Cryptocurrency exchange Coinbase has claimed that Tesla and SpaceX are both customers. It says that both companies have used the platform to buy large amounts of Bitcoin.
Elon Musk has been critical of government-backed, or “fiat,” currencies, saying that their inflationary nature makes them a poor store of value. Governments can always print more money whenever they want. Tesla’s balance sheets showed $1.5 billion in Bitcoin holdings earlier this year and Musk says that the company might acquire more to hedge against negative interest rates in places like Europe.
By contrast, Bitcoin creator Satoshi Nakamoto baked an upper limit of 21 million bitcoins into the code and claimed that lost bitcoins were “a donation to everyone” who holds bitcoin because they can’t be replaced without access to the digital wallet’s private key.
Elon Musk has also occasionally been critical of Bitcoin, saying that it’s just one step above fiat currencies and it isn’t very environmentally friendly. He did say that Tesla might reinstate the option to purchase an electric vehicle with Bitcoin if its image problem as an electricity-guzzler can be addressed. In response, major North American Bitcoin mining firms formed the Bitcoin Mining Council with the goal of greater transparency in the energy sources used for their operations.
(Yes, “Jeff who?”)
Coinbase saw Q2 2021 revenue of $2.23 billion, significantly up from $178 million in the same quarter of 2020. Verified users have risen to 68 million.
Coinbase’s recent cryptocurrency additions include Dogecoin, which besides being Elon Musk’s favorite cryptocurrency, saw 6,000% gains this year. Institutional investors have flocked to Bitcoin as a form of “digital gold,” though some OG Bitcoin insiders have hopped to other cryptocurrencies that they say are better designed to be “digital cash” that is easy to spend.
Considering Elon Musk’s involvement, how likely is it that cryptocurrency could go to the literal Moon or Mars? Despite the “DOGE-1” mission being funded with Dogecoin and a handful of past proposals to launch Bitcoin nodes as satellites, there may not be any concrete plans yet. However, that doesn’t mean that it won’t happen. Elon Musk has dished on his plans to build a large and growing settlement on Mars at events like last year’s Mars Society conference and it would logically follow that an enormous Martian settlement will need a medium of exchange at some point.
Plus, there’s Marscoin, which debuted at the Mars Society conference six years ago:
And, beating the odds for a cryptocurrency, Marscoin is still active and just recently held its first online expo:
Even so, digital currencies like Kenya’s M-Pesa have caught on with people who don’t have easy access to financial services. The associated cryptographically secured ledger, commonly called blockchain, has also been suggested as a way to manage a futuristic space economy in books like Blockchain Space and Blockchain & The Space Economy.
Is putting Tesla’s and SpaceX’s reserves into cryptocurrency a good move, though? Tesla’s investors don’t seem too terribly razzed by it – at least, they aren’t as upset about it as they are about the acquisition of SolarCity yet. Cryptocurrencies are highly volatile assets, as evidenced by Dogecoin’s meteoric rise this year and Bitcoin’s frequent bouncing around like a jumping bean. However, historically, Bitcoin has performed way better than many assets. As of August 12, 2021, one Bitcoin is worth US$44,688.08, as opposed to far less than one cent when it was first introduces in January 2009.