Tesla has a rather complex history with cryptocurrencies, but Dogecoin is the coin that will always remain come up when discussing the company and its CEO, Elon Musk.
So, as a Tesla filing re-opens the possibility of the company accepting cryptocurrency, there may be a chance Doge is among them.
Will Tesla Accept Dogecoin As Payment?
Paying close attention to the wording of the SEC filing, there is still a chance Tesla could start accepting Dogecoin.
In its latest quarterly report filed to the SEC, Tesla included a section updating the SEC on its digital assets. After referencing its purchase of $1.5bn in Bitcoin, Tesla said:
During the three months ended March 31, 2021, we accepted bitcoin as a payment for sales of certain of our products in specified regions, subject to applicable laws, and suspended this practice in May 2021. We may in the future restart the practice of transacting in cryptocurrencies ("digital assets") for our products and services.
What is important to note here is the specific terminology used. When touting a future restart, Tesla does not use the term ‘Bitcoin’, instead preferring ‘cryptocurrencies’, or digital assets. Aside from the plural nature of the term ‘cryptocurrencies’, Tesla’s choice not to write “transacting in Bitcoin” suggests the company is open to exploring other cryptocurrencies as payment.
Indeed, the Tesla website also updated last month to include a reference to 'SHIBA', which could hint at further Dogecoin implementation.
So, of the 12,000 cryptocurrencies currently in existence, why would Tesla choose Dogecoin?
Well, there’s only really three that could likely be accepted: Bitcoin, Ethereum, and Dogecoin. These are the three cryptocurrencies that Elon Musk claims to hold.
Of the three, much of Musk’s attention on Twitter goes towards Dogecoin. The Dogefather engages in discussions about the future of Dogecoin’s development, shares memes, and even owns a Shiba Inu puppy. A Twitter poll he released asking if Tesla should accept Dogecoin garnered nearly 4 million votes, with 78.2% in favour.
Musk has also been vocal about the improvements Dogecoin needs. “What matters [in my opinion] is lowering fees, decreasing block time and increasing block size,” he tweeted on October 24. “A single layer network with exchanges as de facto layer 2 seems like the simplest solution for a medium of exchange.”
Perhaps these issues would need to be addressed before Tesla could accept Dogecoin.
However, social media is not reality. For real-world use, cryptocurrency needs larger, institutional backing. Here, Doge is better than most as the likes of AMC, and even Musk’s own Space-X are toying with Dogecoin-related payments. It remains far off the level of support garnered by Bitcoin, however.
Bitcoin is still most likely the first cryptocurrency Tesla will accept. When the company first ended its Bitcoin support, Elon Musk cited the environmental impact of mining. However, Musk has clarified that Tesla may accept Bitcoin again if its renewable energy usage goes above 50%. Estimates on Bitcoin’s renewable energy proportion range from 20 to 70%, according to the Cambridge Bitcoin Electricity Consumption Index.
While Dogecoin’s environmental impact is significantly less than Bitcoin’s, it does still use a variant of proof-of-work that could still consume a hefty amount of non-renewable energy. Perhaps, as Vitalik Buterin recommended, Dogecoin should consider a switch to proof-of-stake.