use cases, they would understand the utility of Bitcoin/crypto for ma…

> to an unbanked person Who in this modern era is unbanked and how did that unbanked person turn around and spend the $1,000 in BTC you sent them?

[deleted]

Re: Tesla buys $1.5B in Bitcoin, may accept it as payment in the future

#884
post #94
post #81

Earlier quoted context omitted.

Tesla is not about being good for the env. It's about making money. Same thing with SpaceX not being about going to Mars. It's about making money too! The going to Mars/ good for env stories are to get some public goodwill behind them from a certain crowd.

If we're being honest, SpaceX is designed to gobble up government contracts. That's it. That's the whole business model. If NASA offered contracts exploring the ocean depths then Elon Musk would be sinking Tesla's in submersibles.

Not only govt contracts. Also private satellite launches, their own satellite internet network, and prolly more.

Of there was an untapped market in deep sea, it might have been tapped by him as well. But judging from the oil+gas exploration there I think that's not quite as untapped (pun maybe intended).

Re: Tesla buys $1.5B in Bitcoin, may accept it as payment in the future

#885
post #489

Earlier quoted context omitted.

While away on vacation, I once sent $1000 in cold hard cash, on a Sunday, to an unbanked person in Los Angeles, in less than 1 hour, thanks to bitcoin and the recipient withdrawing it for cash at a Bitcoin ATM. There is not a single alternative service in the world that would have made this possible. If people thought a little beyond their personal use cases, they would understand the utility of Bitcoin/crypto for ma…

> to an unbanked person Who in this modern era is unbanked and how did that unbanked person turn around and spend the $1,000 in BTC you sent them?

He said “ATM”, they received it in cash.

Re: Tesla buys $1.5B in Bitcoin, may accept it as payment in the future

#886
post #489

Bitcoin is a mystery to me. Somehow it's hailed as revolutionising the economy, by replacing currency with a worse kind of currency. It feels like this is where all the "how to get rich quick" book writers and other hustle bros went and created one giant financial pyramid, which works in quite simple way: - buy bitcoin - tell everyone around how revolutionary it is, so they buy it and what you holding increases in va…

While away on vacation, I once sent $1000 in cold hard cash, on a Sunday, to an unbanked person in Los Angeles, in less than 1 hour, thanks to bitcoin and the recipient withdrawing it for cash at a Bitcoin ATM. There is not a single alternative service in the world that would have made this possible. If people thought a little beyond their personal use cases, they would understand the utility of Bitcoin/crypto for ma…

This is generally a false assertion of the value of BTC and exemplifies the mythos generally perpetuated by groups that have actually little or no understanding of what currency actually is.

+ Sending actual cash from A to B is not a complicated process.

+ We usually use 'banks' for this process, generally for very good reason, in particular, regulatory compliance, security and especially concerns over fraud and money laundering.

+ That banks create essentially a layer of bureaucracy is not that great, however, it's mild relative to the propagation of unregulated currency.

+ BTC is neither a currency, nor a store of value - it's just monopoly money. It's not a currency because it can't be used in any economic system as a standard means of payment, and it's not a store of value for obvious reasons of volatility and no underlying inherent value. Literally any other classical store of value i.e. real estate, bonds, cash, commodities - are much better 'stores of value'.

+ Almost all of BTC's 'value' thus far expressed, comes down to either 1) playing speculative, Ponzi-like games where massively wealth individuals effectively control the market (defeating any notion of real distribution), or 2) skipping over regulatory concerns to do what amounts to illicit stuff, or 3) novelty and intellectual curiosity, which is nice, but not worth it.

+ The stated value of BTC which is to day 'hedge against debasement' unfortunately does not work. Currency is an essential thing for an economy, a 'super hard currency' (i.e. literally ever note backed by Gold) implies zero flexibility in the system and is guaranteed to cause serious strains on growth and/or very ugly deflationary spirals. And other problems.

What we want, ideally is 'very smart monetary policy' that enables us to move the levers as necessary for everyone's well-being. During the COVID crisis, we would be in serious trouble without monetary policy levers, the economic calamity would be much worse if we were all using BTC for example.

Obviously - having monetary policy, means a risk of debasement, such as we see in Venezuela, but Venezuela did not crash merely because of bad monetary policy - it was 'bad everything policy'. Venezuela faced economic collapse because every part of it's system was corrupted, including the Central Bank. There's a 100% chance, that even with a 'Gold Backed Currency' - that some entity in power will have had a chance to corrupt that system as well. For one - stealing the Gold.

