CodeCon 2021 – I

On September 28, Elon Musk gave an in-depth interview during CodeCon 2021. In the first half hour of the conversation with Kara Swisher, he talks about cryptocurrencies, his view on China, the holy grail of space travel that is reusable rockets, how Starlink is helping pave the way to Mars, and why he’s putting in all this effort in the first place, among other things. This is the transcript of the first half (0:04 – 30:20) of the interview, which lasted just over an hour and was posted on YouTube. The German translation you find here.

Kara Swisher: (0:04) Everyone. We were… Bond is opening today. It’s my favorite movie, so I felt like I had to do something like that. Anyway, how you’re doing?

Elon Musk: Good. How are you?

Kara Swisher: Good. What’s the mood of Elon today?

Elon Musk: The mood?

Kara Swisher: It could be anything.

Elon Musk: I feel good.

Kara Swisher: Do you?

Elon Musk: Yeah.

Kara Swisher: Alright, we have a lot to talk about. Where do you want to start?

Elon Musk: Anywhere you’d like to start.

Kara Swisher: Alright, China, cryptocurrency, what they’re doing?

Elon Musk: That’s my safe word, by the way.

Kara Swisher: Okay. What for doing? Cryptocurrency?

Elon Musk: Yeah, it’ll kill any violators.

Kara Swisher: Cryptocurrency is later for us. Go ahead.

Elon Musk: Cryptocurrency in China?

Kara Swisher: Yes, what they’re doing around bitcoin etc.? And I would like to pivot to what the US is going to do around regulation.

Elon Musk: (0:56) Well, it would appear that they don’t love cryptocurrency. (audience laughs)

Kara Swisher: It appears.

Elon Musk: Yeah, it’s subtle, but hinting in that direction. Yeah, so I can’t speak to exactly why they don’t like it that much. But people can speculate for various reasons. China is having some significant electricity generation issues. So actually, I think part of it may actually be due to electricity shortages in many parts of China. So a lot of south China right now is having random power outages because the power demand is higher than expected. So, crypto mining might be playing a role in that. I’m not sure.

Kara Swisher: This is further than that?

Elon Musk: Yeah, it’s further than that. Well, I suppose cryptocurrency is fundamentally aimed at reducing the power of a centralized government. They don’t like that. That’s my guess.

Kara Swisher: (2:06) Okay. So what do you think is going to happen, because (…)?

Elon Musk: I mean, maybe the audience has otherwise …

Kara Swisher: The shares went up, it didn’t matter after they announced this. They went down, and they went up. You can change the shares of cryptocurrency more than China can.

Elon Musk: Yeah.

Kara Swisher: Is that a good thing?

Elon Musk: Um, if it goes up, I suppose it is. But, I mean, I think there’s an always long-term role for crypto. You know, really, people should think of any kind of money system, whether it’s historic value or currency, as really a form of information. If you apply information theory to money, whether it’s cryptocurrency or some other form, and view it in terms of, you know, how good is it at sort of bandwidth, latency, jitter, dropping packets, which is like… fraud is like losing packets or something on the network – and, you know, it’s overall security – then I think a lot of these things just make a lot of sense in that regard. Like any form of money has no power in and of itself, except as an exchange of value between people for goods or services or to translate things in time, like a loan.

Kara Swisher: (3:36) So is this the right thing for governments to do to take control of it? Is it possible?

Elon Musk: It is not possible to, I think, destroy crypto, but it is possible for governments to slow down its advancement.

Kara Swisher: So what should the US government do? We had Gary Gensler on earlier, the SEC chairman. He was calling it the ‘Wild West of finance’. What should they do, if anything?

Elon Musk: I would say “do nothing.”

Kara Swisher: Okay, they’re not saying that.

Elon Musk: Yeah, I mean, I would seriously just let it apply.

Kara Swisher: Because?

Elon Musk: What do you think government can do?

Kara Swisher: I think they can like ruin it. I don’t think they can just slow it down. I think they can stop it. I don’t think they can control it. And therefore, they may want to stop it.

Elon Musk: (4:31) Yeah, I mean, I wouldn’t say I was some, you know, massive cryptocurrency expert. You know, I think there’s some value to cryptocurrency. I don’t think it’s like the second coming of the Messiah, which some people seem to think. It will hopefully reduce the error and latency in the money system, the legacy money system, and reduce the … You know, governments have a habit of editing the money database, which is like probably some ancient mainframe somewhere in Virginia running COBOL. It’s kind of bleak to think about that. But when governments can’t keep the hand out of the cookie jar and edit the money database, there’s probably some value to that.

