"Money will disappear"! Musk supports Bitcoin: Energy is the real currency.

Elon Musk stated in a recent podcast that he believes “money as a concept will ultimately disappear.” He emphasized that even in such a post-scarcity era, “energy is the real currency,” and pointed out clearly that “this is why I say Bitcoin is energy-based.” He stressed that energy cannot be controlled through legislation, and that producing energy is very difficult, therefore “we are likely to eventually use energy and power generation as de facto currency.”

Musk's Vision of the Post-Scarcity Era and the End of Money Thesis

(Source: X)

In a recent podcast with Indian entrepreneur and investor Nikhil Kamath, Musk stated that he believes “money as a concept will ultimately disappear.” He described this idea as “a bit strange,” but thinks that in the future “anyone can own anything,” and people “no longer need money as a database for labor allocation.”

This radical viewpoint is not a fleeting whim of Musk, but rather based on his profound insights into the trends of technological development. He directly connects this vision with advances in artificial intelligence and robotics. “If artificial intelligence and robotics develop to the point where they can meet all human needs, then the importance of money will significantly decrease,” he said. The logic chain is clear: when productivity is infinitely abundant and goods and services approach zero cost, money, as a medium of exchange and a measure of value, will lose its foundational existence.

To support this point of view, Musk mentioned science fiction novels. He cited the “Culture” series by Scottish author Iain Banks and recommended that everyone read it. In this series, human civilization has developed to a post-scarcity stage, where energy and materials are abundant enough to meet everyone's needs, and traditional forms of currency have disappeared. People no longer need to work for survival but instead pursue self-realization and creative activities.

Elon Musk pointed out that in the distant future, “they also have no money, and almost everyone can get everything they want.” This utopian vision, while sounding far-off, may not be entirely impossible considering the rapid development of artificial intelligence. When AI can handle most cognitive work and robots can complete most physical labor, the production model of human society will undergo fundamental changes.

However, Musk also acknowledges that this is a long-term vision. He has not set any timeline for the transition to an energy-based value system, and his vision assumes a level of prevalence of artificial intelligence and robotics that remains speculative. Currently, national currencies and traditional payment channels continue to dominate trade, savings, and wages, while Bitcoin is traded as an asset and is also a long-term bet against another currency order.

Energy-based Currency: The Ultimate Currency That Cannot Be Legally Controlled

Elon Musk stated that even in this post-scarcity era, certain forms of value remain crucial. He told Kamas that there are “some fundamental currencies based on physics,” and then the topic shifted to energy. “Energy is the real currency,” he said. This statement is the core of Musk's entire argument and represents his fundamental redefinition of the nature of currency.

Musk then clearly distinguished between energy and political power. “You cannot control energy through legislation,” he said. “You cannot suddenly have a large amount of energy just through legislation.” He stated, “Producing energy is very difficult, especially using it in an efficient way to make it have a practical effect.” This discussion reveals the fundamental advantage of energy over fiat currency: physical constraint.

The supply of fiat currency can be adjusted arbitrarily through the decisions of governments and central banks. Quantitative easing policies can create trillions of dollars in new currency in a short period of time, while tightening policies can shrink the money supply. This ability to manipulate is an advantage of fiat currency (providing policy flexibility), but it is also its weakness (inflation risk and credit collapse). In contrast, energy is subject to the laws of physics; no matter how governments legislate, energy cannot be created out of thin air. The production of solar energy, wind energy, and nuclear energy requires actual investment, technology, and time.

He said, “We are likely to ultimately use energy and electricity generation as a de facto currency.” In this framework, whoever controls the most efficient and abundant energy effectively controls the most powerful “currency.” This perspective shifts the definition of wealth from abstract numerical symbols to concrete physical capabilities. The true wealth of a nation or entity is no longer determined by its currency reserves, but by its energy production and utilization capabilities.

The Three Major Characteristics of Energy as the Ultimate Currency

Physical Constraints: Cannot be created out of thin air through legislation, subject to natural laws and technological capabilities.

Unmanipulability: The government cannot arbitrarily increase the issuance of energy, and there is no “energy quantitative easing”.

Universal Value: Energy is the foundation of all economic activities, and its value is independent of political systems.

This concept aligns with the proof-of-work model of Bitcoin, which has transformed electricity and hardware into verifiable digital scarcity. Supporters often argue that this linkage to real-world energy costs creates a monetary system that cannot be artificially manipulated by central banks or tampered with by politicians.

