The key is to monetize location independent cheap renewable energy. We have abundant sources but they are not co-located with population centers (that mostly formed around sea ports before the electric age).
Bitcoin hunts for and monetizes the cheapest most stranded electricity. Expensive urban carbon sources are steadily priced out. Every new renewable plant can co-locate a portable bitcoin miner and pay for itself. The implications are huge. Self bootstrapped renewable cities & business centers. Petrodollars simply cannot compete with this model.
We have carbon coin right now. Currency is rooted in the energy it incentivizes (not what it disincentivzes, ie a tax). Petrodollar -> petroleum, BTC -> location independent cheap energy (ie renewable). Cheap energy incentives are baked into bitcoin's core monetary policy unlike any other currency.
Once bitcoin mining hardware is purchased and set up, it needs to be fed all the time, it isn't turned off at night like a person. Hydro power is a reasonable renewable to pair with miners due to its round the clock nature, but not wind or solar which require daytime sun to function, or a massively expensive energy storage system. Bitcoin miners running their hardware without consideration for climate will outperform the climate friendly miner, that is the incentive problem currently in the way of climate friendy crypto mining.
Bitcoin miners ramp up when electricity is the cheapest and down when there is less or no demand. They are the opposite of data centers which need full uptime. Miners that don't vary according to demand will get priced out by miners that intelligently maximize excess over peak energy.
I see your point, I didn't elucidate mine well. Costs are lower for electricity at night, when there are no renewables on grid. Miners also spent capital to buy the custom ASICs for mining and like all investments, need a return on investment on a timeline, so there is a need to run essentially at every hour off peak.
Hi Michael, thanks for the thoughtful comment. Would you be open to a follow up chat on this? I have some questions and would like to learn from you. I’m @susanfsu on Twitter and we can DM / coordinate from there. Looking forward to it, thank you!
Hi Michael, great point about the co-location of cheap renewables to mining centres. I think a smart miner interested in facilitating transactions or just making money, could also co-locate battery or other storage and design the full system around tracking transaction peaks to maximise the profit of each transaction and minimise the energy cost. Granted not quite as green as sticking to weather peaks, but arbitrage is all about peak shifting in flexible energy markets!
Just a thought - as the world tilts to clean energy, batteries and distributed utility; all of which are tech driven, deflationary & largely US centric - there will need to be new US geo-political intervention to ensure the US$ is kept afloat - especially in the wake of all this QE. Thoughts?
Russia and China are already moving to a gold-backed, central bank digital currency (CBDC) to transact outside of the dollar and skirt US sanctions. The petrodollar’s days - and resulting US military policing of the planet - are numbered.
Keen to hear more about your thoughts on BTC from currency point of view, would you be keen to be a guest speaker some time for a crypto study group? https://discord.gg/7KNfKPfth2
Hi Wizardy, I'm happy to join your study group, though I'm not a professional economist or crypto expert! Will try to figure out how to do so on Discord, thanks for your comment.
The key is to monetize location independent cheap renewable energy. We have abundant sources but they are not co-located with population centers (that mostly formed around sea ports before the electric age).
Bitcoin hunts for and monetizes the cheapest most stranded electricity. Expensive urban carbon sources are steadily priced out. Every new renewable plant can co-locate a portable bitcoin miner and pay for itself. The implications are huge. Self bootstrapped renewable cities & business centers. Petrodollars simply cannot compete with this model.
We have carbon coin right now. Currency is rooted in the energy it incentivizes (not what it disincentivzes, ie a tax). Petrodollar -> petroleum, BTC -> location independent cheap energy (ie renewable). Cheap energy incentives are baked into bitcoin's core monetary policy unlike any other currency.
Once bitcoin mining hardware is purchased and set up, it needs to be fed all the time, it isn't turned off at night like a person. Hydro power is a reasonable renewable to pair with miners due to its round the clock nature, but not wind or solar which require daytime sun to function, or a massively expensive energy storage system. Bitcoin miners running their hardware without consideration for climate will outperform the climate friendly miner, that is the incentive problem currently in the way of climate friendy crypto mining.
Bitcoin miners ramp up when electricity is the cheapest and down when there is less or no demand. They are the opposite of data centers which need full uptime. Miners that don't vary according to demand will get priced out by miners that intelligently maximize excess over peak energy.
I see your point, I didn't elucidate mine well. Costs are lower for electricity at night, when there are no renewables on grid. Miners also spent capital to buy the custom ASICs for mining and like all investments, need a return on investment on a timeline, so there is a need to run essentially at every hour off peak.
Hi Michael, thanks for the thoughtful comment. Would you be open to a follow up chat on this? I have some questions and would like to learn from you. I’m @susanfsu on Twitter and we can DM / coordinate from there. Looking forward to it, thank you!
Hi Michael, great point about the co-location of cheap renewables to mining centres. I think a smart miner interested in facilitating transactions or just making money, could also co-locate battery or other storage and design the full system around tracking transaction peaks to maximise the profit of each transaction and minimise the energy cost. Granted not quite as green as sticking to weather peaks, but arbitrage is all about peak shifting in flexible energy markets!
Absolute master piece. God speed!
Just a thought - as the world tilts to clean energy, batteries and distributed utility; all of which are tech driven, deflationary & largely US centric - there will need to be new US geo-political intervention to ensure the US$ is kept afloat - especially in the wake of all this QE. Thoughts?
Russia and China are already moving to a gold-backed, central bank digital currency (CBDC) to transact outside of the dollar and skirt US sanctions. The petrodollar’s days - and resulting US military policing of the planet - are numbered.
Wow. Just wow
Keen to hear more about your thoughts on BTC from currency point of view, would you be keen to be a guest speaker some time for a crypto study group? https://discord.gg/7KNfKPfth2
Hi Wizardy, I'm happy to join your study group, though I'm not a professional economist or crypto expert! Will try to figure out how to do so on Discord, thanks for your comment.