Kara Swisher: (5:26) Okay, so you’re saying, You’re not an expert, but you spent a lot of time tweeting about it. Now, you tweet about a lot of things. We’ll get to that in a minute. But why is that of interest to you, crypto, because you become, I wouldn’t say the crypto Messiah but …

Elon Musk: (laughs) Crypto Messiah. Oh, no. But I mean, I mostly don’t tweet about crypto; this is a minority, a small number of tweets. I do know a lot about the money system and payments and how it actually works, as opposed to say how economists think it works. On a practical basis, just how money is… – Money, just basically… the monetary system is a series of heterogeneous databases that are not real-time with the exception of PayPal and a few others, and into reconcile on a batch basis, that may take anywhere from 24 hours to several days. And so just it’s slow. That’s just a lot of latency and jitter. And the ACH (Automated Clearing House) system has basically no security. So this has just been that way when PayPal started in 99. And it’s still that way, 22 years later.

Kara Swisher: So it needs a reform?

Elon Musk: Yeah.

Kara Swisher: So I want to move on to … I want to stick with China for a second. You’re operating there, selling there. What do you make of what they’re doing to the tech entrepreneurs there, the tech moguls?

Elon Musk: (7:11) Well, where’s Jack Ma?

Kara Swisher: Do you know?

Elon Musk: I don’t know

Kara Swisher: You have the means to find out, I guess.

Elon Musk: Maybe. I don’t know. I think there are some changes afoot in China. I think part of this may be actually COVID-related in the sense that it’s been quite difficult to have in-person meetings in China and China really runs… The whole system is set up to run on the basis of in-person meetings. And the absence of these meetings for the past 18 months, I think, has probably lead to things being worse than they would be if there were more in-person meetings. So I think as COVID lifts and the in-person meetings return, probably there will be an increase in the sort of trust level, and things will probably start heading in a more positive direction.

Kara Swisher: Trust level between tech and the government?

Elon Musk: Yeah, both internally within China and with respect to people from the US and other countries going and visiting and meeting with officials in the Chinese government, China is very much set up to work with the in-person meetings. And so, COVID, I think, it’s impeded that. So things will improve most likely, as the in-person meetings should resume.

Kara Swisher: So they did these antitrust actions because they couldn’t say hello.

Elon Musk: Not all of it can be ascribed to that, but some of it can be. Yeah, we’ll see. I suspect things will improve next year because of just better, more interaction.

Kara Swisher: Are you nervous about what you’re doing there. It’s a big market for you. You operate there.

Elon Musk: (9:24) Yeah, we’ve got a big factory in Shanghai, which is doing very well. The Tesla China team is doing great work. And we do well what is selling in the Chinese market as well as producing cars for China and for export to Europe. So overall, things are going pretty well, frankly.

Kara Swisher: You’re not worried about U.S.-China relations?

Elon Musk: No, not especially right now.

Kara Swisher: Especially, all right. Let’s talk about Space. You had a recent Space… you’ve sent up a bunch of civilians into Space. You not send yourself up.

Elon Musk: No, I not send myself up. I suppose I will at some point. But my goal is not to send myself up. My goal is to open up Space for humanity and ultimately set us on a path to becoming a spacefaring civilization and a multi-planet species.

Kara Swisher: Yes. So you don’t want to go up yourself?

Elon Musk: It’s neither here nor there. I will go at some point.

Kara Swisher: What do you think of the other efforts to go suborbital?

Elon Musk: (10:33) Suborbital is a step in the direction of orbits. But just to put things in perspective, you need about 100 times more energy to get to orbit versus sub orbit. And then to get back from orbit, you need to burn off that energy, so you need like heavy-duty heat shield because you’re coming in like a meteor. So like orbit is roughly two orders of magnitude more difficult than sub orbit. But it’s still good to do something in Space.

Kara Swisher: What do you think watching those both Richard Branson and Jeff Bezos doing that?

Elon Musk: I thought it was cool that they’re spending money on the advancement of Space. I think we ultimately want to be… humanity wants to be… should want to be a spacefaring civilization and out there among the stars. And we want… I think we really want, you know… all these things that we see in science fiction movies and books, like, you know – we want those to be like real one day and not always fiction. So I think it’s good that people are spending their money advancing space technology.

