Bitcoin is the energy minimal system for a planetary civilization, ending the climate destruction the US dollar has imposed.
Landaeur's Principle and the Thermodynamics of Sound Money and Life Itself
Sidenote: this isn’t edited because I’m lazy and not many people are subscribed. I either am onto something valuable enough or I’m not. Editing is for people whose ideas have slim margins, so to speak — or for those with large audiences. If 10,000 people see this maybe I’ll start editing… I told my CEO once that I was submitting a proposal to the NSF for a quarter million dollar contract, that I had started writing a few weeks ago (including getting a support letter from one of top 5 A&D primes), and that I hadn’t even read the proposal. He told the team there was a 0% chance we’d be awarded based on this data. He was wrong. I rest my case. And none of you are even offering me a quarter million of “free” money for this so there’s also that.
I also didn’t add any charts, though they would be quite useful. Running the numbers is left as an exercise for the reader who is sincere, and to avoid prescribing excessively to the reader who may be insincere. The visual cortex simply carries too much power.
Though there have been various articles written covering bitcoin mining, none is sufficient to satisfy critics -- and why should they be satisfied? -- any argument that is based upon the social or other good done by bitcoin making it "worth the cost" presupposes that bitcoin is great for the world and we know that there is no shortage of people who do not believe this to be the case. Such an article then has two things to prove, and of course fails to do so since if it were so simple to convince people of the greatness of bitcoin, it would already be the world reserve currency and there would be no need for further discussion at this level.
Bitcoiners can write as much as they want about how mining trends primarily toward renewables, capturing mi-day power spikes that make solar energy more viable, the use of stranded energy, such as flared natural gas that is otherwise wasted, and the general trend of mining to drive forward energy technology as miners attempt to find the lowest cost sources of power, but this does nothing to convince someone who is under the impression that an alternative exists that uses basically zero energy, and who does not agree on how the other 2nd order externalities of Bitcoin compare to the 2nd order externalities of the current fiat monetary system. Not to mention, a critic could speculate that decentralized theft of energy at scale as the true ``lowest cost'' form of energy from the consumer's perspective could win out against renewables for mining.
Moreover, if bitcoin mining is to be so impactful that it is going to lead the charge toward renewable energy as many have suggested, it could only do so if it were to consume an inordinate amount of energy representing a substantial percentage of global energy consumption as many fear. For those expecting a transition to renewables regardless, bitcoin mining would then appear as something that would delay the ability to deliver more renewable energy for all the non-bitcoin-mining purposes. If the amount of energy consumed were fairly small, the mining industry would have a fairly small impact on the energy industry (despite its impact being amplified since bitcoin can be mined anywhere). So which is it? It is of course intellectually dishonest for a critic to attack Bitcoin specifically due to a flaw in the reasoning provided by an individual as if the words of any pro-Bitcoin person were perfectly coupled to the thing itself, but so we do not put the onus on the critic to understand our flaws and correct them for us, we must provide the most irrefutable arguments, and present them in the smallest form possible, just as Bitcoin was designed to do few things for optimal security.
Any time a discussion involves data, it is likely in the realm of applied sciences, and there will be great disagreement as to how the data should be interpreted. It is much harder to be intellectually dishonest when faced with math and physics. Fortunately, there is fundamental physics underpinning life under Bitcoin from which we can prove that Bitcoin itself (not bitcoin mining, though mining is required) is the energy minimal system for all things in the world, beating the US dollar, altcoins, and all possible monetary systems other than Bitcoin. From this kernel, the higher order effects that are valuable to the world are many, but we cannot start with claims that the effects will occur and that therefore the kernel must exist, even when well-reasoned and intuitive.
Energy and Civilization
Before we can understand how Bitcoin interacts with energy, we must first be aware of the role of energy in civilization. As Vaclav Smil has explained in his books, the growth of civilization is tied to the base layer energy capacity. This concept is also understood more abstractly at a higher level through the Kardashev scale where a type I civilization is that which has a base layer energy capacity equivalent to the amount of energy in the sunlight incident upon their planet. The energy role in some items is more intuitive, such as our transporation systems and electronics where we can see the direct consumption of electricity, but there is an entire other category of energy that goes into the industrial production of everything around us. Every object is comprised of materials with costs that ulimately tie back to their energy cost. Commoditization is the process by which the cost of a good or service approaches the raw cost of its energy inputs.
