Elon Musk Expresses Curiosity About Bitcoin Transactions, Plugs Dogecoin

Elon Musk expressed curiosity about large transactions in Bitcoin after a cryptocurrency industry insider suggested that he convert Tesla’s balance sheet into Bitcoin. Microstrategy CEO Michael Saylor suggested to Musk that he would be doing Tesla shareholders a “$100 billion favor” by doing so in a Twitter exchange between him and Musk.

“Other firms on the S&P 500 would follow your lead and in time it would grow to become a $1 trillion favor,” Saylor said in a tweet, referencing Tesla’s recent inclusion in the S&P 500 stock index.

The first and dominant cryptocurrency, Bitcoin, recently reached an all-time high of $24,000 per bitcoin. Saylor recommended it for large transactions, saying that he has purchased $1.3 billion worth of bitcoin.

Bitcoin has, however, been recently criticized for being unsuitable for small transactions due to high transaction fees. Musk has been one of the voices that criticized Bitcoin, especially after his followers became the victims of a scam that involved the hacking of his Twitter account and numerous fake accounts. As recently as Sunday, he dismissed Bitcoin as nearly useless.

This has caused several cryptocurrency insiders to jump over to alternative cryptocurrencies, or “altcoins”, that could process transactions in larger batches called “blocks” with faster processing times. Cryptocurrencies still has a long way to go before they can seriously compete with credit card companies like Visa and MasterCard on transaction throughput, but a few altcoins can process most of their transactions in less than a minute with fees per transaction amounting to less than half a cent.

Bitcoin Cash, for instance, has been added to BitPay, likely due to the influence of venture capitalist Roger Ver, a big name in the cryptocurrency world who owns a stake in the company. It should be noted, however, that Bitcoin Cash is incompatible with Bitcoin. Units of Bitcoin Cash sent to a Bitcoin address will never arrive at its intended destination.

Elon Musk himself has joked around with Dogecoin community members, even becoming the “CEO of Dogecoin” for a day — something that seems to have recently returned to his Twitter profile. He seems to recognize that Dogecoin is a more fun-oriented cryptocurrency, even sending its value soaring by 20 percent by tweeting, “One word: Doge.” Besides being inspired by the popular Doge meme, Dogecoin is especially known for its support for sports, including sponsoring a racecar, raising money for Indian Olympians, and sending a Jamaican bobsled team to the Olympics.

Bitcoin insiders who want a more modest Tesla instead of their often wished-for Lamborghini vehicles may keep their fingers crossed that Musk will eventually accept cryptocurrency as payment. If he does, he may be wise to “hodl” — a cryptocurrency slang term that has been said to stand for “hold on for dear life” by observers who have seen that Bitcoin’s value is even more volatile than Tesla stock. However, considering Musk’s recent criticism of Bitcoin, it may be unlikely that he will put enough money into the cryptocurrency to get a $100 billion payoff for Tesla’s stockholders.