WSJ outlines Elon Musk’s path to blockchainisation of X

Drawing on an excerpt from the forthcoming biography of billionaire Elon Musk, The Wall Street Journal reporters described his deal to buy X (formerly Twitter) and plans for blockchainisation of the social network.

According to the publication, in 2022 Musk’s business was doing well and he recalled his old idea for an “app for everything.” More than 20 years ago, the entrepreneur founded the company X.com with PayPal co-founder Peter Thiel for this purpose.

Musk fought fiercely to keep the short name, but his colleagues were categorically against it.

“If you want to be simply a niche player, PayPal is a decent solution. But if you want to capture the global financial system, the name X is the best,” he insisted.

However his initiative never took off, and decades later the billionaire again tried to bring it to life. Musk advised his personal business manager Jared Birchall to buy Twitter’s shares.

In April 2021, the head of Tesla became the largest shareholder of the social network after acquiring 9.2% of its shares for $2.89 billion.

One night the entrepreneur phoned Parag Agrawal, who had succeeded Jack Dorsey as Twitter’s chief executive. They decided to meet secretly for dinner with the company’s chairman Bret Taylor, WSJ claims.

Then Musk was invited to join the board of directors, and he agreed. At the first meeting, the entrepreneur voiced his thesis that democracy would be better off if Twitter stopped restricting freedom of speech.

He also proposed several ideas, including paid verification and the introduction of a financial ecosystem.

Later his brother Kimbal told him it would be better to launch a new social network based on blockchain. Presumably, for this, the meme cryptocurrency Dogecoin—the development of which, according to the journalists, Musk secretly funded—would be used for this.

After this conversation the billionaire sent Kimbal several messages detailing the idea of a “blockchain social network that makes payments and sends short messages.”

Followed long reflections and a search for investors for buying Twitter.

He found financial backing from Oracle co-founder Larry Ellison. Additionally, Musk discussed raising $5 million with Sam Bankman-Fried, founder of the collapsed exchange FTX.

The latter immediately began proposing the idea of blockchainisation of the platform, but the plan struck the billionaire as “too slow.” The deal ultimately never materialised.

“My BS detector went off like a red warning signal,” Musk noted.

The deal for $44 billion was closed in October 2022. The former CEO Parag Agrawal and its CFO Ned Segal left the headquarters.

The new head of the social network began complaining about the company’s mismanagement and its condition. There followed scandals over layoffs and the introduction of new policies with regard to freedom of speech.

The Twitter rebranding took place on 24 July. Musk changed the social network’s name to “X” and abandoned the iconic blue bird in its logo, opting for a black colour scheme. In the wake of the hype, unknown individuals created a series of themed coins.

On 1 July 2023, Elon Musk introduced “temporary” limits on viewing tweets. According to the billionaire, the decision was related to an “extreme level” of data scraping and system manipulation. He did not specify when the limits would be lifted.

Against this backdrop, lesser-known microblogging apps began to gain traction, and on 4 July it emerged that Meta Platforms planned to launch an alternative to Twitter — Threads app.

Soon Twitter threatened to sue Meta Platforms over this initiative.