The B Word Live: Bitcoin as a Tool for Economic Empowerment with Elon Musk, Jack Dorsey & Cathie Wood
Primer: Join Elon Musk (SpaceX, Telsa), Cathie Wood (Ark Invest) and Jack Dorsey (Twitter, Square) in this incredible lineup of exceptional CEOs held at The B Word conference, to hear their thoughts on all things related to Bitcoin and the crypto world in general.
What shaped and influenced your views on Bitcoin?
Cathie
Started as a curiosity when Brett Winton, Director of Research, started talking about Bitcoin in 2011 when brainstorming
Realised the internet didn't have a payment system because it was built for commerce
Her mentor, Arthur Laffer, was asked to collaborate on a paper on Bitcoin
He was initially a naysayer but realised it is a rule-based monetary system he had been waiting for his entire career.
"But as we learn more about this open source ecosystem, that might fulfil the role of the payment system that the internet neglected to build into the system, not expecting commerce, we thought this might be something." - Cathie Wood
Elon
Been thinking about money since PayPal days
Money as an information system for labour allocation
Which system has the most throughput?
Which system has the least error lost and drops the fewest packets? (fraud or governmental interference are sources of error)
Current systems are not secure, like ACH and credit card system
Hence makes sense to support something that improves the quality of information which we conduct the economy
Bitcoin is a good candidate with potential, but still, some issues that need to be ironed out
Tesla owns Bitcoin, Elon owns Telsa and personally own Bitcoin - would want Ethereum and Dogecoin
"And you've got the credit card systems, which are also not secure to be like handing your username and password to a stranger in a restaurant if you buy a meal. So there's definitely an opportunity for something that is that is better from an information theory standpoint." - Elon Musk
Jack
The network and the community are deeply principled
Reminded him of the old cypherpunks when he was fairly young
Inspired to work around the existing predatory financial system, but realised Bitcoin can replace the whole foundation instead
Older payment systems are not relevant to the future, especially in other countries
"If the internet gets a chance to get a native currency, what will that be? And to me, it's Bitcoin because of those principles, because of that creation story, because of its resilience, because of the number of tests it had been." - Jack Dorsey
Bitcoin changes everything
Jack
Our monetary policies and systems cause a lot of distraction and it is costly
Bitcoin is not controlled by any state, bank or corporation, and is trustless and verifiable through the source code
All the advertising business models we have on social media platforms will change if Bitcoin is around
A lot of innovation opens up when the whole internet is considered instead of going to different countries individually
"If I happen to be in Ghana, and my family is from Nigeria, currently I can take anywhere from 10 to 30% off the top just to send that money back." - Jack Dorsey
If Bitcoin is the internet's native currency, then will solve the global remittance problem because it will cost less, is a simpler system and is way faster
Thoughts on Bitcoin's fixed supply cap
Cathie
US monetary base is 8 trillion dollars and is still rising, causing inflation/hyperinflation
There are 3 roles of money: store of value, means of exchange, unit of account
Bitcoin serves the primary role as a store of value because it is capped at 21 million units - not so much of the other 2 roles
Purchasing power goes up globally against a fixed supply is a good thing
Hedge against the confiscation of wealth through inflation or hyperinflation, especially in emerging markets
Also hedges against deflation and associated counterparty risk in the United States
Can Bitcoin become peer to peer cash?
Elon
Bitcoin has a fundamental scarcity limit at the base layer, so it cannot scale to be the monetary system for the world
However, we can add in layer 2 systems like lightning, to scale up - the same goes for Ethereum
Can also consider something else that has higher maximum throughput with lower transaction costs
"I think there's some merit to consider something that has higher max transaction rates, and lower transaction cost, and kind of seeing how far you could take a single layer network where the exchanges act as a de facto second layer." - Elon Musk
Will scaling cost Bitcoin in terms of decentralisation and also its censorship-resistant properties?
The average person is not going to run a Bitcoin node
The trend now is to have higher bandwidth with lower latency for Internet connections
Confident that we can maintain a decentralised financial system while still having a much bigger hash ledger
Had an idea of running a mining node (BTC, ETH or DOGE) in space
"I had this idea, which is kind of off-the-wall, but let's say you need a little space heater. And normally your space heater would just be pure entropy. Well, what if that space heater was also a Bitcoin, Ethereum, Doge mining node? Pick your currency. And so then you'd be heated up." - Elon Musk
Why is Elon Musk drawn to Dogecoin?
