The News: Use Bitcoin to Buy a Tesla
On the 24th of March 2021, Tesla CEO Elon Musk announced via Twitter, “You can now buy a Tesla with Bitcoin”. Musk continues by saying, “Tesla is using only internal and open-source software and operates Bitcoin nodes directly. Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency”. Initially, this will only be available to those in the US. However, Musk stated in his final tweet, “Pay by Bitcoin capability available outside of US later this year”.
This marks a significant milestone for the mainstream adoption of cryptocurrencies, not only for bitcoin. In this post, I cover some of the possible implications such a move may have on the future of business, marketing and the world as a whole.
This could be boiled down to simply marketing and public relations, although we know how complex each of those is becoming. In adopting cryptocurrency as a method of payment for your products and/or services, you could reap the benefit of perception, being an early adopter or forward thinker. This shows your ability to adapt and change to your environment. This in itself can be a powerful motivator in the consumers purchasing decisions. I am not saying that it would be a fit for every business, but if you believe you could benefit from this consumer perception, why not.
In the world we currently live in, marketing is heavily driven by data. This data is collected for the purpose of better understanding a target audience. One of the biggest concerns, in the use of data in marketing, is privacy. However, imagine if that data still held its intrinsic properties and value, but was untraceable. This would not only allow the privacy concerns held by many to diminish over time but provide future-proofing to businesses marketing efforts. To achieve this future, the core technology of Bitcoin could be used, that being blockchain. Blockchain is essentially a digital ledger for recording information. Information stored in a blockchain is virtually impossible to change, hack or cheat by any party. Fundamentally, solving the issue of privacy for marketing.
It is well documented now, that one of the main benefits to cryptocurrency is its security and decentralised nature. In accepting a method of payment such as Bitcoin, you are giving your customers peace of mind throughout the transaction process. Each year, millions of card details are stolen and sold on the black market. This alone is a good enough reason to include cryptocurrency as a method of payment.
This could well be the motivator behind Musks decisions over the past few months, in regard to Bitcoin. He is in the car business among other things. Cars are depreciating assets, Bitcoin is an appreciating asset. If merely a stroke of genius or a well thought out plan, I believe it is one that will reap dividends. From a businesses perspective, accepting cryptocurrency as a method of payment could dramatically increase your profit margins purely through a change in price. Now, like any asset, this can both ways. Although in the case of Bitcoin, it seems to be nowhere but up.
I am not going to say fiat currency is going to just vanish off the face of the earth one day, although if anyone could make that happen it would be Musk. However, its use cases are slowly diminishing in an increasingly digital dominated world.
Small, yet bold moves like the one Musk has taken will only propel global adoption. Even from the implications covered in this post, none appear to have any negative connotation as it stands. The future for cryptocurrencies looks bright. However, what I am personally more excited about are the future implementations of blockchain technology. Especially in how it could allow data-driven marketing to continue, in an increasingly privacy-centric world.