Tesla cars can be bought in Bitcoin | Hacker News Reader

Tesla cars can be bought in Bitcoin

bbc.com

39 pointsmikesabbagh89 comments

> Tesla's terms and conditions say if a refund is needed, it can pay in either the exact amount of Bitcoin paid or in US dollars based on the dollar price of the car - whichever it wants.

Fascinating.

Now there's an excellent way to make money.

(Value goes up, get refund in bitcoin and buy car in dollars. Value goes down, get refund in dollars.)

I think you misunderstood. Based on the wording it would seem that Tesla gets to choose how to refund you. So if BTC goes up your refund will be the dollar value of the car, if it goes down you'll get BTC back.

i think the choice lies with tesla, not the customer!

Why would anyone then pay in bitcoin?

Memes.

There is a sizable portion of people who have made oodles of money on cryptocurrencies and spending it for the story has become valuable. It is the "I am rich" effect but for a different audience.

The marketing angle makes sense.

But it also risky. If the there is a major correction in the price of bitcoin, then Tesla is not going look so good.

However the refund policy is an explicit loss to the customer. You would have to be silly to accept that.

i suppose it allows for tax evasion - by paying directly in bitcoin, without conversion to a fiat, you avoid the gains from being detected and taxed.

Hahahah - what?!

Could this be a mechanism to launder money?

Edit: I'm not saying it is, but, just as an example, someone could buy BTC from an unregulated country, then purchase a Tesla and request a refund in dollars.

shhhh

I am not 100% familiar with US regulations but I imagine there will be some KYC process before buying the Tesla in Bitcoins.

I know that banks are subject to some kind of restrictions on $10k+ transactions. Does that apply to sellers who sell directly to the public?

If you try to buy a new car with a briefcase full of cash, do they have to do something?

The customer doesn’t choose the method of refund, Tesla does.

Transactions are registered on the blockchain, and that's transparent, verifiable by anyone. Much more than through any bank, ironically.

Regardless on how the car is paid, a car is delivered to a physical person, and Tesla asks for sure many information on that person... it's not like something purchased on the darknet delivered to an anonymous PO box :-)

Great! I'm sure this won't be used for Money Laundering, no sir.

That was my first thought but this part of the quote is important: "whichever it wants."

In other words, Tesla will very likely refund you in Bitcoin unless there's a serious issue.

Good catch. So they will refund you in whichever way is cheaper.

Peter Schiff (notorious Bitcoin critic) picked up on this as well:

> You can buy a #Tesla with #Bitcoin , but you'd be a fool to do so. It's better to sell your Bitcoin and buy the car with cash. That's because at its sole discretion Tesla prices refunds or buyback in either the quantity of Bitcoin paid or their dollar value at the time of payment.

https://twitter.com/PeterSchiff/status/1374857273282035716

Win-win for Tesla.

Wonder how much the environmental cost of BTC transactions and mining offsets any positive "green points" from using an EV

About 1/3 apparently https://medium.com/crypto-lucid/buying-a-tesla-in-bitcoins-c...

The 1/3 assume that the bitcoins are never going to be used again, that is a very bad assumption. Let's be very conservative and assume they will be used once per year for the next 10 years, so instead of the 20+6=26 tons of CO2 you get 20/10+6=8 tons of CO2. (And you get a bigger reduction if you assume more more exchange velocity or that bitcoins will be around for more time.)

Also, the 6 tons use the coefficient assume a 1% fee but with a $40,000 transaction, you don't have to pay a $400 fee. Probably $15, but let's be pessimistic and assume $40. So 20/10+6/10=2.6 tons of CO2, i.e. like 1/30 instead of 1/3.

(Being more optimistic, I think it can be reduced to 20/100+6/30=.4 tons of CO2, i.e 1/200 of the savings.)

The transaction energy cost to buy the car is tiny to even be considered. The trip to the dealership you make to buy your car with fiat money probably takes far more energy.

Which is sadly not the case.

Bitcoin mining is good for the environment, that's why Tesla put $1b BTC on their balance sheet

Edit: fine, downvote me but read this: https://raw.githubusercontent.com/axeldelamarre/files/master...

How so?

https://raw.githubusercontent.com/axeldelamarre/files/master...

lol, what will the permabears come up with next

https://digiconomist.net/bitcoin-energy-consumption

Per transaction, 792.37 kWh and 376 kg (828lbs) of CO2. That's about 27 days of electricity usage for an average US home. Or 62,000 hours of youtube video watching. Or 834,000 VISA transactions.

It's fine. Not a big deal what so ever. Bitcoin is obviously the most efficient means of monetary transaction. No reason to question it.

I don't think anyone is arguing BTC is energy efficient. It intentionally isn't, by design. Now, whether the tradeoffs are worth it is another question entirely.

If you're buying a vehicle to save the planet from unnecessary pollution, but use a payment that it unnecessarily polluting the environment... you... don't see a bit of a problem?

> 792.37 kWh and 376 kg (828lbs) of CO2

Why does each transaction need to release CO2? Can they not run off renewables or nuclear?

