Tesla Wants Your Bitcoin Without the Downside
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I have spent Bitcoin on things like web hosting in the past, I paid probably $150 worth of Bitcoin on a server when the price of Bitcoin was less than $10k. If I had kept that Bitcoin it would be worth around $1,000 now. Does that mean I should be allowed to ask the web hosting company for a refund or should expect them to refund me the full amount in Bitcoin? Absolutely not.
If they did it any other way then the customer would be the one taking on zero risk. If the price of Bitcoin went down you would keep your car, and if the price went up, you could ask for a refund to increase the total dollar amount of money you already spent.
One thing that makes the Tesla case unique is that they plan to hold the Bitcoin they receive _as_ Bitcoin whereas most companies who accept Bitcoin immediately convert it to dollars. So I think they have to have some leeway.
Similar to my other example, if you spend 1 BTC @ $50k to buy a car then the price of Bitcoin crashes to $30k and you ask for a refund, it isn’t feasible for Tesla to pay you 1.6 BTC as your refund cause then you end up with more BTC than you paid initially and Tesla didn’t gain BTC by holding your original amount.
> So this "Look, if you treat your Tesla reservation like an option on Bitcoins, we've designed it to be literally the worst possible option on Bitcoins. Please, please, please: don't try this." is actually a quite reasonable policy.
If you’re really worried that you might want a refund on your Tesla before it is completed, then just buy one second hand. It will be cheaper and you won’t need to wait. You could probably even find someone willing to sell you one for Bitcoin
I'm not saying he is wrong here, or wrong in general about Bitcoin, or that you shouldn't take his advice into consideration. Just to remember when people speak for/against Bitcoin they sometimes can have deeper (even sometimes unsubconcious) motives.
Well, I wish things were that easy, but life is not that black and white. Someone can be right and wrong at the same time.
> If anything his current position makes him an expert.
What? His position in Stripe makes him an expert on cryptocurrencies? As far as I know, Stripe doesn't deal with cryptocurrencies anymore, so his position in Stripe makes him biased against cryptocurrencies, not a general expert about cryptocurrencies.
It's a fine take and that's why I linked it.
I'm aware patio11's takes are not always good, but as said earlier
> His argument is either a good or bad one
If it wasn’t this way, people would return their vehicle if they saw bitcoin value jump up 100%.
Tesla's support for cryptocurrency seems morally in the same ballpark as that politician who was wearing a cloth "masks are stupid I'm just wearing this because I have to" mask over an N95.
Instead they sell you a car and give you a sufficiently bad deal for the refund that you will only use it if you actually want the refund rather than because you want to speculate on the price of Bitcoin.
However, often brands like Apple incorporate currency risk into their higher foreign prices.
Dear internet. When are you going to get over this bitcoin thing? It is getting silly.
In addition, just because it is priced relative to USD doesn't mean it is accurate to say the transaction takes place in dollars. That is absolutely not true.
Lastly, as someone who has only bought 2 cars in my lifetime - who refunds cars? Is that common? I've never heard of such a thing. What is the return rate on Teslas?
1. Fix it for free.
2. Replace the vehicle with a new vehicle.
3. Purchase the vehicle back.
Bitcoin potentially provides arbitrage with the third option. Safety recalls are not uncommon. Suppose Tesla ships an over-the-air software change and then recalls the vehicles.
State by state Lemon-laws also might come into play.
At a minimum there is nothing buyer friendly in the clause.
Either way you get the USD equivalent back. I can't imagine someone actually caring about this. If you think it's likely that you will return a car, maybe think about such a large purchase a little more?
"If you are entitled to a refund of your payment or to a buyback, we reserve the right to refund you either the exact Bitcoin Price that you provided to us at the time of purchase"
Either way you are getting either 1. the exact amount of BTC you put in or 2. the USD value of the car.
If you buy the same car and refund when BTC is worth $25k, they will refund you $25K worth of BTC.
Heads they win, tails you lose.
> If you are entitled to a refund of your payment or to a buyback, we reserve the right to refund to you either the exact Bitcoin Price that you provided to us at the time of purchase or an amount of US Dollars that is equivalent to the US Dollar price of the product that you purchased, at our sole and absolute discretion, taking into consideration operational efficiency.
Maybe I am misunderstanding this but it clearly says the BTC Price that you provided at the time of purchase. So if you paid 2.150000 BTC for it that is the price you would be refunded?
"or an amount of US Dollars that is equivalent to the US Dollar price of the product that you purchased, at our sole and absolute discretion, taking into consideration operational efficiency"
The second part of the clause refers to the USD refund amount if they choose to refund in USD and has nothing to do with the first part about BTC.
