Bitcoiners roast Elon Musk’s new ‘Bitcoin-style’ XChat

Bitcoiners roast Elon Musk’s new ‘Bitcoin-style’ XChat originally appeared on TheStreet.

Elon Musk wants X to become the most secure communication platform on the planet. But his latest branding choice has left the crypto world confused, and a little amused.

On June 1, Musk announced XChat, a new feature for X (formerly Twitter) that includes encrypted messaging, vanishing messages, file sharing, and audio/video calling — all without needing a phone number. The architecture is reportedly built on Rust, and as Musk described it, uses “Bitcoin-style encryption.”

That phrasing triggered an instant response from Bitcoin experts.

“Brother w*f is bitcoin style encryption, bitcoin literally doesn’t have any encryption in it whatsoever,” wrote Taproot Wizards contributor Udi Wertheimer, whose tweet quickly racked up over half a million views.

So... does Bitcoin actually use encryption?

Short answer. Not in the way you think.

Despite being one of the most secure financial systems ever created, Bitcoin does not use encryption to keep data private. Instead, it relies on cryptographic hashing and digital signatures, both critical tools in cryptography, but not encryption. Hashing (like SHA-256) is used to generate unique fingerprints of data, crucial for mining and verifying transactions. Digital signatures (using ECDSA or Schnorr) ensure that only someone with the correct private key can authorize a transaction.

As Wertheimer explained, encryption is when you take a message and keep it secret from everyone but the intended recipient. Bitcoin doesn’t hide anything. Every transaction is open, auditable, and publicly visible on the blockchain — that’s part of its entire design.

“Seriously, what is Bitcoin-style encryption?” asked cryptographer and assistant professor Ian Miers. “Bitcoin primarily uses signatures, not encryption. This is like saying, we decided to run our rocket on water, since NASA uses hydrogen and oxygen.”

But wait — what about BIP-324?

Some users pointed out that Bitcoin Core implemented BIP-324, a proposal to encrypt peer-to-peer (P2P) network messages, in 2023. That means nodes talking to each other on the Bitcoin network can now encrypt their communication — but this is not the same as encrypting transactions or wallets.

Story ContinuesSo while there’s some encryption involved at the networking layer, it’s misleading to suggest that Bitcoin’s core value proposition revolves around encryption.

Even Wertheimer admitted he may have jumped the gun: “I might have to stop tweeting about bitcoin forever… turns out they do have some encryption in Bitcoin Core for the P2P protocol since 2023. Elon knows more about Bitcoin than I do. It’s over, bye.”

So what did Elon really mean?

Musk was probably referring to end-to-end encryption and threw in “Bitcoin-style” as shorthand for peer-to-peer privacy and decentralization — even if the terminology isn’t accurate.

As crypto OG Wei Dai speculated: “'Bitcoin-style' ~= 'peer-to-peer' ~= 'end-to-end'... So 'Bitcoin style encryption' means 'end-to-end encryption'.”

Musk’s XChat may very well offer a solid privacy layer for communications. But if you're calling it "Bitcoin-style encryption," be ready for pushback — because in Bitcoin, transparency is the feature, not the bug.

And if you’re going to cite the world's most open protocol, maybe… read the whitepaper first.

TheStreet Roundtable reached out to X for clarification on what Musk meant by “Bitcoin-style encryption.” This story will be updated if and when the company responds.

Bitcoiners roast Elon Musk’s new ‘Bitcoin-style’ XChat first appeared on TheStreet on Jun 2, 2025

This story was originally reported by TheStreet on Jun 2, 2025, where it first appeared.

View Comments