Elon Musk Elaborates on Cryptocurrency Position
After several years of making mysterious comments about cryptocurrencies and his position on them, Elon Musk has come out with some clearer statements.
As a guest on the Third Row Tesla podcast, Elon said that he was “neither here nor there for Bitcoin” and later said that he didn’t think the Bitcoin community would be happy with some of his thoughts on the matter. This is mostly because of his belief that cryptocurrency can too easily be used for facilitating illegal transactions:
“You must have a legal to illegal bridge. So where I see crypto is effectively as a replacement for cash. I do not see crypto being the primary database [for transactions].”
He’s not outright saying cryptocurrency is bad, but that it can be used for these things in the same way cash can, and in that way, it isn’t really a solid improvement on cash.
Unclear Until Now
Just in the past few months, Musk has tweeted several times about cryptocurrency (or at least alluding to it). It started when he tweeted “Bitcoin is *not* my safe word” and shortly thereafter followed with “Cryptocurrency is my safe word.”
Musk is known for his inside jokes and desire to entertain himself, so not everything here needs to be taken at face value. However, his comments since then are much more comprehensive.
Note how Musk’s history is actually very related to the original vision behind Bitcoin. He founded a company called X.com that later joined Paypal because of their shared visions. The goal of this company was to replace the current payment system in the U.S. (and eventually the world), which would also have meant issuing a better currency. Musk says on the podcast:
“If PayPal had executed the plan that I wanted to execute on, I think it would probably be the most valuable company in the world.”
At some point in the development of the company, it was deemed infeasible to focus on the minting of a new currency, and Paypal turned its focus to pure payments. However, this special tidbit should be kept in mind for those who think financial technology is outside his realm of expertise. He’s actually been thinking about these problems for a long time.
It is interesting to note how Musk brings up that his comments may offend some people. He is always very aware of the way people react to his thoughts, and takes a while to elaborate on them. Bitcoin maximalists who only buy Bitcoin might appreciate that he sees the Satoshi white paper as “very clever” but not enjoy him emphasizing the illegal to legal bridge that transacting in Bitcoin creates.
Even though a celebrity’s opinion shouldn’t necessarily be considered breaking news, Musk is a technologist first and his read on the situation is something many potential adopters would read.