The richest man on earth has been flirting quite a bit with bitcoin, stating he’ll never turn down getting paid in bitcoin again.
“The thing we call money is just an information system for labor allocation,” Musk said, adding:
“What actually matters is making goods and providing services. We should look at currencies from an information theory standpoint. Whichever has least error and latency will win.”
That’s an interesting perspective with a recent editorial arguing that measuring many aspects with bitcoin can reveal information which the fiat measurement can’t.
That’s because bitcoin is a fixed measurer of value. In theory or in the abstract, the value of bitcoin doesn’t change, it’s the value of everything else that changes.
That can be very valuable because the size of one meter does’t change. It’s the length of a table or a SpaceX rocket that changes.
Likewise one bitcoin is one bitcoin. It can’t be made into two or five. It’s fixed. One dollar however isn’t quite one dollar. The total base supply was $4 trillion last year. It is heading for $8 trillion this year. One dollar therefore in effect has become two dollars.
Because unlike a ruler, what is one meter here changes all the time, ascertaining the length of a space rocket or labour allocation is like measuring the height of a wave in the ocean. Doable, but very difficult.
With a fixed value measurer and under the assumption the value of everything else changes while its value doesn’t, measurement is as easy as getting your ruler out.
That’s in theory. In practice it remains to be seen, but the fact Musk has the same perspective as well makes it a bit interesting because it suggests he might be seeing some value in bitcoin.
In which case, he might even allocate some of his value to this different measurer with Barry Silbert of GrayScale recently stating:
“Twitter is going to absolutely lose it’s shit when Elon/Tesla disclose bitcoin holdings.”
We wouldn’t read too much into it, but SpaceX claims independence in space, which arguably they can’t quite implement with any government money, so holding some bitcoin could make sense.
That said, there’s no indication Musk plans to do so, but he is clearly learning a lot about bitcoin.