As Elon Musk's company, Tesla, buys $1.5 Billion in Bitcoin and teases that the company may soon start accepting the coin for payment, one has to wonder why isn't Tesla accepting the coin already?
This event is one of the latest crypto news to shake up Bitcoin – bringing with it an 8.7% increase in Bitcoin value over three days. Despite this major investment, the company has only hinted at the possibility for customers to make a Tesla payment with BTC.
Is this merely a result of the only recent bullish Bitcoin price, or is it the lack of concrete Bitcoin evolution that’s about to be radically exposed?
With respect to accepting Bitcoin for payment...
Could it be that it takes time to consider and implement? One could imagine that there would have been plenty of time taken and much calculation considered before the $1.5B purchase pushed through.
Discussions surrounding the acceptance of Bitcoin for payment could have been done at the same time. Yet both the company and Tesla investors have been quiet about their stance on cryptocurrency until now.
For those that are bullish for this new era of Bitcoin evolution, it’s important to know that there may be a blind-eye approach to the reality of Bitcoin’s capacity to evolve to a viable digital currency. This is not to dismiss its identity as a store of value. But the current Bitcoin price is what drives this idea–it has simply become an investment asset.
The suggestion that Tesla would accept Bitcoin for payment poses an increasingly important question...
...Can Bitcoin make it a currency?
...It started as a currency.
...Didn't it fail to perform well as a currency?
1) To slow to transact - the Bitcoin transaction speed has fallen behind the times. Ten minutes is the norm for a single Bitcoin transaction.
*For perspective - Visa can handle over 65,000 transactions per second.
*The Lightning Network has been proposed as a solution to the Bitcoin transaction speed issue, but for years, it hasn't manifested into much more than potential for the future.
2) Too expensive per transaction.
3) Too volatile.
Bitcoin is rising, but not without tremendous volatility. The Bitcoin value today is staggeringly different from what it was just a few days before.
As a company...
Would Tesla really tolerate the slow Bitcoin transaction speed and Bitcoin price volatility?
And perhaps more importantly...
- Could the average business tolerate it? Especially with the prospect of Bitcoin crashing at any time?
The latest Bitcoin evolution does bring up many important questions–and even opportunities. But more importantly, can the positive Bitcoin prediction over the next few years hold despite the lack of stability in the network and market?
-- If indeed Bitcoin will struggle as a currency (as it always has and is likely to continue)
-- If indeed, Bitcoin experiences increasing popularity (as it always has and is likely to continue)
-- More and more businesses are likely to consider–and even try–transacting with Bitcoin, only to be disappointed (as so many businesses were in 2017).
And this will lead to businesses and customers seeking a transactive coin that isn't slow and expensive and volatile. The market is, after all, saturated with plenty of options.
The Cardano price and Litecoin have risen and show just as much potential as the rising Ethereum value. The ETH prediction until 2025 is optimistic as well–even more so with Ethereum 2.0’s promise to fix long-standing issues. In short, buying Bitcoin isn’t the only option for businesses looking for actual digital currency.
There is merit to the Bitcoin naysayers who are now revealing this weakness.
Professor of Economics, Nouriel Rubini, was recently quoted...
"Unlike other assets like stock, gold or real estate, bitcoin fails to achieve its fundamental value proposition as a payments system."
Likewise, Andrew Bailey, Governor of the Bank of England recently said...
“Have we landed on what I would call the design, governance and arrangements for what I might call a lasting digital currency? No, I don’t think we’re there yet, honestly. I don’t think cryptocurrencies as originally formulated are it.”
And here lies the opportunity...
- Will Tesla adopt Crypto?
Yes - DONE.
- Will Tesla actually transact with Bitcoin for payment?
- Will a new coin emerge to meet the requirements to become a viable, transactional currency?
- What coin or coins shall do so?
One to watch is...
The People’s Reserve.