Elon Musk weighs the pros and cons of Bitcoin on Mars

SpaceX founder and Tesla CEO Elon Musk has raised the possibility of using Bitcoin on Mars but highlights transaction speed issues as a hurdle. This revelation comes as Musk continues to pursue his vision of establishing a human colony on the Red Planet by 2050.

Musk’s initial resistance

Elon Musk, a multimillionaire entrepreneur known for his ambitious space exploration goals, recently discussed the potential use of Bitcoin as a currency on Mars. In a conversation with the CEO of ARK Invest, Cathie Wood, Musk initially expressed skepticism due to the extended settlement time required for Bitcoin transactions.

“It would make sense to use some kind of cryptocurrency on Mars; you couldn’t use Bitcoin because the reconciliation is too long,” Musk remarked.

This reluctance was rooted in the fact that Bitcoin transactions typically take a significant amount of time to settle, posing practical challenges for a potential Martian economy.

However, Musk, known for his innovative thinking, did not entirely dismiss the idea. He began considering the feasibility of using Bitcoin on Mars by comparing the distance between Earth and Mars in light minutes. Musk noted that Earth is approximately eight light minutes away from the sun, whereas Mars is around 12 light minutes away.

Elon answers what money he would use on Mars: pic.twitter.com/VJQeIM0qqJ

— Sam Callahan (@samcallah) January 11, 2024

After some contemplation, Musk appeared to change his stance, stating, “Perhaps you can use Bitcoin to some degree, but it would be difficult to use it a lot on Mars.” He suggested that a localized network on the Red Planet might be necessary to address the distance’s unique challenges.

Bitcoin’s transaction speed issue

One of the primary challenges of using Bitcoin on Mars is the transaction settlement speed. Currently, Bitcoin transactions can take up to one hour to secure due to the nature of its blockchain, which assembles transactions into 10-minute blocks. Six confirmations of these blocks are required before a transaction is considered finalized.

To address this issue, Elon Musk agreed with Bitcoin core developer Matt Corallo, who proposed the implementation of a localized Lightning Network on Mars. The Lightning Network is a second-layer solution that facilitates faster and cheaper Bitcoin transactions.

Varied opinions on Bitcoin’s viability on Mars

While Musk and Corallo discussed the potential for a localized Lightning Network, opinions on the feasibility of using Bitcoin on Mars varied within the crypto community.

Blockstream CEO Adam Back expressed optimism about the idea, suggesting that Bitcoin’s current structure could work on Mars without a localized Lightning Network. Back argued that the 12-22 light-minute delay posed no significant obstacle to Bitcoin’s 10-minute block confirmation process.

Challenges ahead

Despite the growing interest in using Bitcoin on Mars, substantial challenges remain. The need for a localized network and the transaction speed issue are just a few hurdles to address before cryptocurrency can become a practical means of exchange on the Red Planet.

Furthermore, the establishment of a human colony on Mars itself presents numerous technical, logistical, and scientific challenges that extend beyond the realm of cryptocurrency adoption.