Kara Swisher: (11:52) So last time we talked, we didn’t talk a lot about Space. We talked about meat flaps, which was Elon’s word for speaking. We’re flapping our meat.

Elon Musk: Yeah. Slow tonal wheezing.

Kara Swisher: Yes, that’s right when I sound like it right now.

Elon Musk: That’s what we sound like to a computer – like whale sound slowed down.

Kara Swisher: So, we didn’t talk about Space. So let’s talk a little bit about where do you think you’ve enhanced with what you’re doing? Because I think you’re probably the most fast forward of all these efforts.

Elon Musk: So, with respect to SpaceX… let’s see. I mean, there is two… besides overall human spaceflight and providing transport for NASA of astronauts and cargo to and from the Space Station, which we’ve been doing for a while now, over a decade, we have Starlink, which is a global Internet system. And this is, I think, going to have some profound positive effects on the world because Starlink is really designed to serve the least served.

Kara Swisher: You have 1,300 satellites up right now. Is that correct?

Elon Musk: 1,500.

Kara Swisher: And you want to put 30,000?

Elon Musk: Yeah.

Kara Swisher: We’ll get to space pollution in a minute. But explain the reasons for it.

Elon Musk: In order to provide high bandwidth, low latency connectivity to a large number of people, you need a lot of satellites. And they need to be at low Earth orbit so that latency is low. The problem with satellites that are at geostationary orbit is that they are in around 36,000 kilometers, whereas we are at 550 kilometers. So gigantic difference in latency. For the Starlink system, you could play like a competitive video game that’s latency-dependent and still be able to play it with Starlink. It’s like browsing a terrestrial system, essentially.

And Starlink is really, just to be clear, not a threat to 5G or terrestrial fiber or anything like that. But it’s very well suited to low to medium density regions of the Earth, places where it is too expensive to trench fiber or put cells, you know, 5G cellular base stations. And so it kind of takes care of the people that just didn’t get internet or… either the internet is too slow or too expensive, or they just don’t have it at all. It’s very well suited as a space-based system for serving like the least served, maybe 5% or something like that.

Kara Swisher: (14:45) How big a part of your space business is it from your perspective?

Elon Musk: I mean, I think it’s quite significant in the launch side of things; just launching other people’s satellites and serving the space station probably tops at around, you know, 3 or $4 billion a year of revenue. Whereas if we can get to say 3% of global Internet traffic, and that’s roughly a trillion dollar a year business, then we can increase our revenue by an order of magnitudes to more like 30 billion or something like that. And then we can use the proceeds from that to develop the rocket technology necessary to get humanity to Mars and to the Moon and elsewhere in the solar system.

So, I think Starlink is good in and of itself, for providing, like said, providing internet access to the least served in the world. It’s a fundamentally good thing in that respect. And also offering a little bit of competition in the cities, although you know Starlink can really maybe serve less than 5% of people in a city. This is because the way the…. the spot beams from Space are very big. So anyway, it’s a very nice compliment and a necessary compliment to 5G and fiber.

And like I said, it’ll provide a revenue stream for us to develop our next-generation rocket, which is Starship. With Starship, we’re trying to achieve the fundamental breakthrough that is the holy grail of rocketry. That is to have a fully reusable orbital rocket. This is extremely fundamental. With Falcon 9, we have a mostly reusable rocket.

Kara Swisher: (16:44) You recently proved it landed, correct?

Elon Musk: We’ve been landing for quite a while now. In fact, a number of our boosters are on their 10th reflight. So we’ve shown that reusing the boost stage can be done and that it is economically sensible to do so.

Kara Swisher: What’s the difference in price?

Elon Musk: Between our Falcon 9 and competitors?

Kara Swisher: Using a reusable rocket.

Elon Musk: Yeah, sure. It’s really gigantic. With Falcon 9, we still have to lose the upper stage. And you can think of each stage being like the equivalent of a jet airplane. So the boost stage is like the big jet airplane, the upper stage is the small jet airplane. We still throw away the small jet airplane every time. So Falcon 9 is able to be the most competitive rocket in the world because we recover the boost stage and the fairing. But still, our best-case marginal cost of launch, not taking into account overhead allocation, is about $15 million.

Kara Swisher: Per launch?

