Elon musk investing in bitcoin
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Tesla: Sells carbon credits to buy Bitcoin, which requires as much energy not always Green energy as a small country to mine Bitcoin is a form of digital money.
This means it doesn't have a physical form. Instead, units of digital currency are traded over a computer network.
What is Bitcoin and how does it work?
It operates over a global network with thousands upon thousands of nodes - a machine within a network like a computer or some other device - which together process and store transactions. Explaining its investment on Monday, Tesla said that it wanted to maximise returns on cash lying dormant in the company's accounts.
› /02/22 › tesla-has-madebillion-profit-on-its-bitco. Elon Musk has been promoting cryptocurrencies on his Twitter account in Tesla's move into bitcoin represents an investment of a significant.
It also expects to accept payment for its electric cars in Bitcoin in future. Shares of companies that provide trading platforms for Bitcoin and the technology to mine the cryptocurrency have surged in China, South Korea and Australia, and big computer chip-making firms such as SK Hynix also rose.
Bitcoin has had some interest from big investment firms, including Blackrock, which recently changed a handful of investment mandates to allow some of its funds to invest in the currency. However, central banks remain sceptical about the cryptocurrency.
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In October, Bank of England governor Andrew Bailey cautioned over Bitcoin's use as a payment method, saying it lacked "intrinsic value" unlike cash or gold. Tesla is not the first company to accept bitcoin as a payment method. Tech giant Dell, furniture company Overstock, and travel site Expedia started accepting bitcoins years ago.
The U. Tesla did not specify when it will roll out the bitcoin payment option, or in which countries buyers would be able to pay for cars in the cryptocurrency.
The EV maker has a big following in Asia -- particularly in China, a big part of its recent sales success. But Beijing prohibits trading and transactions of cryptocurrencies.
In Japan, an existing subsidy scheme of up to , yen for electric vehicles may incentivize Tesla buyers to stick with the national currency. Paying with bitcoin may make it more complicated for buyers to get the subsidy, which may rise to , yen in the next budget from April.
The upcoming budget also includes new subsidies for home charging docks. While some believe the announcement by Tesla will herald wider adoption of the cryptocurrency by the general public, for the time being it seems a niche option.
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Over the next decade? Who knows," said Ives at Wedbush. Sign up to our newsletters to get our best stories delivered straight to your inbox. Stay ahead with our exclusives on Asia ; the most dynamic market in the world. Stay ahead with our exclusives on Asia. Get trusted insights from experts within Asia itself. But even if we accept the limit at face value, there is no limit on the creation of other cryptocurrencies. There are literally thousands of them already, such as Litecoin, Tether and Dogecoin.
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In any case, just because something is in limited supply, that does not inherently make it valuable. Another argument for Bitcoin says it could be an alternative to traditional currency for making payments.
The first purchase made with Bitcoin was more than a decade ago: two pizzas, paid for with 10, bitcoins. Despite the hype, very few vendors accept Bitcoin and hardly anyone pays with it.
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A Sydney art gallery that accepts Bitcoin has never had anyone buy anything with it, while a bar that accepts it reports no customers using it for years. Even some crypto conferences refuse to accept Bitcoin.
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This is unlikely to change materially. Tesla has hinted it may accept Bitcoin in future , but so far does not.
Elon Musk latest splash has raised eyebrows. But even the lower estimates are that it results in more carbon emissions than Estonia. It should be considered speculation at this point. Despite the hype, very few vendors accept Bitcoin and hardly anyone pays with it. Some institutional investors are also wary of the price volatility of Bitcoin.
There are inherent limits to the ability of Bitcoin to provide payment services. Transactions may be stuck in a queue for hours. If any electronic currency becomes a significant payment medium, it is likely to be a central bank digital currency which would be legal tender and able to be used for very large numbers of transactions. Musk has plans to colonise Mars , so maybe he will declare Bitcoin the legal tender there.
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