It’s happening. Bitcoin is being accepted by a major company as an exchange of value. I have been dreaming about this very day for eight years. I distinctly remember how big of a deal it was when Bitcoin was being accepted for Alpaca socks, and now you can use your Bitcoin to purchase a car! Believe it or not, a year ago, I asked when Tesla would be willing to trade their cars for my Bitcoin on the TeslaMotors subreddit too. I was mostly laughed at or told it is not happening.
With Tesla being the first-movers of the world and constantly dragging humanity forward whether we want to go or not, I expect more companies will follow suit in accepting Bitcoin as a form of payment. So naturally, when I say to my friends or random people on the Internet that I am going to buy a Tesla with Bitcoin, they immediately think, “Why would you want to spend your Bitcoin? Why not get a loan or convert to fiat?”
(Sure beats the “What’s Bitcorn?” or “Why are you wasting your money on a Ponzi scheme?” questions I would immediately receive when mentioning Bitcoin years before, but I digress).
First, I should explain why I want a Tesla in the first place. I will do this quickly because there’s already thousands of videos and articles that have discussed this ad nauseum. But there are two main reasons why I want a Tesla vehicle.
- Safety — Tesla vehicles have been topping the charts for safety year over year. This is my number one reason is because last December I had a wonderful event happen in my life; the birth of my first child. Not having an engine that can come into the passenger or driver seat in a front-end collision is a huge safety feature that can’t be replicated from a non-EV.
- FSD — Full self-driving vehicles are something I have envisioned for the world ever since I first saw iRobot back when I was a kid. Whether Musk delivers or not isn’t part of the scope of this article. I just have so much excitement for this new technology and the prospects of it that I spend most of my free time watching Teslas on autopilot do u-turns and driving on city streets. You might not need a car in the future, or a garage, and maybe stores won’t even need parking spaces! The world is going to change a lot once FSD is figured out. My love and passion for technology are exactly what makes me excited about buying a Tesla and also is what caused me to read about Bitcoin ten years ago! It still took two years for me to really “get it” but at least I got in when I did.
Net Present Value and Gambling
Picture this: I am going to give you $5 right now, or I can give you $6.25 with 80% certainty of success but a 20% chance of losing the $5; which would you pick? Most people will pick the $5 since it is guaranteed money and the negative effect of losing money is greater than the positive effect of gaining money. Mathematically, given infinite trials, the 80% gamble is worth $5. The two scenarios are essentially the same. Yet to us humans, they feel different. We only have one roll of the dice, not infinite, so if it happens to be that one time it doesn’t go in our favor and we lose, the $5 we lose feels much more significant than the extra $1.25 we received from the gamble. Having survived two major Bitcoin crashes of 80% value drop, I know the sinking feeling of watching your investment portfolio deflate before your eyes. I remember my wife begging me to “just sell one” Bitcoin to pay for our wedding or our honeymoon when Bitcoin was $17,000. I knew what I had thought, and I wasn’t selling for fiat! We went on our honeymoon, and I watched the price plummet not shortly thereafter. Worse yet, we spent all of our money on the wedding and honeymoon, so I didn’t have any cash on hand anymore to invest in Bitcoin after it crashed. All I could do was “Monday-morning Quarterback” myself as to how much Bitcoin I could have if I just had listened to my (at the time, soon-to-be) wife. This was after I had invested more than I could afford to lose three years ago at $1,100, only to watch it drop to $300 (I think) days after I sent the money. I had to borrow money from my Mom to pay for my roof because of that purchase. Lessons learn; hard.
So having watched how volatile Bitcoin can be and is, I do not want to be on the other end of an 80% correction without anything to show for it this time. Yes, Bitcoin could go up to $100,000, and I might be able to purchase a Tesla for 0.5BTC instead. That is not guaranteed, and it could also take 6 months or more. Who knows? But what I learned from my experience in hodling, pigs go to slaughter.
In the end, I will still have a Tesla, as stated above, one of the (if not the) safest cars on the market. So if it avoids an accident because Autopilot intervened, then I can praise myself for a wise decision. I’m immediately reminded of a phrase I learned on my trip to Abu Dhabi. “He’s trying to be the richest person in the graveyard.” I’ve been hodling for almost ten years. It’s time to reap some of those rewards.