EDIT: I did not miss the either. I understand you can be refunded in BTC OR USD. The entire point was that if you are refunded in BTC it will be for the BTC amount you paid which is in direct contradiction to what tptacek said. It's just wrong.
Of course, they could choose to pay you in USD at which point it may be worth less BTC. But you're still receiving back the full dollar amount of the car that you chose to buy. So it would be the same as converting your BTC to cash at the time of car purchase instead of buying a car. There is nothing nefarious or deceptive going on here by Tesla.
The other direction is not true: if BTC skyrockets up to $100k/BTC before you ask for a refund, you're getting $50k/USD back.
I think California allows returning a used car within 2 business days and under 250 miles.
The author seems to misunderstand how the transaction happen and how laws look in a lot of countries.
In many places, the only time you have to pay taxes related to Bitcoin is when you convert it to another currency, be it Euro, American Dollars or Ethereum's Eth, you pay when you change it, and it's usually capital gain tax that gets paid.
By allowing you to buy a Tesla in Bitcoins directly (since Tesla runs their own nodes as well, apparently) you can avoid having to pay those capital gain taxes, as you're not actually realizing any gain, you're using it as a currency and in it's current form. You're not converting your Bitcoin to USD and then use that as purchase, you're purchasing it with Bitcoins directly.
All this is very early though, and I don't know of any court cases so both my opinion and everyone elses are just guesses at this point. Gonna be interesting to see what happens in the future.
Disclaimer: since I'm writing "how laws look in a lot of countries" I'm obviously not putting forward a US-centric view that many replies seems to assume I mean. And also, obviously don't take random advice on the internet regarding tax laws, check your own countries.
https://www.irs.gov/newsroom/like-kind-exchanges-now-limited...
>Effective Jan. 1, 2018, exchanges of personal or intangible property such as machinery, equipment, vehicles, artwork, collectibles, patents, and other intellectual property generally do not qualify for nonrecognition of gain or loss as like-kind exchanges.
No, I'm not and I don't need to disclaim what my profession is either. What is with the internets obsession about "IANAL"? Isn't it more proper to assume that someone is NOT a lawyer, accountant or whatever if they don't say anything, than the opposite? (Irony is that you failed to add "IANAL" to your comment, should I assume you're actually a lawyer?)
Sure, IRS might act like that but not every country, and if you read my comment again you see that my view is broader than just the IRS.
Because it's common online etiquette. Just like when the countless google or amazon employees that hang around HN comment on google or amazon stories, they give the disclaimer: I work for google/amazon.
>Sure, IRS might act like that but not every country, and if you read my comment again you see that my view is broader than just the IRS.
I do see you made a blanket statement that was easily disproven for the US, and at no point did you say that the US wasn't included in "most countries". So exactly which countries are you referring to, and can you provide a citation to the relevant tax authorities for those countries that you referenced when making your original claim?
Crypto just makes it easier for the time being because the transaction are not as well regulated or tracked as stocks or other valuable assets.
Fine art is constantly used for example for under the table deals but we have a name for it - tax evasion.
If you bought Bitcoin for £1000 and now it’s worth £100000 if you want to buy something for £100000 you can buy you also need to pay capital gains tax on £99000 worth of gains.
From Tesla’s perspective they don’t care they assume and rightfully so that you are responsible for any taxes and accounting obligations on your end, it’s not any different than buying a Tesla with normal currency from profits you haven’t paid taxes yet on.
It doesn’t even have to be a trade with a mutual exchange, if you say want to gift a house to your kids or your spouse and you transfer ownership you’ll be liable for capitals gain tax even tho no sale has actually occurred.
It's not "just guesses at this point". The IRS has explicitly stated that cryptocurrencies are taxed as assets and subject to normal capital gains. This means they work like every other asset subject to capital gains. I can't transfer shares of stock to a car dealership, or pay with gold coins, to avoid paying capital gains or people would have been doing this forever. And similarly I can't do it with bitcoin. You definitely owe capital gains on the US dollar purchase value of the car minus your cost basis for the amount of bitcoin spent.
I have to say though, I am in awe in some way at the boldness of your claims. What must be going on in your head to take something that you have no idea about, and then just assume without looking into it even a little bit that nobody else could possibly have any idea about it either, and confidently declare that as fact?
Let's remember the "Assume good faith" guideline and also remember that not everyone here is having a US-centric view on how things are. Seemingly you read about half of my comment but not the rest, as I never "confidently declare[d] that as fact".
I can’t think of a single country in the EU either in which you can trade any asset for another without a capital gains assessment.