Tesla buys $1.5B in Bitcoin, will accept as payment soonABC News
Tesla to accept bitcoin as payment in ‘near future’ after $1.5 billion investmentThe Verge
Bitcoin soars to all-time high as Musk’s Tesla says it bought $1.5 billionCBS
With all the buzz being generated around the move by Elon Musk’s Tesla to invest $1.5 Billion USD into the crypto currency, you would be forgiven if you were blinded by the eye watering dollar figure enough to miss the real news. Tesla will begin accepting Bitcoin as payment for their vehicles.
What was once a pipedream by a bunch of nerds running their GPU’s ragged ‘mining’ a little known digital currency named Bitcoin, is now a full-fledged currency the likes of which rival the all powerful Fiat.
The acceptance of cryptocurrency into mainstream society was the original intention of Bitcoin – and this move by Elon Musk has proven that crypto is well and truly on its way there.
Although I can see that Bitcoin will continue to break records as more and more people sit up and take notice of the cryptocurrency as a value storage, it’s practical usage as a currency is not promising.
Not to bore you too much with the technical details – but in order for a Bitcoin transaction to be completed a number of criteria have to be met:
- Both parties have a Bitcoin wallet address
- Bitcoin(s) or Satoshi (fractions of a Bitcoin) have been transferred from one wallet to another.
- The transaction has been confirmed through the Bitcoin mining process
It is point number 3 where the front-of-house-of-cards falls over. Confirming a transaction is done through the ‘mining’ process, this process involves a ‘solving’ a complex algorithm (this extension maths level Algebra x like a million) which gets exponentially more and more difficult to solve.
‘Mining’ is conducted by individuals or companies who have setup ‘mining rigs’ (typically a whole bunch of Graphics Cards linked together and running at maximum around the clock solving this really hard algebra) and for solving the algorithm, a miner is paid in Bitcoin.
This entire process, though decentralised by design, takes hours of time and has an associated transaction fee (which varies day to day depending on how many transactions require confirmation).
This makes Bitcoins chances of acceptance as a ‘digital cash’ rather pointless. These limitations are hard coded into Bitcoin, and although Bitcoin does have it’s place as the original crypto and an excellent value store… it is up to other cryptocurrencies to bridge this gap.
I discovered Nano during the crypto boom in 2016, it was known as XRB then. I was on the hunt for the biggest market disruptor that cryptocurrency had to offer and after going through countless white-papers and sorting the wheat from the shills, I came across this little currency.
The marketing was simple: Fee Free. Instant Transactions.
They had my attention. I read the white-paper and joined the relevant communities and began gathering information about how Nano functions, how it allows for Free and Instant Transactions. Again… without delving too deep into the technical details, the creator of Nano invented a new type of blockchain (the technology used to power Bitcoin, and almost all other cryptocurrencies) he titled block-lattice.
The largest breakthrough with block-lattice technology was the lack of ‘mining’. Transactions are confirmed by the sending, and receiving parties, through a process called ‘Proof-of-Work’ which is completed on the end-users devices and Open Representative Voting, which is completed by a node.
Are you still with me? No. Okay… long story short, they were right. Free and Instant (well near instant… I transferred some a week ago it took about 2 seconds which is well within the margin of error for internet lag).
If you want to read more about Nano here is a great breakdown by the Nano Foundation: https://docs.nano.org/what-is-nano/overview/
What Tesla has done is absolutely ground-breaking and has lent credence to the concept of cryptocurrency becoming a far greater financial influence in our day-to-day lives.
For me though… it’s confirmation bias that as we dive deeper and deeper into technology being the foundation of our future, we also swim farther and farther away from centralisation, big-tech and the ever slowly encroaching ‘big-brother’.