When considering how the available goods and services that the world produces can grow, there is another factor in addition to the raw energy, which is tied to how efficiently we are able to use that energy. For a simple example, consider steel: the term bessemer process is likely familiar to many and was the primary process used at the turn of the 20th century, enabling massive growth in infrastructure through railroads, locomotives, skyscrapers, and cargo ships. But today the bessemer process is fallen out of use in favor of basic oxygen steelmaking, which is able to generate the same amount of steel with less energy. With the lower energy costs, the price of steel can decrease, allowing for an increase in its consumption -- it turns out that this ability to have a good or service reach more people ends up being a larger multiplier than the energy decrease multiplier, resulting in greater total energy consumption. This is known as Jevon's paradox and it is the foundational mechanism by which civilization grows.
Technology and Life as Negentropy
Technologies and businesses, through human ingenuity from time spent thinking about the nature of the world, are those things which allow for a useful good or service to be provided with a lower energy input. This is the only sound business or technology since there is nothing that does not ultimately tie back to energy. There are businesses that might appear to not directly relate to manipulating energy, but this is merely because technologies are heirarchical, with many layers, such that one can operate removed from the baselayer energy (as an aside, bitcoin mining, as a business where the final good comes directly from the energy helps us understand what sound businesses looks like). Even something that appears completely removed from the physical world ties back to energy -- consider a social media software company -- they provide a service that seeks to enhance the connectivity and efficiency of the machines known as humans. That's right, the humans are themselves one of these `heat engine' technologies and our information technologies increase the multiplier in utility we can provide to the energy-based systems that more legibly connect to the physical world.
Now we are starting to get an understanding of the nature of life, which Shrodinger already explained to us. Life is a negative entropy (negentropy) system. This consumption of energy that increases over time is used to decrease entropy locally in ways that we find useful (that is, things that allow us to continue this decrementing of entropy at ever greater scale), and expel the entropy (usually heat) generated in that process somewhere else. Bitcoin critics are concerned about this heat that is being generated, but we must focus on the root of the issue, which is what to do about this heat if we are operating under the assumption that we will not be able to dump the heat off of the Earth into the surrounding space, which is extremely cold and at no risk of itself overheating while planets still exist.
There are in general two schools of thought when it comes to addressing this. The first is that we need energy technologies whose externalities are bounded such that in spit of Jevons paradox leading to ever more consumption of energy, the externalities themselves do not grow indefinitely. As we are pulled to ever more energy-efficient technologies in all areas of life, we get closer to this state, which some anticipate to be enabled by renewables while other anticipate it is enabled by nuclear fission. The other school of thought is that large scale organized crime associations should violently enforce a curtailment of energy access, primarily in developing nations, sometimes teetering on the notion of mass suicides for the ``greater good''. Though the 2nd school of thought has become the predominant one among `elites', we must do more to recognize what it is and speak out against these crimes against humanity. As we should now understand, energy is intextricable linked to meaning of life itself as best as we know so impeding energy access to the poorest of society goes beyond a crime against humanity to reach the purest form of evil itself, since what is evil other than action which destroys life and useful energy?
Regardless, let's get back to the first school of thought, within which we must ask, is there anything that is absolutely certain to maximally push us in the direction of externality convergence so that we may reach it before we reach a point of no return,a great filter, if you will?
Money is Information that Clocks Energy
A question that is not asked with sufficient frequency is "what is money?" Money is the mechanism by which we coordinate the actions of all the different human machines that act to decrease the energy costs in all things. As human machines do work in pursuit of energy extraction in ever more efficient and clever ways, they acquire information about the state and properties of various other machines. People notice that money allows for acquisition of any goods in services so they mistakenly believe that the wealth of all goods and services somehow resides in the money, whereas the reality is that the value is purely in the world, and the money merely maps to it. The Keyensian view that changing the map grows the energy of the world is equivalent to claiming perpetual motion machines are real. Growth can only arise through time, which leads to energy efficiency in some activity, which grows the energy consumption.
