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Elon Musk puts Twitter poll to check if Tesla should accept Dogecoin and this is what it means for you

Elon Musk recently tweeted a Twitter poll asking followers if they would like Tesla to accept Dogecoin payments. More than 78 per cent have since responded Yes.

twitter-logoSarthak Dogra | May 12, 2021 | Updated 13:48 IST
Elon Musk (Image for representation: Reuters)

Highlights

  • Dogecoin is a meme cryptocurrency that is in the spotlight lately.
  • It was recently accepted by SpaceX as the payment for a lunar mission next year.
  • Musk has now hinted at its use by his other firm Tesla.

Dogecoin has been in the spotlight lately, largely thanks to Elon Musk and his owned enterprises. Days after the tech billionaire's aerospace firm SpaceX announced the use of Dogecoin to pay for a lunar satellite, Musk has now hinted at its potential use of buying a Tesla.

Taking to Twitter, Musk asked his followers if they would like to pay for a Tesla with Dogecoins. For those unaware, Dogecoin is a cryptocurrency that originated as a meme or a joke for the seriousness of the cryptocurrency industry. Based on a Japanese dog breed named Shiba Inu, it was created to build a vibrant community in the cryptocurrency world.

Elon Musk is a long time admirer of Dogecoin and has established himself as a very important part of this community. On Tuesday, Musk tweeted, "Do you want Tesla to accept Doge?" in the form of a Twitter poll.

Among the Yes or No options, more than 78 per cent of respondents have recorded Yes as the answer. If the Tesla CEO follows the public verdict and the example of his other firm's recent Dogecoin investment, there is a chance that you might just be able to buy a Tesla with Dogecoin soon.

What does this mean?

Dogecoin has been on a rollercoaster in the markets for the past month. It experienced hype with the announcement of Elon Musk's Saturday Night Live appearance on May 8. Musk had let his Twitter followers know that he would mention the cryptocurrency at the show. He did, but it did not have the effect many around the globe were expecting.

From reaching record heights in anticipation, the crypto crashed in the markets, making many lose their money right at the time of Musk's SNL performance. Not that Musk didn't do his part. He called the cryptocurrency a "hustle" and a "stimulus for people kicked by pandemic."

Dogecoin lost more than 30 per cent of its value within hours. Since then, it has seen short spikes, one majorly due to the SpaceX announcement a couple of days back. One of the top aerospace manufacturers in the world announced that it would send DOGE-1, a lunar satellite named after Dogecoin, to the moon in the first quarter of next year. The company has taken Dogecoin as payment for the mission.

With the possibility of Tesla following this lead, what exactly does it mean for you? If Tesla says it will accept payments in Dogecoin, you will have to transfer the number of Dogecoins equivalent to the price of the car, as per the market value of the cryptocurrency at that time.

The operational sense of it can be guessed with Tesla's current acceptance of Bitcoins for Tesla. The US electric vehicle firm allows buyers to directly transfer Bitcoin from their crypto wallets to Tesla's account. The amount of Bitcoin depends on its current market value, and hence a transaction should be executed within a short time period.

We can expect the same with Dogecoin, that is if Tesla ultimately allows Dogecoin payments. The cryptocurrency, however, has a negligible market value in comparison to others like Bitcoin. Hence, it might be a hefty amount of Dogecoin one has to pay for Tesla.

Of course, that will depend on the crypto's prevailing performance in the market. It is bound to rise multifold in value if Tesla gives the green light to Dogecoin payments. So if you have a Dogecoin today and it doubles by the time such payments are accepted, you will effectively be buying a Tesla at half its price. Though don't consider it as financial advice, just a mere observation.

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