Elon Musk argues that energy functions as the universe’s fundamental currency, requiring real resources for any conversion or transfer.

Musk’s argument

He contrasts this view with fiat currencies, which are created arbitrarily by monetary authorities without direct physical expenditure.

According to Musk, Bitcoin possesses a near-physical foundation because its issuance and security demand measurable energy and computational work.

He frames scarcity and production cost as consequences of natural laws rather than policy choices by central banks.

Bitcoin and energy

Mining operations worldwide consume gigawatts of electricity, transforming electrical energy into cryptographic proof and an entry on a distributed ledger.

Proponents interpret this expenditure as a tangible backing, contrasting with fiat systems where issuance often requires only electronic ledger adjustments.

Fiat money and issuance

Central banks expand monetary aggregates via balance-sheet operations and digital entries, a process often described as creating money with a button press.

Future currency debate

The discussion outlines three perspectives about future money: continued fiat use, wider cryptocurrency adoption, or valuation frameworks tying value to time.

Public and private institutions may adopt hybrid systems combining energy-based proofs, regulatory-backed fiat, and programmable digital assets for different functions.

• Continued fiat: states retain legal tender status while monetary policy manages liquidity, credit and inflation through central banks' instruments.
• Wider cryptocurrency adoption: digital assets see broader payment and store-of-value use, constrained by network energy needs and scalability.
• Time-based valuation: economic systems could emphasize time, attention or labor as directly monetized units for exchange and accounting.

Debate continues among technologists, policymakers and market participants about which combination will serve as money in diverse economic contexts.