Elon Musk: Bitcoin Structure is Brilliant, But Has Its Cons; Paper Money is Going Away (ark-invest.com)

Elon Musk, who among other things, is a pioneer in the payments industry, has weighed in on one of the most divisive topics in finance today: Bitcoin. In a podcast with Cathie Wood of ARK Invest, Musk, the co-founder and chief executive of electric car maker Tesla, was asked to "go off topic" and offer up some thoughts on the most famous cryptocurrency. From a report: "I think the bitcoin structure is quite brilliant. But I'm not sure that it would be a good use of Tesla's resources to get involved in crypto," he told Wood. Musk, who founded PayPal, added that the days of paper money are numbered and digital currencies could offer a more efficient solution to shifting value. "Paper money is going away and crypto is a far better way to transfer value than pieces of paper, that's for sure, but it has its pros and cons," he said.

Comments

Re:Physical money will never go away

[fahrbot-bot]

If he means money made of paper, then he's probably right, but wrong otherwise.

Case in point, the Bank of England now uses polymer banknotes for their current £5 and £10 denominations and will use that for higher ones in 2020. Many other countries have done the same for their currencies. Polymer notes are (reportedly) cleaner and stronger (allowing them to last longer) and safer (can incorporate more security features).

Those folks are already getting debit cards

[rsilvergun]

shoved down their gullets. I know a few guys with fucked up finances and crap jobs. They don't get checks, they get money on a debit card every week or two.

It's sucks of course. There's fees and it's a major pain to use. But here's the rub: nobody really cares about these people. I mean, the current administration just rolled back a ton of consumer protection and anti-payday loan rules and nobody batted an eye. I only know about it because the crazy left wing sites I like complained about it (the kind that run articles on "The high cost of being poor".

TL;DR; If you're well enough off that you matter you're already getting away from cash because going to understaffed banks and waiting in line is a drag. If you're poor enough to depend on cash you're gonna get dragged into the cashless economy and taken advantage of by it, but nobody care.

Re:Physical money will never go away

[Enigma2175]

An even better example is Donald Trump. In 1995, he claimed a loss of $916 million on his personal tax return. But he didn't lose a billion dollars. His company didn't even lose a billion dollars. The banks that lent him the money that he lost on his horrible property deals were the ones that realized the loss. From TFA:

Investors, for example, can walk away from a property and record the investment as a loss — even if they were playing with borrowed money. While a profit from that same property would be treated as a capital gain, losses are treated as “operating losses” under a tax code provision that dates back to the Great Depression. Those losses can be deployed far more flexibly than capital losses to shield other income from taxation.

“He was forced to sell many of his investments in the early 1990s, at pennies on the dollar, teetering on bankruptcy,” Edward Kleinbard, a tax expert at the University of Southern California, said of Mr. Trump. “There were real economic losses from those investments — borne entirely by the lenders. Yet nonetheless he was able to emerge with a large net operating loss to carry forward, attributable primarily to losing other people’s money.”

Not to mention the fact that any money that he acquired previous to that (mostly from his father) wasn't taxed either, partially by exploiting the current laws and in some cases just flaunting them to dodge taxes. Things like vastly understating the value of property that his father was transferring to Donald in order to avoid gift taxes, setting up sham corporations to funnel money to Donald and his siblings and getting paid large sums of money for "property management" services when Donald was just 3 years old. Some of the techniques were legal, some were of questionable legality and some were blatantly illegal. But rich people have armies of lawyers to besiege the IRS when anything is questioned so they rarely are held accountable even for the small fraction of tax frauds that are discovered.

And the whole reason that some of these tax schemes are legal is because the government is owned by the rich and powerful, they basically shape any tax legislation to their ends. Rich people have obscure methods for shielding their income from taxes because they wrote the laws that created those methods. It takes a hell of a lot of landscapers under reporting their income to equal the taxes dodged by one billionaire.