Tesla buys $1.5 billion in bitcoin and plans to start accepting it as payment for products

[demmiblue]

Source: CNBC

Tesla announced Monday that it bought $1.5 billion worth of bitcoin, according to a filing with the SEC.

The company said it bought the bitcoin for "more flexibility to further diversify and maximize returns on our cash," according to the filing. In addition to the purchase, Tesla said it would start accepting payments in bitcoin in exchange for its products as well.

The move raised immediate questions around CEO Elon Musk's behavior on Twitter recent weeks, where he has been credited for increasing the prices of cryptocurrencies like bitcoin and dogecoin by posting messages about them and therefore encouraging more people to buy.

This is breaking news. Please check back for updates.

Read more: https://www.cnbc.com/2021/02/08/tesla-buys-1point5-billion-in-bitcoin.html

[hunter]

1. Ah, bitcoin... All the best features of Pyramid schemes, Ponzi schemes, and chain letters.

Powered by coal!

[ansible]

3. lol, it's got a better future than the US dollar at this point now

I got on the bitcoin train when it was at $500

[LymphocyteLover]

5. does it really?

what is bitcoin up to now?

[ansible]

12. Extremely high, currently at $43k and rising by the hour

https://www.coindesk.com/price/bitcoin

[LymphocyteLover]

28. and in a month?

[William Seger]

8. The ONE thing you want from a currency is stability

... which is completely impossible with bitcoin. Its volatility makes it completely unsuitable for trade; Musk could literally lose his business taking unnecessary gambles like accepting bitcoin, so it sure looks like a pump-and-dump scheme.

[LymphocyteLover]

27. that is what I was thinking

[jmowreader]

55. With arbitrage it isn't a huge problem

Say a Bitcoin costs $20,000 (it jumps around quite a bit) and the Tesla you want costs $100,000. You buy five Bitcoin immediately before you order the car and send Tesla the numbers. They immediately sell them, locking in the value.

I remember when Bitcoin first came out, saying it looked like a good money transfer mechanism especially if you were into foreign trade. Unfortunately it has turned into a purely speculative play.

[William Seger]

56. But that's exactly why trying to use bitcoin as currency is ridiculous

If I have dollars and Tesla wants dollars, what do either I or Tesla get for taking on that extra hassle and completely unnecessary risk?

[jmowreader]

59. You get a way to move a shitload of money without the hassle of a wire transfer

[William Seger]

60. "Hassle" of a wire transfer or traceability of a wire transfer?

Admittedly, I don't know how much hassle it is to do what you suggest, but it's not that hard to do a wire transfer. If it was a local dealer, I'd just use a check. If I'm not transferring questionable money, and I'm not interested in online gambling in bitcoins, then I'm still not seeing any reason why I would ever want to use bitcoins for anything.

[pnwmom]

22. And Musk, a libertarian, is trying to destroy the dollar

Last edited Mon Feb 8, 2021, 12:58 PM - Edit history (1)

and replace it with his own preferred, unregulated currency.

No wonder he moved his headquarters from CA to TX.

[OnlinePoker]

36. Other way around. n/t

[pnwmom]

37. Right! Thank you! n/t

[bucolic_frolic]

10. It's not tangible, fungible, mandated by government, nor dividend paying

It's justification and value is by faith alone, and it grows like cancer.

There is the lesson of history, which is that all debt is eventually extinguished, either by repayment, default, or currency failure. Bitcoin is performing as a sponge, as a currency black hole to suck up all the worldwide money printing since 2009. Governments must, absolutely must bring bitcoin under regulation to try to regulate the collapse lest it draws in all other currencies too.

We have two veins in the currency wars. Gold bugs think currency must have real intrinsic value. Bitcoiners believe value doesn't matter. Fiat currencies depend on a universal peg, currently the US dollar. These three competing ideas are in a tug of war. My bet is on fiat currency because it bridges the two extremes, but I do think we are in for a ton of inflation and devaluation unless the US dollar can reassert its safety and value, and that depends on our own economy and political hegemony worldwide. We sure have work to do.

[ansible]

11. The US dollar depends entirely on the strength of this country, and this country is declining

If there's one guarantee left about the future, it's that the US will no longer be the superpower it was in the 20th century. Cryptos like bitcoin are backed by the collective faith of the global community, not just a bunch of crooks at Wall Street.

[Happy Hoosier]

24. LOTS of problems with that statement.

"Crypto" currencies are not secure. We've seen that a number of times now.

