Electric carmaker Tesla, Inc. (TSLA) has begun accepting the Dogecoin (DOGE) cryptocurrency for certain merchandise on its website. The company's CEO Elon Musk made the announcement on Twitter early Friday, Jan. 14, after teasing the possibility toward the end of 2021. In response, the coin's price surged by almost 9% to $0.20.
- Tesla has begun to accept Dogecoin for the purchase of some items on its website.
- The purchases come with several conditions.
- This is the second time that Tesla is allowing purchases using cryptocurrencies on its site.
Dogecoin was originally launched as a "joke" cryptocurrency. But its value skyrocketed after enthusiasts pumped up its price. Among those enthusiasts is Elon Musk, who has tweeted numerous times about the cryptocurrency over the years. He tweeted in December that Dogecoin encourages people to spend their cryptocurrency rather than hoard it. Musk is also reported to be helping developers of the coin improve efficiency of its transactions.
Big-ticket purchases on the Tesla site, like the company's electric vehicles, still require cash, but accessories can be purchased using Dogecoin. For example, a Giga Texas Belt Buckle sells for 813 DOGE, or roughly $154 at the cryptocurrency's current prices. A Cyberwhistle shaped like a Cybertruck 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 conditions attached. Purchases made using the cryptocurrency must be concluded within a certain period displayed by a timer. If a payment is not completed within the specified time period, it will need to be restarted. 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 the cryptocurrency also cannot be exchanged or refunded. The company has also made it the responsibility of the purchaser to ensure that the Dogecoin transfer between the buyer's and Tesla's wallets occurs accurately. This means that a transfer to the wrong address by the purchaser may result in them losing their coins. The company also will not refund overpayments made in Dogecoin.
While they make sense in the volatile world of crypto markets, the conditions also demonstrate the reasons 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.