Electric car maker Tesla, Inc. (TSLA) has started accepting the Dogecoin (DOGE) cryptocurrency for certain merchandise on its website. Company CEO Elon Musk made the announcement on Twitter early Friday, January 14. after teasing the possibility towards the end of 2021. In response, the price of the coin jumped nearly 9% to $0.20.
Key points to remember
- Tesla has started accepting Dogecoin for the purchase of certain items on its website.
- Purchases come with several conditions.
- This is the second time Tesla has allowed purchases using cryptocurrencies on its site.
Dogecoin was originally launched as a “prank” cryptocurrency. But its value skyrocketed after enthusiasts hiked its price. Among those enthusiasts is Elon Musk, who has tweeted about cryptocurrency several times over the years. He tweeted in December that Dogecoin encouraged people to spend their cryptocurrency rather than hoard it. Musk would also help the coin’s developers improve the efficiency of its transactions.
Large purchases on the Tesla site, such as the company’s electric vehicles, still require cash, but accessories can be purchased with Dogecoin. For example, a Giga Texas belt buckle sells for 813 DOGE, or about $154 at current cryptocurrency prices. A Cybertruck-shaped Cyberwhistle was worth 300 DOGE, or $57. And a Cyberquad for kids was worth 12,020 DOGE, or $2,284.
Tesla’s Dogecoin foray comes with several strings attached. Purchases made using cryptocurrency must be completed within a certain time frame displayed by a timer. If a payment is not made within the specified time, it will have to be started over. The company noted on its site that it can take up to six hours to confirm payment on the Dogecoin network on its site.
Purchases made using cryptocurrency also cannot be exchanged or refunded. The company also made the buyer responsible for ensuring that the Dogecoin transfer between the buyer’s and Tesla’s wallets goes smoothly. This means that a transfer to the wrong address by the buyer can cause them to lose their coins. The company will also not refund any overpayments made in Dogecoin.
While they make sense in the volatile world of crypto markets, the conditions also demonstrate why cryptocurrencies have failed to take off as a retail payment mechanism. Bitcoin (BTC) was originally conceptualized as a payment network, but a very small percentage of transactions on its network are related to retail.