Bitcoin as the perfect embodiment of energy currency

This statement introduces his argument about why Bitcoin fits this picture. “That's why I say Bitcoin is energy-based,” Musk continued. The design of the network forces miners to spend real electricity and computing power to secure the system, which, in his view, connects digital value with the physical world.

The proof-of-work (PoW) mechanism of Bitcoin is the technical realization of this energy-based system. Miners must consume a large amount of electricity to perform SHA-256 hash calculations to find blocks that meet the difficulty target. This process is essentially converting electrical energy into digital scarcity. Behind each Bitcoin is actual power consumption and hardware investment, and this physical cost provides an intrinsic value anchoring for Bitcoin.

In Musk's vision for the future, energy will replace currency, and Bitcoin happens to fit this model perfectly. While other cryptocurrencies adopt more energy-efficient consensus mechanisms like Proof of Stake (PoS), Bitcoin's adherence to Proof of Work may seem outdated, but from the perspective of an energy-based system, this is actually its greatest advantage. The creation of PoS tokens does not require energy consumption, relying solely on the number of tokens held by the holders, which makes it closer to the “arbitrary creation” model of fiat currencies.

Musk's discourse provides a completely new value narrative for Bitcoin. The Bitcoin community has long emphasized its “digital gold” property, making scarcity its core value proposition. However, Musk's energy currency theory offers a deeper philosophical foundation: the value of Bitcoin is not only due to its limited supply (with a cap of 21 million), but also because each Bitcoin represents real energy consumption that cannot be reversed or created out of nothing.

The Ongoing Confrontation Between Energy Disputes and Environmental Criticism

Regulators and activists continue to debate whether Bitcoin promotes or harms energy systems. At the time Musk made these remarks, the energy consumption issue of Bitcoin remains one of the most controversial topics in policy circles. Environmentalists are concerned about carbon emissions and grid pressure, while supporters argue that mining can incentivize cleaner power generation methods and improve grid load balancing.

According to the Cambridge University's Bitcoin Electricity Consumption Index, the annual electricity consumption of the Bitcoin network is approximately 150 TWh, which is equivalent to the total electricity consumption of medium-sized countries like Argentina or Norway. This figure alone is enough to spark controversy. Environmental organizations have accused Bitcoin mining of exacerbating global warming, especially when mining uses high-carbon energy sources like coal power. Some countries, such as China, have already banned Bitcoin mining outright, citing energy consumption and environmental impacts.

However, Bitcoin supporters have raised counterarguments. First, Bitcoin mining can utilize excess renewable energy. Hydropower plants generate less electricity during dry seasons, and wind and solar energy have intermittent issues; this excess or unstable energy is often wasted. Bitcoin mining can absorb this energy, improving overall energy efficiency. Second, Bitcoin mining can incentivize investment in renewable energy. Since mining requires cheap electricity to be profitable, miners are motivated to seek the cheapest energy sources, and the marginal cost of renewable energy is close to zero, making it the most competitive option in the long run.

Third, the energy consumption of the Bitcoin network needs to be evaluated in the context of the value it provides. The traditional financial system, which includes bank branches, ATM networks, data centers, armored cash transport vehicles, etc., has a similarly huge total energy consumption, yet few question it. If Bitcoin can indeed replace some functions of the traditional financial system, its energy consumption could be a net saving rather than a net increase.

Elon Musk's position in this controversy is quite nuanced. He had previously suspended Tesla's acceptance of Bitcoin payments due to environmental concerns, but he has now expressed recognition of Bitcoin's energy-based properties. This attitude may reflect his observation of the increasing proportion of clean energy mining. In recent years, more and more Bitcoin miners have turned to renewable energy, with some studies showing that over 50% of Bitcoin mining power comes from renewable energy.

The Gradual Shift from Science Fiction to Reality

Musk cites Iain M. Banks' “Culture” series of novels as a reference framework, demonstrating that his thinking on this future vision is not isolated. Science fiction has long explored the possibilities of a post-scarcity society, and Musk connects these thought experiments with current trends in technological development. Currently, national currencies and traditional payment channels continue to dominate trade, savings, and wages, while Bitcoin is traded as an asset and also represents a long-term bet against another monetary order.

For cryptocurrency investors, Musk's narrative provides a long-term value support narrative. Bitcoin is not only digital gold but also a forerunner of future energy-based currency systems. This narrative may attract investors who believe that technology will fundamentally change human society, but it also requires immense patience, as the realization of this vision may take decades or even longer.