It is only a matter of time before Tesla shuts down "bitcoin payment", and the payment C is still a stable currency in US dollars
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Editor of this issue | Colin Wu
Tesla has attracted a lot of attention by accepting bitcoin payments, but from historical experience, this may still be a marketing by Silicon Valley Iron Man. Future cancellations are highly likely.
Since the birth of Bitcoin, it has continued to attract the attention of the world. According to the Bitcoin white paper, it is a "peer-to-peer electronic cash" system. Therefore, for many years, some people have been trying to use Bitcoin for online payments.
The most famous one is that on May 22, 2010, a programmer named Laszlo Hanyecz bought two pizzas with 10,000 bitcoins on the bitcointalk forum, which became one of the legendary events in the history of bitcoin development. The day of May 22 is also named "Bitcoin Pizza Day" by Bitcoin enthusiasts.
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1. Some companies that accept bitcoin payments have stopped accepting bitcoin
As a novel payment method, Bitcoin is naturally the first to be favored by technology companies. Some companies related to the technology field have tried to accept Bitcoin payments. However, many companies have stopped accepting Bitcoin after a period of time. For payment, this list includes the computer brand Dell, the online forum Reddit, the gaming platform Steam, the airline hotel booking platform Expedia, etc.
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2. The experience of using Bitcoin to pay is not optimistic
Using Bitcoin to pay online is not a good experience. According to the announcement that the game platform Steam stopped accepting bitcoin payments, due to the high volatility of bitcoin prices, users need to complete payment with bitcoins within a certain period of time, and due to the characteristics of bitcoin network congestion, the bitcoins paid by users Coins are often not confirmed within a certain period of time.
This creates a problem. It is very likely that when the transaction is confirmed, the user needs to pay another bitcoin, and this supplementary bitcoin will face the problem of new confirmation and transaction fees again, which makes it seem difficult to trade with it. Very inconvenient.
American online payments giant Stripe completed a $600 million funding round on March 14, bringing its valuation to $95 billion. The giant was one of the platforms that supported bitcoin payments in 2014, and stopped supporting bitcoin in 2018 due to congestion reasons(1).
At present, the main platforms that provide bitcoin payment are Bitpay and Coinbase Commerce provided by Coinbase, occupying most of the market share of bitcoin payment. However, for users, the experience of paying with bitcoin is not good, because compared with paying with fiat currency, users have an additional cost of miner fees, so for small orders, paying with bitcoin is not cost-effective , and often face the problem of overtime confirmation.
In 2018, Bitpay began to add support for BCH in addition to Bitcoin. Since then, both Bitpay and Coinbase Commerce have added support for more digital currencies. For example, Bitpay has added support for ETH and XRP in addition to btc and bch Coinbase Commerce has added support for stablecoins USDC and DAI.
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3. There are compliance costs for accepting cryptocurrency payments
Both Bitpay and Coinbase Commerce are payment processing platforms. They are like credit card companies. After accepting cryptocurrencies, they settle in fiat currency to merchants after deducting handling fees (merchants can also choose to keep bitcoins). So in fact, when merchants use them, it's not much different from using a platform like Stripe, because all they receive is fiat currency.
For those merchants who do not want to rely on Bitpay, there are currently solutions like BTCpay, which allows merchants to directly accept Bitcoin payments from users. But in doing so, there are compliance issues, because due to the anonymous nature of cryptocurrencies, many coins come from gray or black areas. If you want to avoid receiving such coins, merchants need to purchase blockchain analysis companies (such as Chainalysis) Or CiperTrace) to ensure the safety of received funds, but this will further increase the cost of merchants. Instead of doing this, it is better to leave the matter of compliance to professional platforms such as Bitpay.
But even a professional company like Bitpay faces the problem of unknown sources of funds. According to a [Notice](2) issued by the U.S. Department of the Treasury on February 18 this year, from 2013 to 2018, Bitpay helped countries and regions on the U.S. sanctions list (including Crimea, Cuba, North Korea, Sudan, Iran) and Syria) to conduct transactions with Americans in violation of the relevant sanctions laws, the number of transactions reached more than 2,000, and the amount was about 129,000 US dollars. To this end, Bitpay paid the U.S. Treasury Department $507,375 in settlement.
In other words, if a person in Iran purchases a Steam game through Bitpay, Bitpay will need to pay a fine for this, and the total amount of the fine far exceeds the amount of the transaction.
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4. Whether Tesla accepts bitcoin payment can continue
Although it is not practical to accept bitcoin for online payment, because bitcoin, as a new thing, has its own news effect over the years, many companies are willing to use "accept bitcoin payment" as an effective public Means, whether it is Dell or Steam, have been on the headlines of various media after announcing their acceptance of Bitcoin payment. Although the business generated by Bitcoin may not be many, they can get a lot of free advertising opportunities. The company is Tesla.
After Tesla announced that it would accept bitcoin payments, it not only captured the headlines of major news, but also caused the price of bitcoin to rise by $3,000 in an instant. According to Musk, Tesla will run its own bitcoin nodes, using open-source software, and will not convert received bitcoins into fiat currency.
At the same time, the refund [clause](3) regarding the use of Bitcoin is also very interesting. Tesla states that when users pay with Bitcoin, they are equivalent to paying the equivalent amount of Bitcoin based on Tesla's US dollar price at the time. When the user requests a refund, Tesla can choose to return the user's bitcoin or the equivalent amount of US dollars, and the user has no right to choose. For example, if a user spends one bitcoin to buy a Tesla when the bitcoin price is $50,000, and the bitcoin price has risen to $100,000 before picking up the car, and the user requests a refund, Tesla can Choose to refund the user $50,000, which is only equivalent to 0.5 bitcoin. Conversely, if the price of bitcoin drops to $10,000 when the user requests a refund, Tesla can choose to refund the user one bitcoin instead of the $50,000 when buying the car.
Such a refund policy is a bit difficult to understand, because according to Musk, Tesla did not convert the bitcoins used by users to buy cars into legal currency, and theoretically it should be possible to refund users the same amount of bitcoins. Such a policy may itself not encourage users to pay with Bitcoin. As for the problem of arbitrage, other restrictions can be used to solve it.
In any case, Tesla has earned enough attention by supporting Bitcoin payments, but how many users will use Bitcoin payments, and whether Tesla will stop accepting Bitcoin after enjoying free PR like other companies in the future. Tokens, probably need to be known from future Tesla announcements.
However, with the rise of stablecoins, the application of compliant stablecoins such as USDC, PAX, and BUSD in compliant fields, and the application of USDT and DAI in non-compliant fields have begun to gain a firm foothold in encrypted payments. The trading volume of USDT has been at the top of the cryptocurrency trading volume list for a long time. Cryptocurrency payment is not necessarily a false proposition, but it will definitely not happen to Bitcoin.
[1]:https://stripe.com/blog/ending-bitcoin-support
[2]:https://home.treasury.gov/system/files/126/20210218_bp.pdf
[3]:https://www.tesla.com/assets/pdf/btc_terms_and_conditions_en_US.pdf