Elon Musk: Yeah, for 15 tons to orbit. Which is quite big. SpaceX – over the last year or so – has delivered about, I think, roughly two-thirds of all payloads to orbit of Earth. And most of the remaining third is China, and then everyone else is kind of miscellaneous. But it’s still $15 million, most because…

Kara Swisher: (18:24) What’s the cost differential between that and what you’re aiming for?

Elon Musk: Basically, Falcon 9 is effectively about half to a third of the cost of alternatives because of the reuse of the boost stage. With Starship, we should be able to get to the point where it’s maybe 1% the cost of an expandable system.

Kara Swisher: So that would just be a million bucks, right?

Elon Musk: Yeah, the marginal cost of launch we think can be done…. could be potentially under a million dollars for over 100 tons to orbit.

Kara Swisher: 100 more though than 15 – you said 15.

Elon Musk: Yes. 100 tons likely, and with refinements of the design, probably 150 tons. So essentially, it will be 10 times the payload of Falcon 9 for 15 times lower cost.

Kara Swisher: When is this happening?

Elon Musk: 100-fold better, you know, it’s really profound. Essentially with Starship, it is possible to make the economics close for creating a self-sustaining city on Mars and a base on the Moon for those who want to go there. And so it is really very, very profound development. And that’s what I’m spending most of my time on is driving the development of Starship.

Kara Swisher: Starship, so you can go to Mars. Or do you want civilization on Mars?

Elon Musk: Civilization on Mars.

Kara Swisher: So what’s first? That Moonbase or…? Moonbase first, correct?

Elon Musk: I mean, the Moon is close, so we might as well.

Kara Swisher: Okay. Might as well.

Elon Musk: It’s practically right there, you know.

Kara Swisher: You got a contract with the Defense Department to do a lunar lander from NASA, which has been disputed by Jeff Bezos?

Elon Musk: Yes.

Kara Swisher: How do you feel about that?

Elon Musk: (20:35) Well, I think I’ve expressed my thoughts on that front. I think he should put more energy into getting to orbit than lawsuits. You cannot sue your way to the Moon, no matter how good your lawyers are.

Kara Swisher: Yeah. So why is he doing that?

Elon Musk: I don’t know.

Kara Swisher: You also like to make fun of his rocket. You all make fun of each other’s rockets.

Elon Musk: I mean, I think it does have… I mean, it could be a different shape, potentially, you know.

Kara Swisher: Could you explain from a technological point of view why it’s a bad shape?

Elon Musk: (21:28) Well, if you are only going to be doing suborbital, then your rocket can be sort of shorter.

Kara Swisher: So have you called him and said “Cut this shit. Get bigger – why?”

Elon Musk: I have encouraged him to emphasize getting to orbit. Yeah.

Kara Swisher: Did you talk to him?

Elon Musk: Um, not verbally.

Kara Swisher: What is it, (…)?

Elon Musk: No, just a…you know…

Kara Swisher: …tweet at him.

Elon Musk: Sub tweeted.

Kara Swisher: So what are you going to do with the lunar lander? And how do you get the Moonbase there?

Elon Musk: Starship is designed essentially as general-purpose transport system to anywhere in the solar system because it is a propulsive lander. And with a propulsive lander, you can land anywhere that’s got a solid surface. And it’s also designed for orbital refilling. So, you can get the Starship to orbit and then send tanker flights to refill it so that it has tremendous delta velocity, basically. It can go very far from Earth’s orbit because you can refill propellant.

Kara Swisher: The Moonbase is important because…?

Elon Musk: Well, I think that the Moonbase… I mean, certainly there is like a lot we could learn scientifically, if we had a proper laboratory on the Moon – about the nature of the universe, you know, where we all came from, and the early history of Earth, and that kind of thing. I mean, we have a science station in Antarctica. And we’re still learning a lot from our activities in Antarctica, and I think we could learn even more on the Moon.

So, there’s a lot of value, I think, to having a… I think it would be just fricking cool. I mean, come on, it’s like, you know, humanity, let’s go to represent here for humanity, let’s have a base on the Moon. I think it would be like, “We got a base on the Moon. That’s cool.” I think like, a lot can be learned if you’ve got us sort of a science station on the Moon like we’ve got a science station in Antarctica and many other places.

