In the perfect marriage of two much-hyped technologies, an unidentified Orlando, Fla., man has used digital currency bitcoins to buy a Tesla Model S electric car, according to the seller, Lamborghini Newport Beach.
General sales manager Nick Jones says his boss was confounded when he explained how the buyer wanted to pay. After Jones explained the process of transacting with digital cash, similar to wiring U.S. dollars, the shock and confusion went away.
"It's just another method to sell cars," said Jones, who handled the deal for the dealership, which despite its name is in Costa Mesa. "He's happy."
Bitcoins are an alternative form of currency that can be exchanged -- and converted to dollars -- in open, online markets. They're popular with people who distrust central banks, as bitcoin is not backed by the federal government. Its supply grows at a controlled pace as "miners" earn new bitcoins for completing programming tasks.
Bitcoin are accepted by a small but growing number of merchants selling everything from gift cards to watches. Its value as an everyday currency is limited somewhat by its extreme volatility.
The value of a bitcoin has skyrocketed in recent weeks after a Justice Department official said in a congressional hearing that it was a "legal means of exchange." Bitcoins traded at a high of $1,118 on Friday. A year ago, one bitcoin traded for $14.
The Tesla deal unfolded when Jones received a phone call Monday from a man in Orlando seeking to buy a Tesla with specific design features. When they realized there was a match, the potential buyer asked if the dealership accepted bitcoin.
At that point, the dealership didn't. But by Tuesday, a bitcoin account was set up and the deal closed mid-week, Jones said.
Bitcoins are transferred digitally between "wallets" that can be stored on computers or smartphones. In this case, the car dealership sent the buyer a digital invoice with a code requesting payment, about $103,000. The buyer then sent enough bitcoins to cover the cost (the dealership won't say how many).
The currency was then authenticated, converted to U.S. dollars, then wired to the dealership's account.
The car, a 2012 Tesla with tan interior and a glass roof, is set to ship later this week, Jones said.
The buyer, who is in the e-commerce business, wishes to remain anonymous.
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Original headline: Bitcoin used to buy electric Tesla in O.C.
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