You can now buy a Tesla car with cryptocurrency Bitcoin, according to CEO Elon Musk.
Tesla is the first major car company to accept the digital currency, after company chief Musk expressed public support for the currency multiple times.
In February, Tesla bough £1.1 billion worth of Bitcoin, which saw Bitcoin’s price shoot to a record high. Musk’s unexpected announcement in a tweet today will likely have an effect on the price of Bitcoin, which rapidly fluctuates from day to day.
In the tweet, Musk added that Tesla would be using its own internal software to accept the Bitcoin payments and ‘operate Bitcoin nodes directly’.
In further support for the currency, Musk said that the received Bitcoin would be kept as Bitcoin, and not converted into a currency associated with any single country.
While the move has only announced for the US for now, where buyers can secure a Tesla car with a $100 dollar equivalent in Bitcoin, the move will soon be rolled out to other countries in coming months, according to Musk.
Musk has been the poster boy for cryptocurrencies and, through Twitter, has been heavily backing bitcoin and the joke cryptocurrency dogecoin.
What is Bitcoin?
Bitcoin is a type of cryptocurrency, which is a virtual or digital currency – like an online version of cash.
It works without a central bank and is usually exchanged from person-to-person when it is sold or exchanged, without anyone working in-between to overlook the transaction.
Some people like the fact that Bitcoin is not controlled by the government or banks. It was first released in 2009 and its value has fluctuated over the last 12 years.
People can track their ownership of Bitcoin by using a cryptocurrency wallet, which is a digital way to exchange payments.
It is easy to track as details are stored in a ledger called blockchain, which is publicly accessible and it includes all confirmed transactions.
Why is Bitcoin surging in value?
When the global stock market wildly fluctuates in value it is said to be volatile.
For investors looking for a safe, reliable store of their money, this is not ideal – instead they look for more stable investments, like gold or government-backed bonds.
But recently, some investors have expanded their definition of a ‘safe haven’ to include cryptocurrencies, as they see them sheltered from stock market volatility.
The limited supply of bitcoin, which has an upper limit of 21 million (18.5 million bitcoin have already been ‘mined’), is attractive to some investors.
This scarcity, which the cryptocurrency shares with another ‘safe haven’ investment, gold, is said to protect from the inflationary dangers other investments are vulnerable to.
It also helps when the most valuable carmaker in the world demonstrates a gigantic show of support by investing heavily in it too.