+ Currency is a 'social contract'. It's a 'contract with the economy' and there is absolutely no getting away from the fact that it's somewhat intangible and fungible. $100USD basically means 'Americans owe you about this much'. That's it.

This notion that you can 'hold $10B in your pocket' is kind of myth - it's only even possible due to the complex mechanization of financial markets and the banking system.

You just can't sit on 'something' that's worth that much because there's far too going on in terms of comparative value - either that $10B represent assets that have to be managed, or, in a more long term store of value (like real-estate) whereupon even then the value will shift over time.

+ Some nice regulations to enable more fluid transfer of money would be nice. An instrument that was broadly backed by other things of value i.e. stocks, bonds, basked of currencies - and that which itself could be used as a 'global currency' would be nice as well. That could happen. But it may not have anything to do with blockchain.

+ Finally - Blockchain and decentralization - there's just no way getting around having to have trust in our institutions of various kinds. If they don't work, we all fall down. There's no magical way to wish that away and put trust in our pockets. Maybe better trust and transparency.

Finally: I should note there's a 'disruptive' value in BTC I think. It's a 'demonstrative' meme that can help use 'see' the relative value of blockchain etc. in various scenarios.

Re: Tesla buys $1.5B in Bitcoin, may accept it as payment in the future

#887
post #192

I don't understand all the Crypto hate on this site. Since when have hackers become the luddites to new ways of finance?

> I don't understand all the Crypto hate on this site. Since when have hackers become the luddites to new ways of finance? For me, it's because nobody can explain what the value offering of Bitcoin is - mainly the question 'what can I actualy do with a bitcoin?' . It's a bad currency because it is slow to exchange and costs lots of money to exchange - I can't use it to buy my coffee in the morning. It's a bad non-spe…

There are plenty of explanations that you are willingly avoiding.

Re: Tesla buys $1.5B in Bitcoin, may accept it as payment in the future

#888

I don't understand all the Crypto hate on this site. Since when have hackers become the luddites to new ways of finance?

I'm a crypto hater, I consider bitcoin to be a pyramid scheme. And also, I think that it is a positive thing that an institution that I can influence (government) is in control of deciding how transactions work. This might also be a cultural thing, since I'm scandinavian, and "we" generally consider government regulation as something necessary.

Something to consider: Bitcoin is a consensus network. You can move to any coin/network/currency that aligns with your preferred "governance". That includes stablecoins etc.

There are already services that instantly convert your crypto into another for ease of liquidity. You can quite literally vote with your wallet.

Re: Tesla buys $1.5B in Bitcoin, may accept it as payment in the future

#889

Earlier quoted context omitted.

There’s utility in Bitcoin but also massive scaling problems that haven’t been tackled yet. It has long term potential, but you have to separate that from the asset bubble that’s inflating everything these days. If you don’t see the parallels between bitcoin’s price and Tesla’s stock price you haven’t been paying attention to what’s happening in the economy. Hope this illustrates that Tesla’s commitment to clean ener…

The bitcoin lightning network address this issue. It already works, adoption is slowly increasing https://en.wikipedia.org/wiki/Lightning_Network

It's something I don't really understand, doesn't Lightning scale by bypassing what makes bitcoin what it is: the proof of work and no trust system? It seems with Lightning you are back to having to check every transaction, and because it's painful, the trust mechanism is being centralised. It's seems to me we are almost back to square one then (though at least in theory you can control everything yourself and do not have to distribute the trust).

Re: Tesla buys $1.5B in Bitcoin, may accept it as payment in the future

#890
post #322

This is very worrying. Don't they have financial advisors at Tesla? An automaker should focus on making cars. This is what they specialise in and what they are good at. They should not be speculating with financial assets. Tesla shareholders can do that themselves, if they wish to.

Would you consider Porsche an automaker? I assume so; then, it might surprise you that most of their revenues and profits don't come from producing and selling cars, but rather from financial products.

According to Porsche, Porsche Automotive had a profit of €4,110 million in 2018, whereas Porsche Automotive and Financial Services had a profit of €4,396. [1] This means the financial services branch contributed 6.5% of the profits. [1] https://annualreport2019.volkswagenag.com/divisions/porsche....
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