That only makes other consumers consume the fossil-based energy instead, overall CO2 production would remain constant. This is zero sum unless renewable plants were explicitly installed for mining bitcoin.

Because the world has been failing, for decades, to move grids away from carbon and towards zero emission technologies. And there is no end in sight.

If we could get all electricity generation to be zero emissions then climate change would be largely solved. And we'd be able to stop complain about btc. But until then...

https://www.eia.gov/tools/faqs/faq.php?id=74&t=11

It is an estimate and an average. It might actually be in the low end.

Digiconomist adjusts to the average green energy production on the grid and averages out among countries that mine bitcoin. They detail out their math to arrive at their numbers.

Transactions have no marginal affect on energy usage. More mining does not produce more transactions. It's a really common misconception here.

I may be suffering from this misconception so would be happy for you to explain more / share an explanation. Doesn’t more transactions mean more fees, so more incentive to mine?

That's a really good point, more demand for the limited number of transaction space pushes up the tx price, incentivizing mining. Currently though, the majority of the block reward comes from inflation not transaction fees. With BTC price so high, it's likely that stopping transactions completely would not cause any miners to drop off as mining would still be profitable, which is why I say there's no marginal cost.

In the future, fees will necessarily become the dominant compensation as the inflation rate decreases, so this will likely stop being true. This is pretty far off though, and it's not clear that the environmental issue will still exist either due to a change in mining or just wider use of renewables for mining.

Hard to know for sure, but here's some inaccurate napkin-math:

A single BTC transaction requires ~376kg of CO2. [1]

Driving a Tesla emits ~91g CO2 per km. [2]

Average distance driven in the US per year, per car is 13,476mi (21687.5km). [3]

Driving your Tesla for a year emits ~1,973,562.5g of CO2, or 1,973.6kg.

So, if you buy one with Bitcoin, you're emitting ~19% more CO2 for that year than you would with cash or credit. You could further amortize the amount over the lifetime of the car.

[1] https://digiconomist.net/bitcoin-energy-consumption/

[2] https://www.electrive.com/2020/08/31/study-currently-availab...

[3] https://www.fhwa.dot.gov/ohim/onh00/bar8.htm

Those numbers are absolutely, sickeningly staggering.

1 litre of petrol produces about 2.3 kg CO2. That means, a bitcoin transaction is the same as burning 163 litres of petrol. Absolutely insane.

I decided to do some more numbers. It means that driving a Tesla for 25.31 km produces as much CO2 as burning 1 L of fuel from a CO2 equivalence point of view. Put differently, Teslas get 3.95 L per 100 km from a CO2 equivalence point of view. Compare that with, say, a Mazda 6 which apparently uses 9.8 L per 100 km from a very quick search.

From a carbon emissions standpoint, Teslas are about 2.5x as efficient. Reasonable, to be sure, but not the order-of-magnitude difference I might have guessed if I had to take a stab in the dark.

The electrive article even cites a very optimistic study that assumes a high share of renewables to fill the Tesla. Other studies see quite more modest gains of EVs, e.g. https://www.iea.org/data-and-statistics/charts/comparative-l...

Edit: In contrast, the gains of public transit vs. individual car commutes are > 7x per km driven, before renewables: http://www.mobilitaet-in-deutschland.de/pdf/infas_Vortrag_if... , page 18 (German source, sorry, "Bus" == bus, "Bahn" == train)

> A single BTC transaction requires ~376kg of CO2. [1]

That seems super wrong. They must be assuming very few transactions per block.

Most bitcoins were mined into existence when bitcoin was much cheaper than it is today, and thus the energy spent mining was much smaller.

Transaction cost is probably about 100-200 kilowatt hours.

Sorry my transaction cost in kwh is apparantly off by a factor of 5. Sorry.

Another fun calculation.

How many instructions can a modern piece of computing hardware do on 750 kilowatt hours?

Just an indication of what an incredible beast bitcoin is.

Green points of EVs are negative compared to fossil fuel public transport even.

proof of work may be superseded at some point (e.g. by proof of stake). Not even mentioning the Lightning Network which is going to help a lot...

Avoiding Bitcoin because we use coal to produce energy cannot be more wrong. The problem is that we produce energy with coal, not that Bitcoin uses energy to be mined. With such reasoning, then let's forget about smartphone, laptop, car, planes, house heating etc. and just go back straight to prehistory. Each of these things pollute the planet, let's not deny it.

And if you think that BTC is not worth this energy waste to get rid off USD dominance (among others), then it's maybe you're an American enjoying USD dominance. That's of course a very biased view.

It’s been six years since people started saying “the lightning network will solve this”

> Mr Musk said: "Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat [government-controlled] currency"

Bitcoin enthusiasts are very excited about this (e.g. on /r/CryptoCurrency)

I imagine so, there have been relatively few instances in which merchants were interested in selling directly for bitcoin, rather than using an intermediary to process the amount straight to a national currency.

Coinbase is already running out of bitcoin to sell.

i guess i will eat my words - i thought that tesla would never actually accept bitcoins directly. I stand corrected.

