Tesla Now Accepts Bitcoin as Payment (nytimes.com) 89
Elon Musk, the chief executive of Tesla, said on Wednesday that the company now accepts Bitcoin as payment for cars in the United States. From a report: Tesla will hold the digital currency, rather than convert payments to dollars, and handle the crypto transactions internally, Mr. Musk said. "Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency," Mr. Musk explained in a tweet. That means when someone buys a Tesla with Bitcoin, the price of the car could well rise -- or fall -- over time. In other words, Tesla is turning one-time payments into assets with shifting value, or, essentially, investments. Buyers outside the United States will have the option to use Bitcoin "later this year," Mr. Musk said. Mr. Musk said last month that the company bought $1.5 billion in Bitcoin for its treasury. The announcement on Wednesday confirms speculation in the crypto community that Tesla would not simply contract out payments to a third-party processor and treat Bitcoin like dollars. Musk tweeted, "Tesla is using only internal & open source software & operates Bitcoin nodes directly."
News? (Score:1, Flamebait)
I thought I saw this story a year ago. And two years ago...
This sounds like more of the Musk hype train to me.
Re: (Score:2, Insightful)
No you're just being a miserable cunt trying to sound intelligent.
Re: (Score:1, Troll)
Except that this was actually announced on 8 February of this year and Musk wasn't a cryptocurrency advocate until recently, so apart from being totally wrong, you're totally right!
Re: (Score:2)
During the pandemic, time passes non-linearly. February 8th may have been both one year and two years ago.
An important point: They keep the BTC (Score:1)
"Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency."
https://twitter.com/elonmusk/s... [twitter.com]
Re: (Score:2)
So how are they paying the taxes on the sale?
Re:An important point: They keep the BTC (Score:4, Informative)
Re: (Score:2)
So assuming Tesla sell 1000 cars and make $50M in revenue in crypto, what can they do with it? Unless their supply chain also uses Crypto they are trapped in an extremely volatile market which
Re: (Score:1)
With the cash from other buyers :P Same as they're paying for COGS and all other expenses.
Re: An important point: They keep the BTC (Score:2)
However price of the car in BTC is following BTC price in USD very closely. According to the Tesla support page, the BTC price varies and once you choose to buy, they put a timer on your screen and your price is frozen only for that duration.
https://www.tesla.com/support/... [tesla.com]
Can you get your refund in Bitcoin (Score:5, Insightful)
Tesla is popular with its $100 down preorder that is fully refundable, if you want to cancel your order. Could you get it back in Bit Coin?
But what about the reverse if say I put $100 worth of bitcoin down for a Cybertruck today. Then when it is ready for me to buy in 2 more years and bitcoin grows in value of 10x... When it comes to purchase it, will I get Its price - $100 or its Price - $1000?
The problem with bit coin is that they are too volatile. You never want to buy anything with them, because if you hold onto them longer you could buy a lot more in a rather short amount of time. It becomes the Osborn Effect of currency. You don't want to buy anything now, because in a reasonable waiting time you could get more.
Re: (Score:1)
Re: (Score:1)
Re: (Score:2)
Would Tesla convert it to USD on their books, though? In other words, if you put down 0.0018 btc, and then the price of bitcoins went way up would they give you back the same btc, or would they keep the difference and give you a proportionally smaller btc back? What about if the price crashes?
Re: (Score:2)
Would Tesla convert it to USD on their books, though? In other words, if you put down 0.0018 btc, and then the price of bitcoins went way up would they give you back the same btc, or would they keep the difference and give you a proportionally smaller btc back? What about if the price crashes?
Well... They're a company so they'll try to do whatever benefits them the most. Whether they get away with it is another matter.
Re: (Score:2)
This should be spelled out in the fine print. I would guess they convert it to local currency, so if you get refunded, you get $100, not some BTC, but that has to be clear. Also, for the actual purchase, they have to treat it as a sale in local currency for sales tax, as the tax amount has to be handed over to the government in local currency.