Elon
Loves memes and dogs
The DOGE community doesn't treat itself seriously
Had a variant of Occam's razor - The most ironic and entertaining outcome will be the most likely one
Hence a cryptocurrency that began as a joke but ended up as the leading cryptocurrency will be ironic and the most likely outcome
Bitcoin and its energy concerns
Elon
Appears to be a positive trend in renewable energy usage for Bitcoin because of a drop in Bitcoin price
Had said that Tesla will resume accepting Bitcoin as payment only if renewable energy usage in mining is 50% or higher
Emphasized that both he and Tesla are not selling any Bitcoin and their position in Bitcoin is more than in Ethereum or Doge
Showing reticence about Bitcoin energy usage will hurt them financially - still had to be done because Tesla's mission is to accelerate the use of sustainable energy
Need to confirm due diligence, but likely the renewable energy usage is likely now at or above 50%
Most likely Tesla will resume Bitcoin payment
Problem with using mainly renewable energy like solar or wind to mine Bitcoin
Running hashing rigs requires a baseload to run 24/7
If we are using solar or wind energy only, hashing regularisation will be much less
Will have to use solar, wind plus battery to ensure a stable source of energy
Jack
Imagine being able to convert all the unused energy that we are dumping and not using anyway, and using it to mine for Bitcoin
Ark and Square came up with a paper to look into this - how the energy asset owners of today can become the essential bitcoin miners of tomorrow
What can be done to accelerate the transition to renewable energy?
Elon
Tesla reason for existence is to solve this type of problem
The company's limiting factor is cell production - can't get enough supplies to make batteries
Existing hydroelectric energy sources, geothermal and also nuclear energy are all good
In the long term, renewable energy will actually be the cheapest form of energy but won't happen overnight
Bitcoin's relationship with ESG
Cathie
ESG - Environmental, Social, Governance
There is a huge movement in the institutional world to embrace ESG
E - Believes that Bitcoin is currently and will be much more environmentally friendly than traditional gold mining or the traditional financial sector
S - Allowing access to payment technology worldwide that saves on fees, also saving citizens living in countries with double, triple digit inflation from the destruction of their purchasing power
G - Complete transparency of the ecosystem, with a huge part played by the Bitcoin core developers who knows economic history better than most people, with a sense of purpose for a noble goal
What can corporations do to preserve Bitcoin ethos?
Jack
Sceptical of corporation since young
Square Crypto is created to hire open source developers to work on whatever they think is important to help Bitcoin
Formed a non-profit organisation called COPA which they gave up all of their crypto patents to persevere the industry's open source spirit
Going to do a lot more in hardware and software in a transparent and open manner
Has the potential to change everything and make lives better for everyone on the planet
His own personal role in the companies he runs is to push for more decentralisation - more open development and more open source
The biggest focus right now is on a decentralised social media protocol named Blue Sky
Considering letting Twitter advertisers pay in crypto, also to focus on creating economic incentives in the network itself rather than on advertising
Cathie
Ark stands for 2 things: democratization and transparency - have Bitcoin DNA
"We're the closest you'll find to venture capital funds in the public equity markets. And I kind of feel that we have bitcoins DNA from that point of view." - Cathie Wood
One of Ark's missions is to educate
Retail community is attracted to them first, then now the institutional community is coming along
There is transparency of research in the social media, pushing out their research for free to anyone in order to help the community
Elon
Believes if there are more off ramps from crypto to real products and services, it'll be better
Supporting crypto has the highest probability in terms of making the future good
Good to have a prosperous crypto market so that it will have an empowering effect on the individual and increase the power of the individual relative to the government
"Really, you know, if you think of government, it is just a corporation in the limit. So sometimes, some people are against corporations, but for government. It's like, guys, a government is just a corporation in the limit. It's the biggest corporation of all, and it's got a monopoly on violence." - Elon Musk
Government is really a corporation with a monopoly on violence
Thoughts on Bitcoin on the company's balance sheet
Cathie
Learned from the experience of Square and Tesla in putting Bitcoin on their balance sheet that it is treated as an intangible asset
With an intangible asset, if the asset goes up in price, it cannot be marked on their books yet if it goes down, it must be marked down
This asymmetry needs to be changed before considering putting Bitcoin on their balance sheet
Agrees there is a lot of good in doing so though
Elon
Tesla's bank balances in Europe have negative interest rates which is insane
Hopes for Bitcoin in the future
Elon
Hopes that crypto, in general, will improve the efficiency of the information system that we call money
If the core efficiency of money is improved and it has less error, it will naturally lead to a better standard of living, giving more power to the individual
Cathie
Hopes that crypto may be the best money in the ESG point of view so that it can solve some of the world's problems
Is excited about the idea of the network effect and the convergence of blockchain technology and artificial intelligence in ways that cannot be imagined right now
Jack
Hopes for world peace
All the monetary system today costs us and distracts us from the bigger problems that we can get to solve like multi-planetary humanity
Once the foundational problem is fixed, everything around will improve tremendously in the long run
All information presented above is for educational purposes only and should not be taken as investment advice. Summaries are prepared by The Reading Ape. While reasonable efforts are made to provide accurate content, any errors in interpreting and summarizing the source material are ours alone. We disclaim any liability associated with the use of our content.