Elon Musk predicts money will disappear! In the Bitcoin and AI era, "energy is the real currency"

Musk put forward a subversive assertion: in the long run, money will disappear, and the real money is energy. When AI and robotics reach a certain height, humans may enter a post-scarcity society, and money will no longer be needed. He believes that Bitcoin is the first digital asset to directly link currency to energy consumption due to its proof-of-work mechanism, and that work may change from a survival necessity to a personal choice in the next 20 years.

The collapse of fiat currency and the alarm bell of 38 trillion US dollar bonds

Musk has a clear understanding of the crisis of trust in fiat currencies. He pointed out that the U.S. debt has exceeded $38.3 trillion, and the continued expansion of money supply and debt will weaken purchasing power in the long run. In 2008, Zimbabwe’s inflation rate soared to 1,120 million, and the actual purchasing power of 100 trillion banknotes was only $25, and people wanted to spend the money as soon as they got it. This is not a distant history, but an extreme display of fiat credit collapse.

In Musk’s eyes, money is essentially an information system used to distribute labor. If someone is thrown on a desert island, even having a trillion dollars is useless because there is no manpower and services to exchange. This thought experiment reveals the fragility of monetary value: it depends entirely on the functioning of the economic system and the shared trust of people.

The deeper problem is that fiat currency can be printed indefinitely, but real value cannot be created out of thin air. When governments print a lot of money to support a collapsing economy, money becomes a hot potato and fails to fulfill its core function of store of value. This begs a core question: Is there a currency whose value does not come from government endorsements, but from something real, unforgeable, and cannot be arbitrarily increased?

Energy is the real currency of civilization

Musk’s answer is: energy. Banknotes can be printed, but energy cannot be increased out of thin air by legislation. It is extremely difficult to produce energy that can do work, so energy scarcity is much higher than money. The improvement of civilization does not depend on the amount of currency, but on how much energy utilization capacity has improved.

He cites the theory of civilization hierarchy proposed by Russian astrophysicist Nikolai Kardashov in 1964. The Kardashov index measures the stage of civilization development by energy usage: the first-level civilization controls about 10 of the earth’s energy to the 16th power of the earth, the second-level civilization controls about 10 of the stellar energy to the 26th power (requires a Dyson sphere), and the third-level civilization controls about 10 of the entire galaxy to the 36th power of the entire galaxy. Humanity is currently at level 0.72, not even a first-level civilization.

From this perspective, Tesla’s power and energy storage, SpaceX’s rockets and satellites, and XAI’s artificial intelligence actually point to the same thing: to make energy more efficient. Energy and Civilization, recommended by Bill Gates, states that energy is the only universal currency and is necessary to accomplish anything. Only when humans can systematically use extracorporeal energy can they become the most fault-dominating existence in the species.

The 2005 research book The Bottomless Well further states that energy orders are scarce and expensive. The key is not just the energy itself, but energy that can be used for any purpose. Instead of creating energy, power plants convert it into usable form, which is currently the most streamlined form of electricity. Society can only master everything else if it masters power itself, that is, the acquisition and release of energy.

Bitcoin: The first energy-pegged digital currency

Understanding the core position of energy can make it easy to understand why Musk said Bitcoin is an energy-based currency. The key lies in its Proof of Work mechanism. In the Bitcoin world, if you want to create a new coin, you don’t need to print money or modify numbers, but you must spend real energy, including electricity, mining machines, hardware, and computing power.

Behind every new Bitcoin is a quantifiable and non-fungible physical cost. Miners must invest a lot of computing and electricity to maintain network security, generate new blocks, and obtain new Bitcoins. In other words, Bitcoin does not emerge out of thin air, it is more like a carrier of value that requires energy to be minted. Therefore, it has the characteristics of a strong currency: fixed supply, cannot be increased at will, and cannot be copied.

Strategy CEO Michael Saylor popularized the concept of Bitcoin as a “technology for transmitting energy across time and space.” He said, “Money is energy. Bitcoin is the first encrypted energy network that collects all the world’s flowing energy and stores it without losing power.” Because the supply of Bitcoin is fixed at 2,100, coupled with the pure digital form, it has completely different characteristics from traditional currencies in terms of storing and transmitting monetary energy.

How Bitcoin mining is driving the global energy revolution

1. Monetization of non-competitive energy

· Mining uses energy that would otherwise be wasted

· Miners naturally look for the cheapest and most undervalued electricity

· Provides stable and predictable minimum income security

2. Plug-and-play flexibility

· No state approval or contract is required

· The mining machine can be turned on and turned off if it wants

· The time and location are completely flexible

3. Economic incentives for energy efficiency

· Rewards miners who find cheaper energy sources

· Promote the continuous improvement of energy efficiency

· Revitalize energy resources that have no economic value

4. The possibility of new human settlements

· Power generation facilities can be built in remote areas with abundant energy but no one lives

· First, rely on mining to monetize electricity and recover capital

· Reuse mining profits to build infrastructure to attract residents

Gridless Compute in Kenya has implemented this model, using hydropower to help settlements obtain stable electricity, and the surplus electricity is used to mine Bitcoin, generating additional income for remote communities.

AI prophecies to end the monetary era

Musk believes that what can really reduce the debt burden on governments is not tax increases or spending cuts, but the explosive production capacity brought by AI and robots. He predicted: “If technology is given another three years, the global supply capacity of goods and services will increase significantly, and inflation will move towards deflation because the supply of products is greater than demand. At that time, interest rates may fall close to zero, and the government’s debt pressure will naturally decrease.”

But Musk’s imagination doesn’t stop here. He predicted that in the next 20 years, human work may become a choice rather than a necessity for survival. With energy and computing power, AI and robots can mass-produce goods and services to meet everyone’s needs. As for the more distant future, it will enter the cycle of “AI for AI production”.

In such a world, the role of traditional money - including the distribution of labor, the distribution of scarce resources, the medium of exchange and the store of value - may gradually lose its meaning. When what is needed is almost free, value is not based on scarcity or labor costs, but on lower, more physical things like energy, resources, and computing power.

This also echoes what Musk said: “In the long run, money may disappear, and the real currency is energy.” In this context, Bitcoin may be the first step to that world. It shows that money does not need to rely on credit or government endorsements and can also be built on the cost of energy in the physical world.