I expect in practice, Tesla will account for this as buying the BTC in USD from the customer at the time of transfer at the current exchange rate using Tesla's cash
Re: (Score:2)
Re: (Score:2)
Tesla is popular with its $100 down preorder that is fully refundable, if you want to cancel your order. Could you get it back in Bit Coin?
But what about the reverse if say I put $100 worth of bitcoin down for a Cybertruck today. Then when it is ready for me to buy in 2 more years and bitcoin grows in value of 10x... When it comes to purchase it, will I get Its price - $100 or its Price - $1000?
My guess is you only get what the value was in currency, not Bitcoin, at the time of the deposit, applied to the purchase. This gives Tesla all the upside in any increase in valuation while limits their loss if BitCoin tumbles to $100 per car; if Bitcoin goes up 10x then Tesla gets the difference.
The problem with bit coin is that they are too volatile. You never want to buy anything with them, because if you hold onto them longer you could buy a lot more in a rather short amount of time. It becomes the Osborn Effect of currency. You don't want to buy anything now, because in a reasonable waiting time you could get more.
Or less if it goes down.
Re: (Score:3)
The order fee is "non-refundable".
From the Model X site:
Re: (Score:2)
The problem with bit coin is that they are too volatile. You never want to buy anything with them, because if you hold onto them longer you could buy a lot more in a rather short amount of time. It becomes the Osborn Effect of currency. You don't want to buy anything now, because in a reasonable waiting time you could get more.
It's really the same problem with traditional investments that are supposed to appreciate in the long term. But people still need to buy things like food and housing. You also see people buying and selling traditional investments for various other reasons -- seeing better investment opportunities, starting their own companies, etc.
Also, we still have a kind of Osborn effect in computing, because better and cheaper hardware is always coming out next quarter. But people still buy hardware because they need
Re: (Score:2)
What nonsense is this. The Tesla site says the $100 down is non-refundable like 100 places and every step of the deposit process. A lot of people may be surprised when they want their $100 back.
Re: (Score:2)
"Too Volatile" (Score:1)
The problem with bit coin is that they are too volatile.
Bitcoin has been hanging around $50k for some time now.
Meanwhile in two years, what can that $100 you put down buy you when you get it back? Something like 5x less gas for example, if you had put it down before last year and got it back now.
In two years there's a very good chance the fiat $100 will be worth way less. Just as good a chance as the BitCoin being worth 10x current value. Remember that now we are printing around three trillion new dollar
Re: (Score:2)
Price - $100. They're clear that they will quote you a BTC-USD conversion price they will honor for some fixed amount of time, but all prices are in dollars.
Can they comeback 3-7-30 days later & say pay (Score:2)
Can they comeback 3-7-30 days later & say pay more or re will repo the car? If BTC drops in the cooling off period
Re: (Score:2)
Re: (Score:2)
Au contraire, mon frere. The value of bitcoin is relevant because that value changes every minute and is based on the dollar. If I give you 1 btc which is valued at $50K today, and a week later you give me a btc back, its value could be higher or lower than what I gave you. If it's higher, do I give you back the extra? If it's lower,
Re: (Score:2)
and is based on the dollar
This is not true.
Bitcoin can be purchased with USD, EUR, other cryptocurrencies, etc etc. It's value is not "based" on anything other than the intersection of buy and sell orders. Most exchanges list the BTC/USD price as well as several others.
Re: (Score:2)
Re: (Score:2)
It depends how the deal was structured, and wouldn't (shouldn't?) be treated any different than any other currency conversion. Are we transacting in btc or USD? If you sold me something and we established the value at 1btc, I'd transfer you 1btc, and would expect that 1btc to be returned if I exercised my right to cancel the transaction. If we agreed that the thing was worth $50,000, and you agreed to accept payment in btc then I would transfer you whatever the spot price for $50,000 worth of btc was. If
No (Score:2)
They are very clear that they offer a BTC price good for X amount of time, and as long as the transaction is initiated in that time they will honor the conversion rate they quoted.
