When speaking about topics related to wealth and financial independence, one should have at least an idea of how the economy works.
And for Elon Musk, the serial entrepreneur regarded as the richest man on Earth, money to him is just like what money is to everyone else.
It's something that can be used to buy things.
But for Musk, he likens it to information system.
In an interview with Ark Invest CEO Cathie Wood in an X's Space conversation, responding to crypocurrency's potential impact on the financial system, Musk said that.
However, he admitted that he has spent quite a great deal of time thinking about what money actually is, adding that:
"What is money? It's really a database for resource allocation."
According to the eccentric billionaire who owns the X platform, fiat currency is "actually fine as a database for resource allocation," but on certain conditions.
" [...] if you have a predictable money supply and it doesn’t get inflated or deflated too much, it is rules-based and provided the government does not too much abuse the privilege to create more money.”
Musk said that he would think of the money system as applying information theory to money problems.
"You want to minimize noise, minimize latency, minimize packet loss. And so inflation would be adding noise to the system."
Musk stated that "an unavoidable temptation to debase the money supply" in humanity can be traced back to the times when people tried getting access to goods they didn't have.
They started bartering the goods, before developing more sophisticated forms of exchanges using commonly agreed commodity currencies such as bronze or copper ingots or even cowry shells. Then, people needed something more convenient, easier to store and carry. This was when they needed coinage, and that metal was then used.
Including gold.
Musk’s comment comes as his firm, Tesla, appears to continue to hold digital assets on its balance sheet.
During his interview, the electric vehicle maker has the third-largest Bitcoin holdings among publicly traded companies, coming below to only MicroStrategy and Marathon Digital Holdings, according to data from bitcointreasury.net.
Tesla also accepts Dogecoin for payment.
Musk is a well-known supporter of the original meme cryptocurrency Dogecoin. In the past, he frequently endorsed DOGE, talking about it as the “people’s money” or posting memes related to it.