I'm sure Elon Musk is not fond of having to go through Coinbase to buy bitcoin. He seems to have a disdain for financial middlemen and any tech leader not named Elon Musk.

This allows for bitcoin to be put directly into Tesla's wallet with no cost to them.

Massively raises the risk of a hack or internal theft though.

please explain how this shall be orchestrated on a multi-sig wallet, it's not like they do not already have more than 1.5 billions worth of USD already...

How do I know what wallet they’re using or if they’re using multi-sig? 1.5 billion makes them a bigger target. Just takes one mistake and the keys have to be stored somewhere.

Companies are using custodians to hold large amounts of bitcoin; they usually don't hold it directly.

It’s certainly held offline in cold storage.

I've often said that the US government can, and will, outlaw crypto if it starts to feel threatened. It may not absolutely stop transactions, but the value of the coin will plummet tremendously if this happens.

However... if a sufficient scale of corporate interests stand to lose billions of dollars from the coin plummeting in value due to legal action I might rethink the viability of doing such a move politically.

I've often said that the US government can, and will, outlaw crypto if it starts to feel threatened.

That's not going to happen. Code and money are speech and bitcoin is both. Outlawing bitcoin would be unconstitutional.

It would be one of the easiest cases the Supreme Court ever had.

It’s treated as property by the IRS and a commodity by the CFTC and exchanges are regulated by the SEC. The US government has already approved it.

> It’s treated as property by the IRS and a commodity by the CFTC and exchanges are regulated by the SEC. The US government has already approved it.

There are commodities that have become illegal.

Is the price denominated in USD or in Bitcoin? The USD price for a Tesla tends to remain constant for relatively long stretches of time, I wonder if they're willing to commit to the BTC price staying put for similar amounts of time

Wouldn't that just result in everyone buying with the currency in which the car is the cheapest at that point in time? Seems like a guaranteed loss on Tesla's end.

What is the use case here?

Why deal with the cap gains taxes associated with this?

I mean a lot of people will probably have to sell assets to buy a Tesla anyway.

Mayhaps you have crypto funds that you've forgotten to report as income. Being able to get a brand-new car without having to involve IRS is a neat way to commit tax fraud.

This is not accurate. Tesla is obligated to file IRS Form 8300 for all Bitcoin purchases over $10,000.

wouldn't Tesla report the transaction?

The other option is to borrow USD against BTC to buy a Tesla (I just did that yesterday), but if loan-to-value goes over 80%, the companies will liquidate my BTC automatically. I'm just doing this because I'm speculating that we're just at the start of the next bubble in the cycle.

I am curious what is the APR on that loan? BTC volatility should make it very high.

8% + 2% fee over $50k loan on blockfi

Like all things bitcoin it's easy. It's a lot easier to press a button on your phone and transfer 100k then it is to go through the pains of a bank transfer or any other payment method. I know hacker news is American centric but not all counties have the same cap gains taxes, plus you have to actually have a gain to pay taxes and these are all sorts of ways to mitigate this.

For now they’re only accepting bitcoin payments in America.

Lots of publicity from this. They will always be the first to have done this.

Do you keep enough money to buy a tesla lying around in straight cash?

Interesting data point that $TSLA operates its own full BTC nodes. Why not mining pools that use solar / spare car battery and tpu / cloud gpu cycles ;)

Running a full Bitcoin node just means downloading and validating the blockchain, it doesn't require mining. It's just another way of saying they do not rely on a third party payment processor.

Yeah, takes 2 seconds to run a docker container with a full node.

Hard to imagine anyone but Bitcoin true believers doing this. It’s basically throwing money away if BTC continues going up

They won't be converting BTC purchases to fiat currency, so no throwing away of money.

Bitcoin true believers are the ones who wouldn't do this because they believe it will keep going up.

Why? Don't true believers believe BTC has use besides being an unregulated speculative vehicle? So they'd love the normalization of buying something as major as a car with it?

Or are we just admitting that pretense is gone with the wind and now "true believer" refers to the HODL crowd?

BTC true believers believe its a currency not a speculative asset you hold and it magically appreciates in value.

It's not magic:

    Bitcoin is a non-sovereign, hard-capped supply, global,
    immutable, decentralized digital store of value. It’s an
    insurance policy against monetary and fiscal policy
    irresponsibility from central banks and governments
    globally. — @Travis_Kling

Why, then, would you buy a tesla and not bitcoin? A car only depreciates in value.

If you need a car, you need a car. I don't think anyone sees them as an investment other than "an investment in being able to get from A to B on one's own terms"

Are there any Tesla buyers who just "need a car"?

I'm not familiar with cryptocurrencies, but why not some other alternative with far less resource usage?

Because Bitcoin has a market cap of around $1 trillion dollars and it the only cryptocurrency that has a chance to be a global reserve currency.

Since Bitcoin is mainly only used for crime, does that mean that Tesla is enabling criminal movement? Didn't someone get indicted recently for providing a service that was used by criminals? Let's get them, DoJ!

Reply on news.ycombinator.com