Brilliant (Score:5, Insightful)
Now you can buy an electric car that will generate carbon credits to be sold to big polluters and pay in wasted energy!
Tesla is only green in the $ sense
Re: (Score:2, Insightful)
Re: (Score:1)
Now that's a payment system I can get behind!
Re: (Score:2)
We can't have a bitcoin story without tulips being mentioned.
Re: (Score:2)
We can't have a bitcoin story without tulips being mentioned.
Probably because they are lot like Tulips...
Re: (Score:2)
Re: (Score:1)
Of course it is. Humans require intangible benefit to spend money on toys, and deception confers intangible benefits.
The effective way to fund new tech is selling toys to rich people so they can virtue signal. In other news hobbyists don't "need" expensive video cards (and gaming is pure luxury) but their desires pay for the R&D. The automobile itself was a rich man's toy.
An extra dose of magic fairly dust (Score:5, Insightful)
People are starting to notice Tesla's valuation doesn't make sense as a car / battery company.
Maybe it makes sense if they're also a cryptocurrency company?
Re: (Score:2)
There are two sides to any company when it comes to stock. The first way that is more old-school, is you look at the whole idea of income, assets, and earnings per share as the way to decide if a stock is overvalued or not. The problem is that when a company is changing the dynamics of the industry they play in, then the long-term value should be used(where will things be in 5-10 years?).
Tesla is on the cutting and even bleeding edge when it comes to all-electric vehicles, power distribution, and batter
Will believe it .. (Score:1)
When I see BTC pricing on their website. Until then it's hype talk.
Re: (Score:2)
Today they accept Bitcoin as a payment method on their website. Bitcoin pricing in the future seems like an odd decision, but the strategy might be to see if holding it as a treasury asset (and accumulating) helps to reduce volatility enough that you can list a price in BTC.
I’m not quite sure how they are going to make it more stable (relative to a basket of currencies), but their CFO is smarter than me. It still doesn’t make me want to own Bitcoin, but it validates it in many ways. Maybe the
Re:Will believe it .. (Score:4, Insightful)
Did you bother to even check?
It's right there on the order screen.
https://www.tesla.com/models/d... [tesla.com]
Re: (Score:2)
Yeah, and it says "$100 worth of bitcoin, est. 0.00xxxx bitcoin" So it very much doesn't do what the OP is talking about.
Re: (Score:2)
I did check. Maybe my original post was not very clear - the cars are not priced in BTC, they are priced in USD with the option to accept BTC as payment at spot exchange rate. The price for a base model 3 is $36,490 USD
Re: (Score:2)
It's possible they'll list a price in BTC, but they'll probably update it regularly (hourly? faster?) to eliminate the arbitrage. Of course, they may intentionally let the arbitrage play work for the same reason that stores offer a 10% discount - FOMO instant purchases.
Re: (Score:2)
It's possible they'll list a price in BTC, but they'll probably update it regularly (hourly? faster?) to eliminate the arbitrage.
But this one of the many problems with BTC, prices jump around so quickly and transaction times can be slow during a crash that you introducing a huge amount of risk for no apparent gain.
Let's say they update hourly and the market crashes 20% in that time. Some miners can buy in at the reduced price and buy a Tesla before they update their exchange rate, meaning a 20% loss on each car.
If they add in a margin to account for exchanges fluctuations, the margin would have to be too high to be useful since Cr
Circumventing the IRS (Score:4, Interesting)
If I buy a car directly with BTC proceeds without exchanging for $USD first, I don't need to report any gains to IRS, right?
Also the government doesn't get to levy sales tax on this transaction either?
Asking for a friend....
