Tesla and bitcoin: Playing “god”, bit by bit!

Tesla and bitcoin: Playing “god”, bit by bit!

Tesla has invested $1.5 billion in bitcoin and hinted that it might accept payment in cryptocurrency in the future, which created quite a ripple in the auto industry and money market as well. But, what’s Tesla’s big plan behind this move?

On January 21st this year Elon Musk of Tesla, PayPal and SpaceX fame tweeted “In retrospect, it was inevitable.” and added #Bitcoin to his Twitter profile. That caused a massive spurt in the bitcoin price by 5,000 in an hour to $37,299! On February 8th Tesla announced that it had purchased $1.5 billion in bitcoin and would accept payments in this cryptocurrency, further driving its price up to $44,141.

A few days ago, I came across a Twitter post saying “Tesla has made more profit by holding Bitcoin for 1 month than in 14 years of selling cars. Let that sink in.”

So, what is this all about? Musk, Tesla, Twitter, and Bitcoin. Is there a connection? Is there something really big being planned or am I reading too much into it?

Given my limited knowledge of cryptocurrencies, I spent some time reading up stuff available on the net as well as chatting with some domain experts on blockchain, cryptocurrency, consumer behaviour, and finance. Thanks to them, I am sharing my views on what Tesla’s big plan’ could be.

Tesla as a brand rests on two key pillars – hero and hope.

Tesla as a brand rests on two key pillars – hero and hope. Musk is the hero and electric winning the battle of tomorrow’s mobility is the hope.

Like almost all the poster firms of the 21st century, Tesla is built on one man’s personal relentless drive. Take the man away and the US government might not have lent it almost half a billion dollars in late 2009, cutting short this meteoric story.

Tesla Model S

Electric mobility becoming the mainstay of mobility for the next 100 odd years is the other huge bet that all the investors want to encash upon. Governments making statements today about electricity can make the same about ethanol or hydrogen in 2045, so much should not be resting on their future-scope.

Hence, all of Tesla’s value rests on an individual and an alternative. Tomorrow, or the day after, that alternative may be upstaged by another one, as always happens in times of feverish research and disruption. Or, even in the best-case scenario, it might become one of the three / four feasible mobility solutions of the future. I am sure Musk is hedging risks in the future. They must be working on one or two more alternate green propulsion systems.

Cryptocurrency plans to do away with the store and standard, becoming only a unit of accounting and a medium of exchange.

Okay, so what’s with Bitcoin? For those of us who understand the basic concept of a cryptocurrency, it’s like transacting on WhatsApp or Signal. Digital, peer-to-peer, decentralised, and sans servers, storage, ledgers, and administrators. When studying economics my father taught me an interesting definition of ‘money’. It goes like this – “Money is a matter of functions four – a medium, a unit, a standard, a store.”

Cryptocurrency plans to do away with the store and standard, becoming only a unit of accounting and a medium of exchange. Experts tell me it is as disruptive as the credit card was and e-commerce is. While it rests in the digital world, its foundations lie very much in a measure that is universally referred to. So, a Bitcoin will be worth an ‘X’ number of dollars and not be a stand-alone currency by itself…anytime soon. Principally it is based on an intrinsic mistrust of central banks, monetary intermediaries, and rogue governments who can alter the value of their currency at will. The Economist once described Bitcoin as “a techno-anarchist project to create an online version of cash, a way for people to transact without the possibility of interference from malicious governments or banks.”

‘Techno-anarchist’ – that is exactly what Musk too is! He has brought intense disorder into the world through PayPal, SpaceX, Tesla, OpenAI, and Hyperloop. Business-as-usual has always been shaken up. The establishment be they governments or corporates have been made uncomfortable.

Elon Musk loves playing “god” bringing to us mortals things that otherwise remained confined to the pages of a Jules Verne, H.G. Wells, or Arthur C. Clarke novel.

Therefore, the relationship with Bitcoin is expected as Musk wants to disrupt the electric mobility world once more. He sees opening up another transaction method as in line with setting the benchmark once again. Competitors like Nio, Xpeng, and VW might be catching up on vehicle interface, BMS, range, and software, so Tesla will need to be seen as the eternal rebel once more, supporting the cause of the evangelists.

Interestingly, ‘Satoshi Nakamoto’ created Bitcoin in 2008, the year Musk took on the role of CEO of Tesla moving aside Martin Eberhard. Nobody really still knows whether Satoshi Nakamoto is an individual or a group of people. For all you know, Musk might have been in that group. Not beyond him.

Musk loves playing “god” bringing to us mortals things that otherwise remained confined to the pages of a Jules Verne, H.G. Wells, or Arthur C. Clarke novel. And he does this bit by bit, hoping that at least one of his many creations will once again thaw the ‘ice age’. Making him a bigger god, reminding me of the lyrics from a Roger Waters song,

“God wants goodness,

God wants light,

God wants mayhem,

God wants a clean fight.

What God wants, God gets!”

Also Read: Tesla cars in India: Key facts you need to know

(Avik Chattopadhyay is co-creator of Expereal India. Also, he is former head of marketing, product planning and PR at Volkswagen India. He was associated with Maruti Suzuki, Apollo Tyres and Groupe PSA as well)

(Disclaimer: The views expressed in the article above are those of the author’s and do not necessarily represent or reflect the views of Autofintechs.com. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.)

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: