<p>Cutting the middlemen: No bankers, no SWIFT, no account fees, no manual approval, easy intercontinental transactions.</p>
<p>And Musk likes (sometimes too much) to take risk. Perhaps, it's because he believes that the BTC they store would increase in value in the long term.</p>
<p>If everyone adopted SegWit addresses, especially Bech32, then the tx rate is higher than 7 TPS, although TPS may not matter since larger transactions are forced to weigh equally as smaller transactions.</p>

CC BY-SA 4.0
2021-02-08T13:59:16.723Z
2021-02-08T13:59:16.723Z
MCCCS
<p>Sending a Bitcoin payment incurs a fee relative to the weight of the transaction. Every transaction must have at least one input and one output. Assuming a minimal transaction weight for either, it costs the same to send 1 mBTC or 100 BTC.</p>
<p>The <a href="https://bitcoin.stackexchange.com/a/84006/5406">cost</a> per transaction <a href="https://bitcoin.stackexchange.com/a/53626/5406">weight</a> is one reason why on-chain transactions are ill-suited for micropayments, but it also means that larger payments can come at a significantly lower relative cost than other payment forms.</p>
<p>A new Tesla 3 costs about 0.9 BTC today. At a feerate of 150 sats/vB (next block confirmation even at high demand) and a transaction weighing 250 vB, the transaction fee of 37,500 sats (0.375 mBTC) translates to a relative fee of 0.0417%. I believe that you will find many other payment forms to incur a larger fee, especially for the merchant.</p>
<p>On the other hand, payments on the Lightning Network incur a cost <a href="https://bitcoin.stackexchange.com/q/48283/5406">relative to the paid amount</a>, so I expect smaller payments to shift to Lightning Network and similar solutions more and more.</p>

CC BY-SA 4.0
2021-02-08T23:26:35.430Z
What does "weight of transaction" mean? I'm not sure I understand how it's any different than the actual "paid amount"
nz_21
CC BY-SA 4.0
2021-02-08T23:29:19.743Z
Ok, I've just googled. It's the number of blocks needed to capture the transaction. Not sure I understand how this could be the same for 1 million btc and 100 btc though
nz_21
CC BY-SA 4.0
2021-02-09T00:06:32.023Z
The weight of a transaction corresponds to the length of its witness data and the byte length of its serialized form. More inputs or outputs increase a transaction's weight. Bitcoin blocks are limited to 4,000,000 weight units. I've added a couple links to corresponding topics to better explain.
Murch
CC BY-SA 4.0
2021-02-09T00:18:41.090Z
Great answer. It seems like the fee structure essentially incentivizes large tx's, so it solves the scalability issue on a monetary level. However, I'm not sure how it addresses the issue on a physical level -- specifically one where there are *many* large tx's happening at a global scale. Does the network have the kind of bandwidth to handle the volume?
nz_21
CC BY-SA 4.0
2021-02-09T00:21:50.280Z
Did you mean "high value" with large?—I'd say my main point is that there are generally fewer high-value payments, and high value payments will remain competitive longer per the fee structure. On the other hand, there is a viable escape valve for low value payments.
Murch
CC BY-SA 4.0
2021-02-09T00:24:15.843Z
Yep, I meant large monetary transactions. If tesla adopts it, I'd imagine its competitors/partners might potentially too; this would be mean there are many high value payments happening on a global level. Was just curious if the network had the capability to handle this volume.
nz_21
CC BY-SA 4.0
2021-02-09T00:26:13.770Z
"Large" is a bit ambiguous in this context, because "large" first makes me think of "transaction size" (the predecessor of transaction weight). This is why I distinguish between "bigger weight" and "higher value". :)
Murch
CC BY-SA 4.0
2021-02-09T00:26:22.977Z
Let us [continue this discussion in chat](https://chat.stackexchange.com/rooms/119518/discussion-between-murch-and-nz-21).
Murch
CC BY-SA 4.0
2021-02-08T17:38:39.043Z
2021-02-09T00:23:24.180Z
2021-02-09T00:23:24.180Z
Murch
<p>Tesla has said they <a href="https://www.bloomberg.com/news/articles/2021-02-08/tesla-bets-1-5-billion-on-bitcoin-in-new-policy-crypto-surges" rel="nofollow noreferrer">&quot;expect to begin accepting Bitcoin as a form of payment for our products in the near future.&quot;</a></p>
<p>But Bitcoin doesn't scale. It achieves about roughly <a href="https://www.blockchain.com/charts/transactions-per-second" rel="nofollow noreferrer"><em>6</em> transactions</a> per second, paling in comparison to the likes of Visa, which facilitates around <em>1,700</em> transactions per second.</p>
<p>What's the rationale behind their decision?</p>

CC BY-SA 4.0
2021-02-08T13:54:59.010Z
Have you heard of the Lightning network?
Jivan Pal
CC BY-SA 4.0
2021-02-08T13:55:29.760Z
@JivanPal They could accept LN only.
MCCCS
CC BY-SA 4.0
2021-02-08T13:57:28.423Z
@MCCS, sorry, not sure what point you're trying to make; OP seems to not be aware that LN exists if they're focusing on the fact that the BTC blockchain is capped at 6 tx/s.
Jivan Pal
CC BY-SA 4.0
2021-02-08T14:00:10.190Z
Oh ok I interpreted it differently. I "autocorrect" the question to why a business would accept BTC directly.
MCCCS
<payment><scalability>
Rationale behind accepting btc as a mode of payment?
nz_21
# Rationale behind accepting btc as a mode of payment?

(Asked by: username_0 on 2021-02-08)

Tesla has said they ["expect to begin accepting Bitcoin as a form of payment for our products in the near future."](https://www.bloomberg.com/news/articles/2021-02-08/tesla-bets-1-5-billion-on-bitcoin-in-new-policy-crypto-surges)

But Bitcoin doesn't scale. It achieves about roughly [*6* transactions](https://www.blockchain.com/charts/transactions-per-second) per second, paling in comparison to the likes of Visa, which facilitates around *1,700* transactions per second.

What's the rationale behind their decision?

**Tags:** payment, scalability

> **Comments:**
> **username_1**: Have you heard of the Lightning network?  
> **username_2**: @username_1 They could accept LN only.  
> **username_1**: @MCCS, sorry, not sure what point you're trying to make; OP seems to not be aware that LN exists if they're focusing on the fact that the BTC blockchain is capped at 6 tx/s.  
> **username_2**: Oh ok I interpreted it differently. I "autocorrect" the question to why a business would accept BTC directly.  

---

## 2 answers

### Answer by username_3 on 2021-02-08. Score: 3 | Accepted answer

Sending a Bitcoin payment incurs a fee relative to the weight of the transaction. Every transaction must have at least one input and one output. Assuming a minimal transaction weight for either, it costs the same to send 1 mBTC or 100 BTC.

The [cost](https://bitcoin.stackexchange.com/a/84006/5406) per transaction [weight](https://bitcoin.stackexchange.com/a/53626/5406) is one reason why on-chain transactions are ill-suited for micropayments, but it also means that larger payments can come at a significantly lower relative cost than other payment forms.

A new Tesla 3 costs about 0.9 BTC today. At a feerate of 150 sats/vB (next block confirmation even at high demand) and a transaction weighing 250 vB, the transaction fee of 37,500 sats (0.375 mBTC) translates to a relative fee of 0.0417%. I believe that you will find many other payment forms to incur a larger fee, especially for the merchant.

On the other hand, payments on the Lightning Network incur a cost [relative to the paid amount](https://bitcoin.stackexchange.com/q/48283/5406), so I expect smaller payments to shift to Lightning Network and similar solutions more and more.

> **Comments:**
> **username_0**: What does "weight of transaction" mean? I'm not sure I understand how it's any different than the actual "paid amount"  
> **username_0**: Ok, I've just googled. It's the number of blocks needed to capture the transaction. Not sure I understand how this could be the same for 1 million btc and 100 btc though  
> **username_3**: The weight of a transaction corresponds to the length of its witness data and the byte length of its serialized form. More inputs or outputs increase a transaction's weight. Bitcoin blocks are limited to 4,000,000 weight units. I've added a couple links to corresponding topics to better explain.  
> **username_0**: Great answer. It seems like the fee structure essentially incentivizes large tx's, so it solves the scalability issue on a monetary level. However, I'm not sure how it addresses the issue on a physical level -- specifically one where there are *many* large tx's happening at a global scale. Does the network have the kind of bandwidth to handle the volume?  
> **username_3**: Did you mean "high value" with large?—I'd say my main point is that there are generally fewer high-value payments, and high value payments will remain competitive longer per the fee structure. On the other hand, there is a viable escape valve for low value payments.  
> **username_0**: Yep, I meant large monetary transactions. If tesla adopts it, I'd imagine its competitors/partners might potentially too; this would be mean there are many high value payments happening on a global level. Was just curious if the network had the capability to handle this volume.  
> **username_3**: "Large" is a bit ambiguous in this context, because "large" first makes me think of "transaction size" (the predecessor of transaction weight). This is why I distinguish between "bigger weight" and "higher value". :)  
> **username_3**: Let us [continue this discussion in chat](https://chat.stackexchange.com/rooms/119518/discussion-between-username_3-and-username_0).  

---

### Answer by username_2 on 2021-02-08. Score: 0

Cutting the middlemen: No bankers, no SWIFT, no account fees, no manual approval, easy intercontinental transactions.

And Musk likes (sometimes too much) to take risk. Perhaps, it's because he believes that the BTC they store would increase in value in the long term.

If everyone adopted SegWit addresses, especially Bech32, then the tx rate is higher than 7 TPS, although TPS may not matter since larger transactions are forced to weigh equally as smaller transactions.


---