Any currency with a absolute supply is a terrible idea. It encourages hoarding and discourages investment. There is a reason we abandoned the gold standard, and this is a big part part of it. People will resist spending fixed supply money on depreciating assets because by the time they the time leaves your inventory, the appreciation of the fixed asset exaggerates the life-cycle cost of the item.

I mean, how many people who own bitcoin regularly buy stuff with it? Not very many. Most who own it, own it as a commodity, not really as a currency. They want to keep it and let it increase in value. In the vast majority of cases, if they want to spend the money tied up in it, they will convert it to cash. And indeed, those that DO accept Bitcoin peg the price to equivalent cost in dollars or the local currency.

[paulkienitz]

38. "collective faith" is what gave value to every past bubble.

Bitcoin could not have been more perfectly designed to produce worthless bubbles if it had been overtly created for that explicit purpose, and that is indeed what it does. It inflicts numerous costs on society and has yet to provide a benefit except to crooks and gamblers. And it will eventually go the way of all bubbles, especially since quantum decryption is not far off. There are cryptocurrencies which have some level of security against quantum algorithms, but bitcoin is not one of them.

[lonely bird]

14. ALL currency is fiat currency

Let us start with gold.

Gold has NO intrinsic monetary value, none. Humans decided gold had intrinsic monetary value because it was shiny, didn’t corrode, was hard to get and likely the priests/shamans dictated it so via claims oral or written that deity told them.

ALL currency depends upon the single most critical issue facing this country and much of the world, confidence. Confidence in the reliability and steadfastness of institutions including currency is necessary to the manner in which human society organizes itself.

Bitcoin, imo, is not merely a Ponzi scheme, pyramid scheme or chain letter. No, it is precisely the ultimate example of that which cannot provide the basis for confidence. The inherent instability of Bitcoin or any other non-governmental currency must lead to decay of confidence. Oh, it’s worth $43,000 per Bitcoin...until it is not.

Beware and investigate those who seek profit in chaos and “freedom” without quite defining what “freedom” is.

[colorado_ufo]

30. This is not the whole picture. Gold DOES have a LOT of value.

The properties of gold are unmatched for many scientific and even medical uses. It is vital to the space program and more. At one point in history, the "shiny object" theory may have prevailed; yet there is so much of history that we do not know, plus we have learned so much about the uses and value of gold since its "shiny object" days.

[lonely bird]

41. Of course for engineering and other uses it has value or, rather, usefulness

As currency it has no intrinsic value. Humans believe that it does so it does. It has no more intrinsic monetary value than societies that used seashells as currency.

[JDC]

15. Lol. Perfect

[oldsoftie]

17. I hope you're right.

[lagomorph777]

25. If he wants to waste money, isn't it more fun just to blow up some rockets?

[Cosmocat]

42. None of these things

Bitcoin itself is none of these things and neither are most cryptos.

It most certainly is a speculative market, but you do get something for your $ ...

[Polybius]

44. Maybe

But it made me money.

[soothsayer]

2. Speaking of which -- what happened to Mrs K? She was a drumpf gadfly...

...taking on all its tweets before taking a hiatus near the end. Now she’s re-emerged but it’s all stock tips and railing against the GameStop thingy.

Like so:

Link to tweet

?s=21


Mrs. Krassenstein
@HKrassenstein
BREAKING: Elon Musk's Tesla has just announced that they invested $1.5 BILLION into Bitcoin! I can't underscore how big this is for Bitcoin. $BTC.X $TSLA

[demmiblue]

4. They are a family of grifters.

Here are a couple of articles:

https://www.thedailybeast.com/twitter-bans-resistance-famous-krassenstein-brothers-for-allegedly-operating-fake-accounts

https://archive.thinkprogress.org/who-are-the-krassenstein-brothers-251f68acf674/

From the Think Progress article:

Questions about the Krassensteins’ business model persist nonetheless. Both admit that, prior to gaining notoriety as part of anti-Trump Twitter, they were involved for years with websites involving discussions on multi-level marketing (MLM) programs — business ventures that often run perilously close to pyramid schemes.

Today, the brothers still aren’t straying far from industries that raise certain red flags. Both mention Bitcoin in their Twitter bios; on his LinkedIn profile, Ed mentions “Cryptocurrencies” as one of his specialties. As he wrote the other day, “Cryptocurrency is no different than cash, except it can be transferred electronically.”

I highly doubt that Mrs. K is actually the author of the tweets on that account. Fun fact: Ed K's Twitter account started out as a Justin Bieber fan account. Lol!

[soothsayer]

7. Ha! Makes sense

Oh my

[dalton99a]

18. They are unprincipled opportunists who would sell their mother for a profit

[LymphocyteLover]

6. what's the liberal take on bitcoin anyway?

