Bitcoin has been around for nearly a decade, along with numerous other well-established digital currencies. However, most people wonder, “Could they buy a car with virtual currency?” Indeed, it has become quite easy to buy a car using bitcoins or any of the various crypto-assets. In truth, this has always been the case, but for various reasons, most cryptocurrency owners and speculators prefer not to do anything.

What Are Cryptocurrencies?

In the cryptocurrency market, we currently have over 10,000 functioning coins and projects. Each of these projects represents a certain vision and different mechanisms of operation, but what are cryptocurrencies? Virtual money or digital currencies is of course an accurate name, while we cannot stop at this simplification.

All because of the sophisticated nature of cryptocurrencies. As I managed to mention, crypto is based on a distributed, or in other words, decentralized accounting system. What is the unusual specificity of this solution?

The Philosophy of Cryptocurrencies – You Are Your Bank

In the world of cryptocurrencies, there is no overarching authority – such as a central bank – that can stop or reverse transactions. Everyone is their own bank, which in addition to the independent and completely free transfer of funds means that the funds of each user are as safe as the user himself will take care of this safety.

Cryptocurrencies mostly use advanced encryption algorithms that prevent access to funds by unauthorized persons. The only circumstances that may contribute to the loss of virtual money is a gap in the security of the cryptocurrency, which allows the theft of funds (which happens very rarely, it is even a margin), and the second possibility – which is 99% of cases of loss of funds, that is the loss of access to the wallet combined with the publication of data to operate the wallet, or private key.

Open and Decentralized Accounting System

This is what blockchain, or Blockchain, is. Transactions stored on the chain are irreversible and anonymous – the block that contains information about transactions contains encrypted data, such as wallet addresses or the keys needed to conduct the transaction.

Each cryptocurrency’s blockchain has a unique specification. The blockchain of bitcoin, despite many similarities, is different from the blockchain technology used for Litecoin or Ethereum.

What Are the Differences?

The best example of the differences, are the creation times of new blocks, which has a significant impact on the speed of transactions. With Bitcoin, a block is created every 10 minutes, while with Litecoin this time is reduced to 2.5 minutes.

Blockchain technology does not have an overarching authority – we are back to the principle of being your own bank. Instead of one strong authority, which has the power to confirm or reject transactions, blockchain is based on independent nodes – Nodes, which deal with the confirmation of user transactions, thus preventing the problem of double spending, which means that the user cannot spend the same money twice.

Confirming transactions can be done on different consensus – the most common is PoW – or proof-of-work, but an increasingly popular solution, especially due to the low resource requirements, is PoS – or proof-of-stake.

The Birth of Bitcoin, The First Cryptocurrency

Satoshi Nakamoto published a white paper called Bitcoin: A Digital Peer-to-Peer Cash System. It described the functionality of the Bitcoin blockchain network. That day in Bitcoin history set the direction for what followed.

Four months later, Satoshi Nakamoto, whose identity is still a mystery, produced the first block of Bitcoin. In doing so, he effectively launched the blockchain technology. The first mined block is also known as a genesis block.

The first registered purchase of goods using bitcoins took place when Laszlo Hanech bought two pizzas for 10,000 BTC. This day is still known in the crypto community as Bitcoin Pizza Day. Ledger marked the occasion with a limited edition Ledger Nano S.

Tesla to Pioneer Acceptance of Car Payments in Bitcoin

Elon Musk – for some a visionary, for others a madman, was the first to announce the acceptance of payments for Tesla cars in Bitcoin cryptocurrency. Musk noticed the huge potential of this cryptocurrency, but also others – such as Ethereum or Dogecoin (which was originally supposed to be a joke with cryptocurrencies, and actually became a cryptocurrency in the full meaning of the word), thanks to which Bitcoin itself gained in value several hundred times within one day. Musk thus started the trend of accepting payments in cryptocurrency, and major car brands followed suit.

A Few Brands That Have Decided to Accept Bitcoin as A Form of Payment Include:

• Ferrari
• Maserati
• Volkswagen
• Audi
• BMW
• Mercedes
• Nissan
• Lexus
• Honda

As you can see, the adoption of Bitcoin as a means of payment has affected premium cars as well as those in the lower segments.

How Do Car Prices Rank in Bitcoin?

A lot here depends on the Bitcoin exchange rate itself. For example, a Volkswagen Golf model can cost 0.9 BTC, which is worth almost $56,000 as of the writing of this article. Other cars – more from the premium segment – can reach prices of 1.5 BTC and more, such as over 5 BTC for the latest Ferrari 488 GTB. We have no information on whether car manufacturers react to changes in the Bitcoin exchange rate and adjust their car price list, or whether they have their prices set “rigidly”.

Summary

The currency market has had to adjust to the rapidly changing situation, which in turn has translated into adjustments for other sectors of the economy, including the automotive sector. Over time, automakers will choose not only Bitcoin, but other cryptocurrencies that are growing in popularity. When buying a car with cryptocurrency, we can simultaneously treat it as a kind of investment that can bring additional profits when selling the car, or in the case of acquiring cryptocurrency to buy not only cars, but other tangible goods that can also bring both investment value for the future, as well as a monitor of trends both investment and other. We hope you found in our article what you were looking for!

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