Re: (Score:2)
You don't have to report it to the IRS in the sense that a financial institution won't report it. But that affects whether you will be caught. It is a legal requirement to report it to the IRS (technically all barter must be reported to the IRS) and to pay tax on the difference between the cost of acquiring the BTC and the cash value of the Tesla.
Actually, legally, Tesla may have to report it to the IRS. So you may be caught easily.
Sales tax also applies, but online sales evading sales taxes is a common,
Re: (Score:2)
No, but maybe. Tesla is probably accounting for this as buying the BTC from you at the current exchange rate, and they'll certainly collect an extra 6% or whatever the local sales tax rate is, sending the correct local currency amount to the government.
But while you should pay capital gains tax on the difference between the purchase price and the exchange value, this is likely the simplest way to cheat on your taxes. So unless you get audited, it's likely that you'll get away without paying. But don't ri
Re:Circumventing the IRS (Score:4, Interesting)
How is that any different if you paid with cash?
Re: (Score:2)
That is the strange thing. Setting a fixed dollar price for a Tesla vehicle means that that is the value. Bitcoin value vs. the dollar changes by the minute. So, does the Bitcoin PRICE for a Tesla vehicle change by the minute to account for the changing value of Bitcoin, does it change daily, or what?
Re: (Score:2)
"I don't need to report any gains to IRS, right"
Gains only exist in the context of exchanging bitcoin for currency on a formal (or informal) exchange. Buying a Tesla with Bitcoin is, from a capital gains perspective, no different from buying a bottle of water with Bitcoin.
Now, there are other undisclosed taxes: Federal sales taxes. State sales taxes (which are often levied at the time of registration). Local sales taxes. State and Local registration fees, etc.
But as far as capital gains go, you can't be tax
Re: (Score:2)
"I don't need to report any gains to IRS, right"
Gains only exist in the context of exchanging bitcoin for currency on a formal (or informal) exchange. Buying a Tesla with Bitcoin is, from a capital gains perspective, no different from buying a bottle of water with Bitcoin.
Now, there are other undisclosed taxes: Federal sales taxes. State sales taxes (which are often levied at the time of registration). Local sales taxes. State and Local registration fees, etc.
But as far as capital gains go, you can't be taxed on something that you didn't profit from.
As far as the US IRS is concerned, both parties must report barter income as income on their tax return. So yes, buying a Tesla with Bitcoin makes the transaction reportable. it would not qualify, IMHO, as a like kind exchange.
Re: (Score:2)
You are absolutely incorrect.
"bartering income"? What are you talking about?
Re: (Score:2)
You are absolutely incorrect.
"bartering income"? What are you talking about?
I used that term to describe when good s or services are exchanged instead of actual cash being paid. The IRS considers that a taxable event, as well as if cryptocurrency is used; although the rules are not quite the same. In the end, paying with cryptocurrency can trigger a tax liability.
Re: (Score:2)
If you're talking about 1099-B, this is NOT the same as a capital gains tax. Totally different things.
Re: (Score:2)
call me when they start accepting monero.
Re: (Score:1)
Two farmers swapping a chicken for a pig are still required to pay taxes on the value of those things.
incorrect.
The use of convertible virtual currency by a customer to pay for goods or services delivered in New York State is treated as a barter transaction. For sales tax purposes, [ny.gov] convertible virtual currency is intangible property. Since the purchase or use of intangible property is not subject to sales tax, any convertible virtual currency received by a party to a barter transaction is not subject to sales tax.
There are other taxes than sales tax, such as income tax. Who knows, maybe there's a Pig Tax. But the tax on "swapping things" would have to be sales tax, I guess. In any case, you are shown suspect by example: this is one tax that applies if currency but not if barter. It does not mean the Tesla transaction is tax free (I guess it's probably not) but it does mean you should stop pretending you know things by making confidently wrong assumptions.
