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October 4, 2022
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Elon Musk is starting to understand real bitcoin

Tesla CEO Elon Musk has always judged Bitcoin by its performance as a currency. But now he is seeing it from a different perspective.

Tesla CEO Elon Musk has been particularly active on a specific topic in the Bitcoin tweet.

It all started when the author of Bitcoin Billionaires, Ben Mezrich, said that in the future, he would never refuse payment in Bitcoin – a sentiment Musk agreed with. But the discussion continued and became even more interesting.

Although Musk’s tweet received many responses, it was a comment from Parallax Digital CEO Robert Breedlove that caught his eye.

Breedlove, who loves Bitcoin, wrote:

“Money is simply a tool to move value across space and time. Gold was great for moving value in time, but not in space. Fiat currency is great for moving value in space, but not in time. Bitcoin is optimized to move value both in space and in time. “

And here, Musk disagreed:

“What we call money is just an information system for allocating labor. What really matters is making goods and providing services. We must look at coins from the point of view of information theory. The one with the least error and latency will win. “

Musk has held this position for some time. In January 2020, at the Third Row Tesla Podcast, he explained that Bitcoin was useful for illegal payments on the dark web, but that it would not become the main currency of the future.

Payment method or value reserve?

But that goes back to the debate about payments / reserve of value that still persists today. It is whether Bitcoin should be used for daily payments, such as buying coffee, or whether it is more of a protection against inflation – in this sense, favorably known as digital gold.

Dan Held, head of growth at Kraken, explained last month what it means to call Bitcoin “digital gold”.

“I don’t need to store my coffee transaction in an unchanging ledger. I don’t give a damn if they try to censor my coffee transaction. Go ahead, it’s okay, I’ll find out another way, ”he said, before explaining that being able to store value away from inflation was a much bigger mission – one that justifies all the maintenance expenses of the Bitcoin blockchain.

And that’s more or less what another commentator said to Musk in the Twitter thread.

“Granted; has latency and transaction costs. But, if used as a store of value and transmission of great values, it is extremely efficient. Currencies already function as currencies; Bitcoin does not need to replace them. Instead, btc is a patch to fix reserve banks’ inflationary insanity. ”Wrote the Twitter user, known as“Cerberus”.

A statement that Musk quickly understood. “Good point,” he replied.

Source: Decrypt

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