Elon Musk describes how to solve the money problem; Is it crypto?
Elon Musk was a guest in Cathie Wood’s X Spaces on December 21 to “discuss the future.” Musk owns X (formerly Twitter), while Wood is the CEO and CIO of Ark Invest, an investment management firm interested in crypto.
Notably, the well-known multi-billionaire and CEO of Tesla Inc (NASDAQ: TSLA) showed a lack of interest in crypto when asked about Bitcoin (BTC), its potential impacts on the financial and monetary system, and Tesla’s holdings.
“Honestly, I have to say I don’t spend a lot of time thinking about cryptocurrencies. Hardly any at all.”
— Elon Musk (01:15:32)
Elon Musk on the nature of money: ‘Information moving on a network’
Nevertheless, Elon Musk continued by saying he has been thinking for a long time about the nature of money.
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“What is money? It is really a database for resource allocation. (…) Fiat currencies are actually fine as a database for resource allocation if you have a predictable money supply and it doesn’t get inflated or deflated too much.”
— Elon Musk (01:15:46)
Interestingly, he then proceeds to describe an ideal form of money to “solve the money problem.” On that, Musk applies the logic of “information moving on a network,” in his words.
“So when you think of any given money system, I sort of apply information theory to a money problem. So think of it like it’s an information system, and you want to minimize noise, minimize latency, minimize packet loss. And so any inflation would be adding noise to the system. If what it takes to conclude a transaction is a long time, that adds latency to the system. Fraud is kind of like packet loss. So I guess I kind of think of money like I think of information moving on a network. Bandwidth, latency, jitter, which is the variance in latency, packet loss. Those fundamental elements.”
— Elon Musk (01:16:57)
In summary, an ideal monetary system would conclude a transaction faster, with the lowest loss of resources possible. Also, ideally, with no inflation, as it would “add noise to the system.”
Curiously, Elon Musk had previously talked about the need for a “low-latency” monetary system: “Whichever has [the] least error & latency will win.”
In particular, Grok previously suggested the cryptocurrency Nano (XNO) as “a strong contender” to address these points — as reported by Finbold on December 9. It is important to note that other users might have different results from the same prompt.
However, Musk avoided discussing cryptocurrencies in the show and has not recommended any specific project. It is well-known that the multi-billionaire is a Dogecoin (DOGE) fan, whose support could have triggered past Dogecoin’s pumps.
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