Re: (Score:1)
rereading what I wrote, my comment could be taken a bit disingenuous. FTR above and below the part I quoted, NYS says they will double-tax the farmers swapping pigs for chickens! Maybe I made it sound like they wouldn't tax "barter" but the poster is correct that barter is taxed, and then taxed again. There's an exception to the barter rules for "convertible virtual currency" so the two confidently-wrong parts of the comment I'm replying to were:
- assuming that obviously Bitcoins and live chicken
Re: Circumventing the IRS (Score:3)
Re: (Score:2)
Re: (Score:2)
I don't need to report any gains to IRS, right?
False (I suspect). While I'm not expert in law, gains and losses due to foreign exchange of currency is a taxable event in every country I've lived in (and on account of having earned quite a few currencies in my life it's something I had to investigate).
more opportunities for forensic accountants (Score:1)
A modest proposal... (Score:1)
Re: (Score:2)
Brb buying hood and pigeon snacks.
How about adding Etherium as well? (Score:2)
It also makes sense if they also move to accept Etherium. The difference is that you need more Etherium in terms of the numbers, but the idea remains the same. The question is if the cost will change from minute to minute as the value of Bitcoin and Etherium change continually. If the dollar cost stays the same from day to day, then the value if paid in crypto should change based on the value at the time of the actual transaction.
New Target Audience: Money Launderers (Score:3)
Art and property have been fantastic money laundering options for a long time (https://www.independent.co.uk/news/world/americas/police-crack-down-empty-new-york-and-miami-apartments-are-used-hide-dirty-money-a6810916.html). Bitcoin has shown to be very money-laundering friendly (as a holding option and even speculative investment), but there hasn't been particularly high-value purchase options for Bitcoin. Now three's a way to not just launder, but green-wash your ill-gotten and un-taxed gains!
What an advancement!
USA better watch out (Score:2, Insightful)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
You say all of this like it's a bad thing. The U.S. would do far better for its own citizens by keeping to its own business instead of meddling in everyone else's. The notion that the country needs to be the savior of democracy or has some kind of divine mandate is beyond stupid. A sizable part of the country is horribly upset over supposed outside interference from other countries. You'd think that there would be some kind of realization about our own actions that follow from this, but apparently that's asking a bit much.
You seem to not understand the concept of sovereignty. The US is not trying to be 'the saviour' of the world, they are looking out for their own best interests, the same as everyone else. They are just more powerful and better at it than everyone else.
Whether you recognise it or not, the US being the most powerful nation in the world is better for the rest of us than any alternative. However flawed, a nation that defends freedom and democracy is the least worst option on the table. So be careful what you w
Re: (Score:1)
America has the privileged position of being the de-facto currency of the world. [...] the world switching to another currency or a neutral currency then it loses the ability to carry such a large debt.
Warren Buffett does not think so [archive.org] (sidebox on page 4).
Re: (Score:2)
This is extremely dangerous for America, more-so than everyone else. America has the privileged position of being the de-facto currency of the world. As such many (most?) debts and whatnot are conducted in American currency. This gives the USA unprecedented control over policy. Other countries have a large part of the national debt in American dollars which causes problems if their currency weakens. America, by contrast can literally reduce their debt by chopping the value of their currency. If America loses this ability by the world switching to another currency or a neutral currency then it loses the ability to carry such a large debt.
While I totally agree with your point, however, do you think that...
Yeah, the days of Dollar Dominance is numbered.
Cars but not sevices? (Score:2)
How to make money ... (Score:2)
1. Order a Tesla in Bitcoin ...
2. Wait for Bitcoin's inevitable massive fluctuation
3. Cancel order get deposit refunded in bitcoin
4. Profit
Re: (Score:2)
I think you can remove 1 and 3 and get the same effect.
How do they pay their suppliers? (Score:1)
Have they convinced their suppliers, employees, and the IRS to accept BTC payments as well? If not, they'll have to convert a lot of BTC to USD - or take out big USD loans secured against the bitcoin.