Tesla CEO Elon Musk described Bitcoin’s structure as “quite brilliant” and said that digital currency is “a far better way to transfer value than pieces of paper.” Musk made these comments during an interview on advisory company ARK Invest’s podcast, which was released today.
When asked whether he thought Bitcoin would become the only currency native to the internet, Musk noted his appreciation for Bitcoin’s structure, but went on to say that “one of the downsides of crypto is that computationally it is quite energy intensive, so there have to be some kind of constraints on the creation of crypto. But it’s very energy intensive to create the incremental Bitcoin at this point.”
What Musk is referring to is the minting of new Bitcoin, which occurs to through the process of mining, which is the means by which Bitcoin transactions are verified. Miners use high-powered computers to solve complex math problems, which, when solved, verify the transaction on the blockchain. Bitcoin has been criticized by many for using too much energy.
Musk continued that “it would not be a good use of Tesla’s resources to get involved in crypto. We’re just really trying to accelerate the advance of sustainable energy.”
But that didn’t stop him from endorsing crypto as the currency of the future. Cryptocurrency, he later added, “bypasses currency controls … paper money is going away, and crypto is a far better way to transfer value than pieces of paper.”
Last year, Musk tweeted that he owns “literally zero cryptocurrency” except for 0.25 BTC that a friend had sent him years before.
Still, the ramifications of his general support for crypto are twofold. First, a thought leader in and indeed out of the tech space, his comments are sure to make crypto doubters think twice about their reservations, and potentially encourage them to be more open to the technology. Second, if a company as large and as recognizable as Tesla were to ever accept Bitcoin or another cryptocurrency, it would be a massive boon to the space, leading the way for other companies to follow suit.