Mumford Lewis argued that it was the timekeeping clock that spurred the industrial revolution rather than any particular machine such as the steam engine, and a clock that measures energy is the missing piece to sound passage in space-time.
the clock is not merely a means of keeping track of the hours, but of synchronizing the actions of men... the clock has been the foremost machine in the modern technics: and at each period it has remaind in the lead
This is nothing more than thermodynamics so we do not need to get into the higher order details to understand fundamental mechanisms. Sound money has no intrinsic value because it is a form of information to perfectly map to the value of the world, and attempts to connect the value of money to an object or set of machines that have useful value due to their connection to the finiteness of energy would be ineffective because this would be sort of a self-referential system, which is illogical (note, the value of bitcoin does not arise due its energetic formation).
An individual's monetary holdings represent the irreversible thermodynamic history of their interactions with other machines and technologies. As they increase the energy available to the world, they are able to capture the surplus, but it is thermodynamically impossible for someone to extract wealth/energy from others without criminal theft so those that cause a loss in energy, themselves bear a loss, and a record of this is stored in the monetary information they contain.
Fiat Effects Planetary Destruction
Suppose you think the information an individual holds is flawed -- then you might enact a fiat monetary system that allows devaluation of a person's money, seizing the information within people's minds. The problem with this is that in order to generate this printed money, this theft comes with a deletion of information, and by Landauer's principle, deletion of information must result in an increase in entropy. The mechanism for this entropy is tied to the inability for useful work to be performed, which resonates with the understanding that an individual who has their wealth seized is rendered impotent. ``Cryptocurrencies'' such as Dogecoin or Ethereum and other fiat currencies such as the the US dollar enable this information deletion, which increases the entropy in the world, wasting energy and impeding the growth of civilization as we attempt to approach a convergence of the externalities of life. This is the foundational source of energy wasting and it rapidly spirals out of control as we have seen since the efforts of humanity become entirely decoupled from the energy, enabling the possibility of obtaining monetary wealth without an increase in useful energy in the world, but still wastefully increasing entropy.
This disconnection from energy will destroy the Earth if it is left unchecked, and only a finite supply of money can preserve the information needed to minimize entropy. As we know, any centralized fiat money such as altcoins and government currencies fail to maintain a fixed supply because the temptation to destroy information to sieze control of the minds of a populace is far too great to be resisted, and no entity can be trusted with the control of money. It is only possible to maintain a fixed supply of money that functions as a transactional currency by ensuring there cannot be a double-spend, which can only be achieved with proof-of-work, which is lowest energy way to achieve this state. Bitcoin mining does not require an arbitrary increase in mining energy since the difficulty adjustment makes it so the same number of transactions are processed per second with any energy level, such that the minimal amount of energy is used. Since Landauer's principle tells us we must preserve information to minimize entropic waste heat, Bitcoin proper is the energy minimal system under which a planetary civilization operates, and the only technology that can stop the impending destruction that awaits any civilization that fails to escape their fiat standard.
The science denial is inhumane
Thermodynamic physics is just about the hardest science we have and its denial is the most immoral, unethical activity anyone can engage in. Fiat will not only destroy the climate if left unchecked, it is a violation of our most fundamental human rights. The beta version of slavery involved physical enslavement, but this posed scaling limitations and revolt. What fiat enables, through deletion of a person's private information from their own mind represents is an enslavement of the human mind, beyond the effective seizure of their time that coincides. This is the true thought-policing and it is inescapable under fiat. These crimes are thoroughly unconstitutional and those who have supported fiat, whether directly or passively, will be viewed with utter disgust from future generations that will all understand these facts. And these facts will be known, and they will prevail because they are grounded in physics. Bitcoin now is, and that is enough -- just like no coalition of organizations can defy the laws of physics and impose low-gravity zones for flight paths that lower aviation costs, no one can stop the thermodynamic inevitability of Bitcoin becoming the only global store of value. Now is the time to choose whether you want to believe the scientific facts, or have fun irreversibly destroying your legacy.
