During a podcast appearance with the blogger Nikhil Kamath, Musk stated that because the price of Bitcoin is linked to energy expenditure, this forms the fundamental divergence between the cryptocurrency and conventional fiat currencies. The CEO of Tesla highlighted the inherent challenges associated with both producing and consuming energy. The billionaire reasoned that Bitcoin’s Proof-of-Work (PoW) consensus mechanism necessitates substantial computational power and a considerable amount of electricity.
“Energy really is the ultimate currency, and Bitcoin is underpinned by energy. You cannot legislate energy itself. You can’t just pass a law and suddenly conjure up a lot of energy,” Musk declared.
Musk brought up the Kardashev scale, a system used to quantify a civilization’s technological advancement based on its energy consumption levels. The businessman contended that evaluating a civilization by its prowess in generating and controlling energy mirrors the core concepts of Bitcoin, whose value is determined by its limited coin supply and the computational expense involved in its creation.
The billionaire speculated that conventional money might become obsolete due to advances in artificial intelligence and robotics. Unlike fiat currencies, which governments possess the authority to print without limit, Bitcoin’s supply is capped at 21 million coins, and crucially, it remains insulated from governmental political maneuverings. As Musk phrased it, governments have the capacity to print currency, but they lack the ability to print energy.
On a related note, Elon Musk previously suggested to the U.S. Department of the Treasury that shifting transactions onto the blockchain could serve as a mechanism to curb budgetary misuse and enhance the transparency of public spending.
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