I always thought it was more a rightwing thing and kind of destabilizing for regular economies

[pnwmom]

13. It's a way to escape government regulation of currency. That's the correct and liberal take. n/t

[PSPS]

33. No, it's a way to escape criminal culpability.

That's why it's the currency in the ransomware, child porn and other such "delightful" enterprises.

[JCMach1]

49. Absolute wrong take.. blockchain is traceable unlike cash

On other notes, I have seen some incredibly ignorant threads about cryptocurrency on DU and this is yet another one.

[PSPS]

50. Sorry, but we're talking bitcoin here. Bitcoin wallets are anonymous. That's why criminals use it.

Perhaps you have a financial stake in bitcoin that motivates your disinformation, or maybe you're just not knowledgeable about it.

This will help you get up to speed:

Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed through Cryptocurrencies?
https://academic.oup.com/rfs/article-abstract/32/5/1798/5427781

[JCMach1]

53. The wallet in your back pocket is untraceable AND anonymous

Sorry, but you cannot compare crime that takes place in cash vs. Bitcoin.

I said what I said

[progree]

23. It also consumes huge quantities of electricity to mine, and that will just grow and grow

as the mining algorithms keep getting harder and harder to solve.

https://www.google.com/search?q=electricity+and+bitcoin+mining&oq=electricity+and+bitcoin&aqs=chrome.0.0j69i57j0i22i30l2j0i390l4.7616j0j7&sourceid=chrome&ie=UTF-8

I am frankly horrified that on an ostensibly progressive site like DU, this issue is hardly ever mentioned. Meanwhile the CO2 atmospheric concentration is growing and accelerating.

The Environment & Energy Group is this-a-way.

[LymphocyteLover]

29. Right-- forgot about that. Thanks

[Cosmocat]

43. A lot of them now are using renewables

and proof of work is getting passed by for proof of stake.

[progree]

45. A lot of them aren't unfortunately. And solar and wind require huge amounts of concrete and metals

which use fossil fuels to produce

https://www.democraticunderground.com/1127125471#post9

So while solar and wind may be greener, they are far from pristine.

.and proof of work is getting passed by for proof of stake.

I was referring to Bitcoin which is what this thread is about. As well as the question I was responding to in post #6.

[Politicub]

47. My personal liberal take is I wish I would have got in

when it was traded for pennies.

It’s a weird, abstract currency idea. It was meant to be a medium of exchange and commerce, but has morphed into a store of value.

I can’t wrap my head around how something so abstract has so much value. But it does, and some have made a lot of money.

I don’t think it’s liberal or conservative. It’s more of a new invention that has no physical value beyond the value ascribed through trading it. That’s like most stocks, though, but stocks are tied to a company or a tangible product.

[LymphocyteLover]

52. As noted above there are some anti-liberal aspects to it but the worst thing is the energy put into

mining it, which contributes to climate change

[progree]

63. Oh, no big deal, global Bitcoin mining just uses as much electricity as Argentina or the Netherlands

So nothing to worry our pretty little heads off about as long as we're making money.

Electricity to power bitcoin surges to new heights as price gets Tesla boost, 2/9/21

The University of Cambridge’s Centre for Alternative Finance ( https://cbeci.org/ ) attempts to keep track of bitcoin energy consumption. While the exact consumption can never be known, a guess can be produced by tracking the total number of hashes produced by miners and looking at the efficiency of bitcoin mining equipment. The hash rate is the measuring unit of the processing power of the bitcoin network.

At an estimated 121.9 annualized terawatt hours, bitcoin now requires more electricity than Argentina, the United Arab Emirates or the Netherlands did for all of 2016. ...

About two-thirds of all bitcoins are mined in China, and a third of that is in Xinjiang, which has cheap coal power. The number-two center of Chinese bitcoin is in Sichuan, home of the Three Gorges Dam, the largest hydroelectric dam in existence. ((Sichuan is 27% of the size of Xinjiang in Bitcoin electricity consumption -Progree))

The U.S. is in second place at just 7%, according to the University of Cambridge data, followed by Russia and Kazakhstan.

MORE: https://www.marketwatch.com/story/electricity-to-power-bitcoin-surges-to-new-heights-as-price-gets-tesla-boost-11612887550?siteid=yhoof2

There's a graph: In annualized TWH, it was running 110 TWH in January, and lately surged to 120 TWH.

Per Google, citing statista.com, U.S. end use consumption of electricity was 3.99 Trillion KWH in 2019.