EDIT: While this post provides the mathematical foundations for why perfect money is the energy minimal solution to life, it was a bit weak on explaining why there cannot be a more efficient perfect money, and that can be shown by the fact that Bitcoin has perfect* efficiency (*as perfect as SHA-256 is random).
Appendix / About
For those who don’t know me, I started out as a regular human attempting to reduce the energy cost of something, which was working out fairly well -- as one of the founders in Mantis Composites, I helped develop the strongest materials in the universe, which will massively reduce the cost of getting and operating airborne machines and spacecraft. I just thought materials engineering was neat since materials play such a fundamental role in the world. We did not set out to achieve such a substantial technological jump, or one that ties to energy in such a legible and obvious way, but it ended up being quite useful since it led me to an even greater truth, the truth of Bitcoin. Most businesses, especially most businesses that grow to a substantial size, are only able to do so by manipulating energy in a roundabout way because it is harder to make a large jump close to the baselayer, and no one is expecting it. Regardless, we went out to finance our `technological revolution' so we could inform other humans that this was the thing that humans wanted to do to propel the species forward -- interestingly enough, they botched this.
At first I thought I was making some error and kept trying to prove I was wrong by iterating in such a way that would prove I was previously making an error, but eventually I had done a search with sufficient breadth and depth. I realized it was a case of Wittgenstein's ruler -- not a single investor was sincerely evaluating us (as we know, in fiat, there is nothing that forces people to settle to the physical nature of reality), but I was (unwittingly, at first) evaluating them. As I kept pulling the thread, and gained more and more conversations, I was forced to accept the unfortunate truth that venture capitalists and investors in VC funds are almost entirely fucking idiots -- if you want a nicer phrasing for it, they are NPCs optimizing for a local game that is untethered to reality.
In the past couple years since leaving Mantis Composites (which is still growing slowly with DoD funding since they have a sincere anchor to physical reality, negative externalities and inefficiencies aside) given my limited ability to provide substantial value outside of a fat domain with enough Gibbs free energy to wrangle, I have worked on a number of different projects, partially with the idea of trying to build a startup that could rapidly grow prior to hyperbitcoinization (getting into bitcoin as a cash-poor college-dropout founder, I was only able to stack so much). What happened instead was I discovered the fiat world was even more foolish than I could possibly imagine, and though I built products customers absolutely loved, the initial growth was slow and I could see that the efficiency with which it could grow was rather askew. A true understanding of Bitcoin is rather painful since it more or less coincides with an understanding of this systemic idiocy -- this is the mass entropy from the growing information deletion that is ravaging the planet. So the only thing worth pursuing now is the acceleration of Bitcoin. I could certainly acquire more bitcoin if I focused purely on immediate revenue (a temporary distortion in optimal time preference), however, I now know this is folly, for even the ``tiny'' amount of bitcoin I own will have more than enough value after hyperbitcoinization for wealth from a personal consumption perspective (I like rock climbing, mountain biking, and skiing so my costs are not that high anyway). Instead, I will simply pursue a deeper understanding of the truths that matter the most, without allowing myself to become distracted by trivial concerns. For Bitcoin's thermodynamic perfection means that the necessary capital to achieve the most useful things in the world will move through the people that provide the greatest value, and I know the value I provide. The bitcoin I could accumulate playing short term gains pales in comparison to what I can achieve by gaining a Schelling point status. At some point, the trillionaires of the world will decide they would rather build so they may live in a greater world, than live in fear that they will cease being king over nothing.
Hence, I will be putting together some guiding measures tying back to reality and calling it the Build Clock. It will include both baselayer energy metrics, and rigorous higher level metrics based around the global supply of various goods and services that inform us of the true capacity of our planet, which is currently rather pathetic.
Excellent writing sir, it was indeed a pleasure! I for one, happen to of the same accord. I'd rather spend my time enjoying the things I love, and spreading the gospel than fighting in the shitcoin casino that is both crypto and fiat alike. In the end, if I can provide value in an honest to God manner, I will forever be content.
I always thought the only true "currency" should be a measure of anti-hydrogen. This was the purest form of energy (with limited externality) that I could imagine. Oh ... and welcome to the other side of the looking glass!