Elon Musk Calls Bitcoin a "Fundamental" and "Physics-Based" Currency

Elon Musk said, "In a future where anyone can have anything, I don't think you need money as a database for labor allocation anymore."

Written by: Micah Zimmerman

Translated by: AididiaoJP, Foresight News

Elon Musk, CEO of Tesla and SpaceX, has once again sparked discussion about bitcoin, describing it as an energy-based, "fundamental currency based on physics."

In a recent podcast conversation with Nikhil Kamath, Musk emphasized that bitcoin's value is closely tied to real-world energy consumption, highlighting the differences between digital assets and traditional fiat currencies.

"Energy is the real currency," Musk said. "That's why I say bitcoin is energy-based. You can't get energy through legislation. You can't just have a law and suddenly have a lot of energy."

The Tesla founder drew attention to the difficulty of producing and utilizing energy, linking it to bitcoin's "proof-of-work" system, which requires significant computational power and electricity to secure the network.

He also mentioned the Kardashev Scale, a method of measuring a civilization's level of energy consumption, as a perspective for understanding societal progress. He believes that evaluating a civilization's development by its ability to generate and manage energy aligns with bitcoin's design principles, where value is supported by scarcity and computational input.

Looking further into the future, Musk suggested that advances in artificial intelligence and robotics could render money unnecessary.

"In a future where anyone can have anything, I don't think you need money as a database for labor allocation anymore," he said, referencing Iain M. Banks' "Culture" series of novels depicting a post-scarcity era, viewing it as a blueprint: in that society, superintelligent machines manage resources without a monetary system.

Musk: You Can't "Print" Energy

Musk also highlighted bitcoin's unique properties. Unlike fiat currencies that governments can print at will, bitcoin's "proof-of-work" system ties its creation process to energy and computational power, giving it inherent scarcity and making it relatively independent from political influence.

"Governments can print money, but they can't print energy," Musk said.

Although Musk envisions a future where energy could become a more fundamental measure of value, he acknowledges that traditional currencies still dominate today's world.

National currencies continue to dominate commerce, wages, and savings, while cryptocurrencies like bitcoin currently exist mainly as alternative assets rather than substitutes for everyday transactions.

Musk's remarks once again remind people of the philosophical foundation behind bitcoin, which is closely related to physics and energy, rather than relying on policy and government control.

Earlier today, the price of bitcoin plunged 8% in early Monday trading to the mid-$84,000 level, extending a two-month decline. Since hitting an all-time high in October, its value has dropped by more than 30%.

This drop occurred after bitcoin's price briefly rebounded above $92,500 last week. Previously, in November, its price had fallen to a low near $81,000.