Elon Musk Is Learning A Different Perspective of Bitcoin
Elon Musk who is the CEO of Tesla has been proactive about Bitcoin in his recent tweet. The situation initiated when Ben Mezrich, Bitcoin Billionaires author stated that he would never turn down being paid in Bitcoin. When Ben made such a statement, Musk agreed to it, and the discussion went on to be more interesting.
Musk’s tweet was responded to by many of them and Parallax Digital CEO Robert Breedlove’s comment was eye-catching. He wrote saying that,
“Money is simply a tool for moving value across spacetime. Gold was great for moving value across time, but not space. Fiat currency is great for moving value across space, but not time. Bitcoin is optimized for moving value across both space and time.”
To this statement Musk disagreed saying that,
“The thing we call money is just an information system for labor allocation. What actually matters is making goods & providing services. We should look at currencies from an information theory standpoint. Whichever has the least error & latency will win.”
Musk held this position for quite a long time. In January 2020, on the Third Row Tesla Podcast, Musk explained that Bitcoin was used for illegal payments on the Dark Web, but it wouldn’t become the main currency of the future. He stated that,
“Where I see crypto as is effectively a replacement for cash. But not as a replacement for a primary—I do not see crypto being the primary database”.
A Payment Mechanism or A Store of Value?
Even today, the debate on the payments/store of value is still continuing. It is whether Bitcoin should be used for everyday payments for buying coffee or whether it’s a hedge against inflation. Favorably it is referred to as digital gold. Last month, Dan Held, Head of Kraken Exchange elaborated on what it means to call Bitcoin a Digital Gold. He stated,
“I don’t need to store my coffee transaction in an immutable ledger. I don’t give a shit if they try to censor my coffee transaction. Go ahead, it’s fine, I’ll figure out another way.”
Another commentator, Cerberus told Musk on the Twitter thread that
“Granted; it has latency and transaction costs. But if used as a store of value and transmission of large values, it is massively efficient. Currencies already work as currencies; Bitcoin need not replace them. Rather, $btc is a patch to fix reserve banks’ inflationary insanity.”
To which Musk responded as “Good point”.
