Tesla Announces the New Model T
UPDATE 2021-04-05: Added some notes and caveats, thanks to a discussion with Russell Thomas
You may have already seen them on the road. The Model 3 has been largely successful, everybody and their mother knows these cars run on electricity, not directly making harmful carbon emmisions that pollute our planet and contribute to climate change.
- This article assumes that you when you buy a Tesla you are just now spending $50,000ish to get a new Bitcoin and spend that on the Tesla. In other words, it's an incremental Bitcoin. If you already owned that Bitcoin ahead of time, this article does not apply to you.
- We also assume that someone in China (most common), who uses coal for electricity (most common) created a new Bitcoin by mining and he sold it to you for the $50,000. He cashed out that money to pay his electricity which, as long as electricity costs $49,999.99, he should be happy to do.
- We also assume that nobody else is using the Bitcoin network at this exact second as you and the miner are making this transaction. Taxes are zero. Equipment rental is free. Employees work for free. Risk premium is zero. Interest rates are zero. Transaction costs are zero. Economists typically like to add those kinds of caveats.
- You can peel back these assumptions and get basically the same result—you are adding $50,000 worth of demand into the system, and the matching supply is created by businesspeople competing nearly at cost where their biggest expense is electricity.