And I think there is value; that it shouldn’t be denigrated for people who want to experience going to orbit or going to the Moon, and when they do so, I think, to some degree, vicariously, we all go with them. You know, in Apollo program, when they landed on the Moon, yeah, it was just a handful of individuals on the Moon, but we all went with them vicariously. Humanity went with them. Like if you asked Peter to Paul of people on Earth and said, “Tell me, what do you think is humanity’s greatest achievement of maybe ever?” was like, “Landing on the Moon”, you know. And that’s inspiring, I think, to kids everywhere.

Kara Swisher: (24:50) So you just brought that up for civilians. Is that Space tourism you’re doing? And by the way, you have to be kind of rich to do it. Like, from what I understand, I cannot afford to go to the Moon.

Elon Musk: I think it’s got a bit more gravitas then – you know, metaphorically, figuratively, and literally – more gravitas than simply tourism. It’s not like going to Disneyland. It’s more profound than that. Sometimes people use ‘tourism’ in a sort of a negative way. But I think, you know, especially with the ‘Inspiration’ flight, they really…. I mean, they, you know, they filmed the whole thing in real-time, they shared their experiences with the world, they’re a really cool group of people.

I recommend watching the Netflix show ‘Countdown’. It’s awesome. I don’t have anything to do with it. And the production value on the Netflix Countdown documentary is amazing. And you learn about the backstory of the people. It’s actually super…

Kara Swisher: (…26:03) tourism, you know, like, is this for science and for saving humanity, presumably?

Elon Musk: I think that there’s an element of tourism to it, but I think there’s also, you know…. the technology is expensive at first. You can’t just… when you try to develop brand new technology, it doesn’t instantly become cheap and affordable. Think of like cell phones. The early cell phones were really expensive at sucked, frankly. Like in Wall Street 1 where, you know, he’s walking down the beach with a shoe box size cell phone … and so just like really expensive, and the tech was not great. But if some number of people didn’t pay for the expensive cell phones, there would not be the inexpensive cell phones that everyone can afford.

Kara Swisher: So thank billionaires for going into Space?

Elon Musk: (26:59) I mean, you know, it doesn’t have to be the top of your thank-you list. But I mean, it’s not… I’m just saying that when there’s new technology, it is necessarily expensive until you can refine the design, and you can scale things up, and then you can make it more affordable. It is a common misconception that there’s some new technology, especially if it’s a physical object, that you can just suddenly make it cheap and available. You have to have many design iterations, and you got to scale up the production and get economies of scale.

Like we had this argument against Tesla for a long time because people would say, like, “Well, why are you building this Tesla Roadster?” back in the day. “It’s basically…, you know, it’s an expensive toy sports car for rich people.” We’re like, “Yes, it is.” But there’s no way we could build an affordable electric car as our first car. And, you know, we just didn’t have the capital, we didn’t have the experience, and we needed to go through several technology iterations in order to get to something like the Model 3.

And I actually wrote a blog about this because I knew people would be like, why are you making sports cars for rich people? As though we thought there was somehow a shortage of sports cars for rich people. I mean, obviously not, but you just got to figure out the technology, you got to go through multiple design, like, how do you make something mass market and affordable? Many, many design iterations, many different versions of the technology, a lot of hard work, and then you’ve got to scale up the production rate, so you get economies of scale. And those two things are what make any given technology available to the public. And basically, every technology that we take for granted today has gone through that evolution.

Kara Swisher: (28:49) So, getting to Mars will be affordable someday?

Elon Musk: Yes, absolutely. It has to be. In order for Mars to be a self-sustaining civilization, it has to be affordable. Enough people need to go, you know.

Kara Swisher: Why do you want people to go? When you just keep saying that – because you’re worried about this planet? Or are you just betting the odds are, we’ll either blow it up or (…20:08). It’ll be the ‘Day after Tomorrow’ movie.

Elon Musk: It’s really, you know, if we just step away from our sort of internecine squabbles and say, let’s look at the big picture here. What sort of actions can we take that maximize the probability that the future is going to be good for civilization and consciousness? And I think we should regard consciousness on Earth as delicate, you know, just fragile. And, you know, what sort of actions can we do to ensure that it continues and that the scope and scale of consciousness expands.

I’m in favor of expansion because, like, you know, if we want to understand what the universe is about and what’s the meaning of life, we need to get out there and find out. And the more we expand the scope and scale of consciousness, the better we will be able to understand what questions to ask about the answer that is the universe. (30:20)

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