Some of the biggest names in the crypto industry shared the limelight at The B Word conference. The list includes the CEO of Tesla, Inc. (NASDAQ: TSLA), Elon Musk, a Square, Inc. (NYSE: SQ) and the CEO of Twitter, Inc. (NYSE: TWTR), Jack Dorsey, and Cathie Wood from Ark Invest. Below is a highlight of some of the key takeaways from each participant.
‘Thinking about money for a long time’
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Elon Musk said he has been “thinking about money for a long time.” You certainly have a lot of first-hand money transfer experience as a co-founder of PayPal, which was designed to transfer funds in real time. Aside from PayPal, money tends to move slowly as it exists “in a series of heterogeneous databases,” he said. As such, moving money from one end of the world to the other could take up to five business days, if not longer. The existing financial system also suffers from security flaws. Musk added:
I think it makes sense to support something that improves the quality of information with which we conduct the economy, and Bitcoin is a candidate for that.
Negative interest rates ‘drive me crazy’
Europe’s negative interest rates “drive me crazy” because it means that Tesla’s bank balances mean that “we are paying them to hold our money.” Typically, if inflation spreads to 2% and interest on cash yields a 1% return, then the holder is only down 1%. But if inflation is 2% and Tesla is forced to pay another 2% due to interest rates, it is “crazy” that the money is essentially disappearing.
‘I really hate the government’
Musk has a simple message for the many people who consider themselves anti-corporate but pro-government. In reality, the government is the “largest corporation of all” with a “monopoly on violence.” He added:
So if you don’t like corporations, you really should hate governments.
This is not the first time Musk has equated governments with corporations. In late 2020, he said that the government’s role in fostering economic development should be similar to that of a “referee.” The problem is that, in many ways, governments want to be the ‘referee’ and ‘a player on the field’.
‘I started talking about this’ called Bitcoin
Cathy Wood’s curiosity about cryptocurrencies dates back to 2011, when her company’s research director, Brett Winton, “started talking about this thing” called Bitcoin. After extensive research, he felt that Bitcoin could become a payment platform “that the Internet forgot to integrate into the system.”
Wood asked his mentor Art Laffer to contribute to an article and he was “a bit of a detractor at first.” But the famed economist quickly changed course, saying that this is a “monetary system that I have been waiting for my entire career.”
Bitcoin will be ‘much greener’
Asset managers have come under increasing pressure to promote ESG (environmental, social, governance) practices as much as possible. Wood said that Bitcoin is moving in the direction where it can be “much more environmentally friendly,” especially compared to traditional gold mining or financial services sectors.
He went on to say that somehow Bitcoin already satisfies social considerations. For example, global remittances is a $ 700 billion dollar industry, and moving money to countries experiencing double or even triple digit inflation carries expensive fees, both direct and indirect. Bitcoin could save people the large transfer fees charged by financial institutions, as well as the “destruction of their purchasing power.” This is “certainly a noble social goal,” he said.
Bitcoin can ‘replace the entire base’
Today’s payment network was built “with very different schedules” over a “very different period of time,” said Jack Dorsey. It is difficult to understand who outdated transfer systems like ACH “still exist” today, as they are “not relevant for the future.” He said:
If the Internet has a chance to get a native currency, what will it be? And for me, it is Bitcoin.
Bitcoin spurs energy innovation
Current sustainability concerns related to Bitcoin mining could incentivize energy companies to create new solutions. An example is a company called Great American Mining that limits methane flares in oil fields to fuel its rigs.
This is part of the larger conversation that is being “lost” and deserves more attention.
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