Elon Musk broke it to the public via Twitter that Tesla is going to accept Bitcoin. Within minutes after his initial tweet international news media was all over the topic. Not only because Musk is creating a hype for cryptocurrencies and particularly Bitcoin and Dogecoin, but also because this spark a real change with many other companies worldwide. Musk known for his role as an innovator and risk taker and being visionary.
Is this mass adoption? And if the answer is yes, what would it look like in the near future?
Buying cars for BTC
While many disciples of Bitcoin and its idea of being a peer-to-peer payment or cash system think that this is the right thing to do, others are not so convinced about the recent move of Tesla. Their concern is that Bitcoin is more of a store of value than a currency and that it is foolish to spend an asset that will grow in value over time.
On the other hand, what is a store of value good for, if it is not exchanged on the open market? It seems that a store of value cannot succeed without trade or exchange. One thing is particularly noteworthy. According to Elon Musk, Tesla will not convert the additional BTC income to fiat currency. Meaning that they are going to sell cars in order to hodl.
Mass adoption is still possible
Over the years many experts have argued that mass adoption is not possible, because BTC doesn’t scale and isn’t adopted by merchants. That has changed and not only Tesla is accepting BTC. PayPal is integrating it as well, meaning almost all online merchants will accept BTC one way or another.
The missing part of this puzzle is the infrastructure. Many merchants accept Bitcoin, but only using a payment processor. According to Musk, Tesla is using their own Bitcoin nodes and infrastructure. This is a strong hint that Musk and Tesla are aiming to support the Bitcoin network itself. The next level of true adoption would require Tesla to pay the companies suppliers and partners with BTC. Even that staff would need to receive their payment in Bitcoin.
This seems to be far fetched and neither Tesla nor Musk have made any claims to plan such things. But true mass adoption would require them to leave the US-Dollar behind and switch completely to Bitcoin.