Elon Musk says Bitcoin is a 'replacement for cash'

By Daniel Phillips

In the most recent episode of the Third Row Tesla Podcast, Tesla and SpaceX CEO Elon Musk clarified his thoughts on Bitcoin and cryptocurrencies in general.

During the two-hour podcast, Musk was asked a variety of questions about Bitcoin, including what his current opinion was regarding the digital currency.

“I’m neither here nor there on Bitcoin,” said Musk, before elaborating that he thought the Bitcoin whitepaper was "pretty clever." He then showed concern about the use of Bitcoin in online crime, saying;

"There are transactions that are not within the balance of the law. And there are, obviously, many laws in different countries. [...] Normally, cash is used for these transactions. But, in order for illegal transactions to occur, cash must also be used for legal transactions. You need an illegal-to-legal bridge. That’s where crypto comes in."

In less technical terms, Musk essentially means cryptocurrency is being used as a go-between for the legal and illegal worlds, essentially allowing cash to be used for illegal purposes, using Bitcoin as the intermediary. This is a strikingly similar view to the one he shared back in 2014, during an interview at the Vanity Fair's New Establishment Summit.

When asked whether he was referring to the use of Bitcoin on the darknet—an anonymous collection of websites often associated with online crime—Musk clarified "It can’t be entirely dark because, otherwise, how do you buy normal stuff?" He then acknowledged that Bitcoin as a viable legal payment option in specific circumstances.

“Where I see crypto as is effectively a replacement for cash,” said Musk. “But not as a replacement for a primary—I do not see crypto being the primary database,” indicating that he doesn't believe cryptocurrency will be the primary store of value or transactional unit in the future.

These views might come as a shock to some of Musk's followers, since the Tesla CEO has joked around with cryptocurrencies in the past, and was even dubiously promoted to the CEO of Dogecoin back on April fools day last year. Earlier this month, he playfully tweeted "Bitcoin is not my safe word." But, with his recent comments, it looks like it will be a while before SpaceX—unlike its rival Karma Automotive—accepts Bitcoin.

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