Elon Musk: Bitcoin Will Be Used For Illegal Transactions

Elon Musk, the man behind future tech giants Tesla Motors and SpaceX, has offered his thoughts on Bitcoin, the world's largest cryptocurrency.

In an extensive interview at Vanity Fair's New Establishment Summit, Musk was asked by Aspen Institute's Walter Isaacson if he thought Bitcoin would be disruptive to conventional currency.

He responded: "I think Bitcoin is probably a good thing. I think it's primarily going to be a means of doing illegal transactions.

"But that's not necessarily entirely bad. You know, some things maybe shouldn't be illegal."

Musk, who admitted he doesn't own any Bitcoin, said he sees the cryptocurrency as a necessary bridge between legal and illegal transaction.

He said: "It will be useful for legal and illegal transactions. Otherwise it would have no value as a use for illegal transactions. Because you have to have a legal to illegal bridge."

Elon Musk speaks about PayPal and Bitcoin at around minute 31

Several Reddit users were disappointed that Musk, often revered as a visionary, downplayed the legitimacy of Bitcoin, instead focusing on Silk Road and other illegal incidents involving the digital currency.

But one commenter, giulioprisco, stressed that people should not overlook Musk's insight: "Musk's observation is worth listening to. Some things shouldn't be illegal. Laws are a product of their times and evolve with time.

"All serious politicians and lawmakers know, though they seldom mention it in public, that some degree of creative experimentation outside of the laws, and even against the laws, must be tolerated to permit the evolution of the laws themselves and society as a whole."

"In other words, society needs bridges between legal and illegal."

Elon Musk, who made millions in the online economy, as an early investor of PayPal, also explained how he believes his company missed an opportunity by not developing into a full-service financial institution.

He said: "PayPal hasn't moved much from when it was first bought by eBay.

"The long term vision I had for PayPal was to convert the financial system from a series of heterogenous insecure databases to one datebase - maybe there'd be a few more.

"Money is just a number in a database, it's primarily a information mechanism for labour allocation.

"The current databases are not very efficient. They're these old legacy mainframes, have poor security, and do bash processing once a day.

"I'd convert it into a full-service financial institution. You want to have all financial services a person needs in one place, seamlessly integrated and easy to use and really care about the consumer."

He added that he thought it eBay's decision to spin-off PayPal is "probably the right move."

There are plans for PayPal to integrate Bitcoin.