Paul Krugman explains why Tesla is like Bitcoin

Originally published at: Paul Krugman explains why Tesla is like Bitcoin | Boing Boing


Tesla: the problem with the electric car is that lithium storage is the current preferred model for most, but there isn’t enough lithium on the planet to power every car. Hydrogen fuel (or fuel cells) is the probable future for EVs.

Bitcoin: I saw a comment on how in the late 90’s there was “too much money chasing too few investments”, which was part of the sub-prime mortgage crisis, monetizing debt as an investment, etc. (I’m not an economist so this stuff is still kind of beyond me), but crypto and NFTs are exactly what that phrase describes. A lot of people jumping into investments as a get-rich-quick scheme, which gives me a very 1920’s vibe.



Musk’s main talent is as a business promoter; not as an entrepreneur, engineer, coder, innovator, visionary, or even as an investor*. He’s operating in the great American tradition of borderline con men like P.T. Barnum and Wilson Mizner, who rely on personal charisma and spectacular stunts to push forward their investments. Such figures always have their true believers.

[* financially speaking, his record there – especially since he forced himself to acquire Twitter – is a wash at best.]


Inheritor of emerald money.


Having heard this reasoning for not abandoning Twitter previously:

Twitter, a platform many of us still use because so many other people use it.

It sure strikes one as an inverse sort of Yogi Berra level of insight

No one goes there nowadays, it’s too crowded.


He might frame that as a “talent”, yes.


What’s happening in car industry it’s conglomeration to get better economies of scale. The main problem with Tesla it’s that is a small fish and sooner or later has to merge with other carmakers.
Carmakers that could be interested both on patent and the brand, of course, but not having a weird CEO for the brand.

Besides Fiat/FCA/Stellantis has already a really weird spokeperson available :wink:


Well, you didn’t manage to get born into the right family, and then to lead such an unexamined life that you don’t really think about where your money came from and just believe that you’re a genius!

That’s a lot of work!


Here’s a link to the article on


And as I said, there’s a parallel here with Bitcoin. Despite years of effort, nobody has yet managed to find any serious use for cryptocurrency other than money laundering.

Here’s one: cannabis dispensaries can’t use banks because it’s still illegal at a federal level. That leads to dispensaries having large amounts of cash on hand which makes them ripe for frequent robberies. Putting the money into bitcoin alleviates that problem in the short run, but with the disadvantage of the fluctuating value of cryptocurrencies.


Without banks, how do they convert the cash into crypto?


Hydrogen is NOT the future. You either need MORE electricity than batteries would need to MAKE the hydrogen, or you crack natural gas which puts us right back in the same CO2 boat.

And new battery technologies are using less and less rare earth materials , including lithium.(for example, sodium-ion batteries). By the time lithium shortages are a problem, we very likely won’t NEED the lithium part anymore.


also, sex workers-- Visa and Mastercard are too wary of either child porn or sex trafficking or organised prudery

And then, there remains Russian invasion of Ukraine. Surely cryptocurrency might find a usecase in sanctions evasion? (SBF did say that retail investors were the foundation of his magic money box though, so maybe the allure of sanction evasion wouldn’t appeal)


I expected someone would correct me either on hydrogen or economics. I recognize I could be misinformed.

My opinion is based on Iceland’s use of hydro and geothermal to power the electrolysis. But I haven’t crunched the numbers to see how viable that is worldwide.


Iceland is pretty special in many ways but doesn’t scale up well, so to speak.


Previously wasted; soon to be captured instead.

Also, there’s a lot of hydro in BC and Quebec.


isn’t that the definition of money laundering? ( they’re avoiding laws restricting deposits of cannabis money by washing it through bitcoin )


The issue I see with hydrogen for passenger cars is that electric infrastructure is so much easier to decentralize. We are still in the early stages, but a charger in every garage is entirely possible. Hydrogen infrastructure may be fine compared to gas infrastructure, but I just don’t see how it will ever be able to compete with the convenience of the electric alternative.


Tesla, unlike Apple doesn’t have network effects. You can always replace your Tesla with another brand of electric car. Switching from using an iphone to an android (or vice versa) will involve losing some functionality.

In short, electric vehicle production just doesn’t look like a network externality business. Actually, you know what does? Twitter, a platform many of us still use because so many other people use it. But Twitter usage is apparently hard to monetize, not to mention the fact that Musk appears set on finding out just how much degradation of the user experience it will take to break its network externalities and drive away the clientele.


I think we can do better by hiring a pro-wrestling manager/agent.

Paul Bearer Sport GIF by WWE