Yet another article on Bitcoin.
In a way, yes! But this one won’t tell you to buy Bitcoins. It also wouldn’t implore you to invest in Bitcoins – and won’t say that by not doing so, you’re missing out on a massive get-rich-quick train.
But, all this buzz about the arcane blockchain, cryptocurrencies, and mining should get you thinking: why is the world in a Bitcoin frenzy?
Well, for starters, it is a super complicated thing. For most people, the discussion on cryptocurrencies starts and ends with the rising and falling price of Bitcoins.
But it is way more than that.
Those who are crazy about Bitcoins have their jargons – HODL, FUD, Sats, Whale, Pump and dump, and bagholders.
There are cryptocurrency aficionados who are mad about this digital currency. For them, this is the power to unleash their dream. And they haven’t been proven wrong until now.
There is a major FOMO about cryptocurrencies, especially Bitcoins.
Those who have these crypto-assets are holding on to them dearly. Those who don’t have them are looking for ways to buy them. And those who can’t buy are at least reading about it.
And it is not only individuals who are riled up about the prospects of cryptocurrencies. Big companies are also investing in Bitcoins.
Giants like PayPal, MicroStrategy, and Square are getting into it. Even MasterCard is thinking about letting its merchants accept some cryptocurrency. Although Mastercard is the middleman, cryptocurrencies are out to cut.
Experts predict that the price of Bitcoins could hit $200,000 by the next decade, and these big companies are already fueling the prices of Bitcoins by heavily investing in them.
Tesla announced in February that it had bought Bitcoins worth $ 1.5 billion. The company also mentioned that it will eventually start accepting payments from its clients in Bitcoins.
This announcement from Tesla didn’t come as a surprise for many people.
It is because Tesla’s CEO Elon Musk has been one of the most vocal proponents of this digital currency. In February, he said, “Bitcoin is on the verge of breaking into traditional finances.
Musk said: “I am a supporter of bitcoin. I am late to the party but a supporter. I think bitcoin is on the verge of getting broad acceptance by conventional finance people.”
He regularly tweets about Bitcoins and talks about it in his interviews which keep shooting their prices up. One of his tweets earlier this year sent Bitcoin’s price up by 20%.
So, if anyone was to lead when it comes to accepting the cryptocurrencies, it had to be Musk.
So, what does Elon Musk’s and Tesla’s recent interest in cryptocurrencies mean for the auto industry?
Cryptocurrency analysts believe this will be a significant step in streamlining cryptocurrencies and allay people’s fear about them.
Buy and sell cars with cryptocurrencies
The use of cryptocurrency to buy automobiles is not a novel concept. There have been past examples of people buying cars with their digital assets.
In 2013, an anonymous buyer purchased a Tesla Model S from a dealership in Newport Beach, California. For the $100,000 Tesla Model S, he paid only 91.4 Bitcoins.
In October 2017, Peter Saddington, a 35-year old coder, made headlines when he went into a San Francisco automobile dealership and came out with a 2015 Lamborghini Huracan.
The only anomaly was that he paid for the Lambo in Bitcoins.
Saddington had been investing in Bitcoins since 2011. If we take the amount he paid for Bitcoins in 2011, he got himself a Lambo for just $115.
In 2017, one customer bought four Kias from a Georgia dealership totaling up to $150,000 through Bitcoins.
Crypto automobile dealers
It is not only about young entrepreneurs walking into the automobile dealerships with their digital wallets loaded with cryptocurrencies and buying cars.
There is an entire network of automobile dealerships – both online and physical – that facilitate transactions in cryptocurrencies.
These dealerships are a place for people to buy and sell their cars via Bitcoins and other cryptocurrencies. These cars range from hatchbacks and sedans to exotic Porsche and Ferraris.
For example, Auto Coin Cars is an online marketplace where sellers sell their cars to buyers who pay for them in Bitcoins.
Since 2019, when the company started, it has facilitated hundreds of transactions in Bitcoins.
Similarly, several other dealerships are helping crypto enthusiasts fund their cars with digital assets.
The rising popularity of cryptocurrency and the piqued interests of the masses in this highly volatile asset is a good sign for the automobile industry.
If payments in cryptocurrencies become a norm in the industry, it will simplify the car buying process.
For example, with fiat money, you first have to find your dream car. After you have identified one, you go to the dealership for paperwork. When it is done, you have to make payment.
This is done through a banking channel or by cash transfer. In case of a bank transaction, the bank also charges a fee to complete the transaction.
But, with cryptocurrencies, this process is significantly shortened. You have to find a car and ask the owner/dealership if they accept cryptocurrencies.
If they do, you simply have to transfer money from your digital wallet to the seller’s account. There are no intermediaries involved, and the transaction charges are zero since blockchains manage all the payments.
These marketplaces are quite popular among crypto enthusiasts as there are only that many things you can buy with cryptocurrencies yet.
Elon Musk might be responsible for the recent hike in Bitcoins prices and galvanizing interest in them; some people had been buying and selling cars with cryptocurrencies for a long time.
Still, if Tesla leads the industry by allowing cryptocurrencies as a payment mode, it will prove to be a game-changer in the industry.
Then, it won’t be long when you could walk into the store of any automobile manufacturer in the world and walk out with your dream car. When people ask how you paid for it, you can happily say cryptocurrency.