So global Bitcoin electricity consumption as a percentage of total U.S. electricity consumption is 120 TWH / 3,990 TWH = 3.0%.

That is, GLOBALLY, Bitcoin mining uses up about as much electricity as 3% of the U.S. population or 9.9 million Americans or 1 1/2 times the average U.S. state.

[LymphocyteLover]

64. so messed up, truly insane-- how can this even be stopped?

One hopes a new climate accord would seek to tamp down on this insane source of pollution

[rockfordfile]

9. Not a good idea

[Happy Hoosier]

16. Why would anyone pay in bitcoin?

Bitcoin, like all limited "currencies" is a terrible choice for buying expensive depreciating property. There is a reason we dumped the gold standard.

[yaesu]

19. That's nothing, and I hate to brag, but

I just picked up a package of tulip bulbs for only $1000, please, no hate, be happy in my fortune

[3Hotdogs]

26. I'll trade your flowers for 5 (yes, five)

Shares of Enron which is due to increase in value when my former student Andy Fastow, gets out on parole.

[ad121rome]

20. Hold on there

Accepting the Bit Coin is another example of an attack on the US economy. If I was thinking of purchasing a Tesla then cancel those plans please. This is an attack on our monetary system, we need to resist.

[Polybius]

62. I respectfully disagree

I own a lot of crypto. It’s been very good to me.

[sweetloukillbot]

21. Seems like the perfect way to pay his Mars slaves

[rdking647]

31. i own a little bitcoin that i bought a couple months ago

i treat it the same way i do gold. as a just in case hedge.

[PSPS]

32. The currency of the ransomware, child porn, and other respectful industries!!!111!!

I guess musk wants their business too.

[Kablooie]

34. I have a little over 1 Bitcoin.

I bought it for $200 5 years ago just to learn what it was.
I figured I would use it up buying things but all I bought was one 20$ computer program.
Using Bitcoin was slow and awkward and I never found anything else to buy so it just sat there.

I checked recently and it's still there.
Whew.

[paulkienitz]

35. this may be the Tesla's all time dumbest move

Bitcoin is not a currency, it's a collector's item.

[bucolic_frolic]

39. Hey that won't trigger any red flags

[DinahMoeHum]

40. Bitcoin is "rat poison squared" - Warren Buffett

https://markets.businessinsider.com/currencies/news/warren-buffett-best-quotes-bitcoin-cryptocurrencies-investing-rat-poison-squared-2021-1-1029974898

[JT45242]

46. Apparently Musk has a lot of money to launder -- now that Trumpy is out of the picture

Elon is a ponzi scheme artist who would seem to be a perfect money launderer -- devoid of a moral compass.
Cryptocurrencies were designed to make money laundering easier so I am not surprised that he is jumping on this.

[JCMach1]

54. Virtually all money laundering takes place with old fashioned cash and real estate

Bitcoin as a means of money laundering is a largely a myth that banks enjoy perpetuating while they continue money laundering.

[cbdo2007]

48. Bitcoin will increase more than dollars in the future so paying for a car with it seems like a dumb

idea.

Of course it makes sense for Tesla as the value will go up more than the value of dollars, I just can't imagine any buyer to be that dumb.

[bluecollar2]

51. I really don't understand the "Bitcoin" thing...

Is there a "Bitcoin for dummies" explanation out there.

I live in Miami-Dade county in South Florida in the Agricultural area. I've noticed that many of the gas stations and small supermarkets now have Bitcoin ATM'S right next to the regular ATM'S...and that they appear to be set up to cater to our farmworkers....many of whom send money back to their families.

I really don't understand the concept.

Any help?

[jmowreader]

61. For sending money back to your family, bitcoin isn't a bad idea

Bitcoins are stored in a computer database called a wallet, which can be on a cheap smartphone. A bitcoin owner can transfer coins from wallet to wallet...so, if you want to send money to your family in Mexico, you transmit coins to their wallet and they immediately cash them in.

[MerryBlooms]

57. Will bitcoin buy a Tesla car? I'm always a skeptic when I see Musk involved...

https://www.msn.com/en-gb/money/other/analysis-can-you-buy-a-tesla-with-bitcoin-how-the-payments-might-work/ar-BB1dvS2C?MSCC=1598247960

[Polybius]

58. Hopefully Musk tell everyone to buy Etherium next

Prices would skyrocket.

[NickB79]

65. An EV company using a carbon-intensive, coal-fueled cryptocurrency?

https://www.bloomberg.com/opinion/articles/2021-01-26/is-bitcoin-mining-worth-the-environmental-cost

The same guy offering $100 million for carbon capture schemes?