TLDR
- Elon Musk announced XChat, a new messaging feature for X with encrypted conversations, vanishing messages, and file transfers
- Musk claimed XChat uses “Bitcoin style” encryption built on Rust programming language
- Bitcoin developers and crypto experts criticized the claim, pointing out Bitcoin doesn’t use encryption but cryptographic signatures
- The announcement caused confusion as Bitcoin transactions are signed, not encrypted, and all data between Bitcoin nodes is unencrypted
- Bitcoin’s price remained stable near $105,000 despite the announcement
Elon Musk’s XChat Announcement Faces Crypto Expert Criticism Over Bitcoin Encryption Claims
Elon Musk announced on Sunday that X will launch a new messaging feature called XChat. The feature promises encrypted conversations, vanishing messages, file transfers, and audio and video calls.
All new XChat is rolling out with encryption, vanishing messages and the ability to send any kind of file. Also, audio/video calling.
This is built on Rust with (Bitcoin style) encryption, whole new architecture.
— Elon Musk (@elonmusk) June 1, 2025
Musk described XChat as “built on Rust with Bitcoin style encryption, whole new architecture.” This statement immediately drew criticism from Bitcoin developers and cryptography experts who questioned the technical accuracy of the claim.
Bitcoin Core developer and OCEAN CTO Luke Dashjr responded directly to Musk’s post, stating “Bitcoin doesn’t even use encryption.” JAN3 and Pixelmatic CEO Samson Mow echoed this sentiment, adding “Bitcoin isn’t encrypted.”
Bitcoin doesn't even use encryption..
Also Rust is woke
— Luke Dashjr (@LukeDashjr) June 1, 2025
The confusion stems from how Bitcoin actually works. Bitcoin uses cryptographic techniques such as elliptic curve cryptography and SHA-256 hashing for key generation and transaction validation. These processes involve digital signatures rather than encryption for message confidentiality.
Ian Miers, Assistant Professor of Computer Science at the University of Maryland, explained the distinction on X. He noted that Bitcoin primarily uses signatures, not encryption, comparing Musk’s claim to “saying we decided to run our rocket on water, since NASA uses Hydrogen and Oxygen.”
All data shared between Bitcoin nodes is actually unencrypted, allowing anyone to interact with the network. Bitcoin transactions are signed to prove authenticity but are not encrypted to hide their contents.
Technical Implementation Questions
Developers also questioned the connection to Rust programming language. Eliza Labs founder Shaw Walters pointed out that “Bitcoin was written in cpp,” referring to C++, and that “Rust clients came later.”
Miers raised additional concerns about the security claims. He stated that “Bitcoin style” and “Rust” are not descriptions of an encryption scheme and aren’t strong indicators of security for a messaging app.
The announcement lacks detailed technical documentation from X. Attempts to contact the social media platform for clarification were unsuccessful.
XChat is planned to include end-to-end encryption, disappearing messages, and file sharing capabilities. Users will reportedly be able to send various file types including audio and video without requiring a phone number across all platforms.
Market and Business Context
The XChat announcement comes during a period of activity for Musk’s companies. He recently stepped down from his position at the Department of Government Efficiency, a Trump administration agency focused on reducing federal waste.
X has also soft-launched a digital wallet called “X Money” as part of Musk’s vision to transform X into an all-in-one application. This messaging feature represents another component of that broader strategy.
The announcement followed Musk’s public denial of a reported deal with Telegram. Telegram CEO Pavel Durov had claimed a partnership with Musk’s xAI company worth $300 million, which Musk disputed by stating “No deal has been signed.”
Bitcoin’s market value remained stable near $105,000 following the announcement. The cryptocurrency had dropped over 3% in the previous week but showed no reaction to Musk’s XChat claims.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
