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Crypto News Updates

Much Energy, Such Morals; Bitcoin Is Better

The energy debate is misleading, and characterizes energy usage as an objectively measurable undertaking (which is not true).

Bitcoin. Internal combustion engines. Netflix. Norton. Twitter. Facebook. Online banking. ATMs. Security cameras (and their systems). Printers. Lightbulbs. Christmas lights. Easy-Bake Ovens.Tinder.

They all require energy to produce, and all require energy to use. Pick any one from this list, (or anything else not on the list) and I could tell you why you don’t deserve to be able to use it because that energy could be “best used elsewhere.” You can police energy use with LITERALLY EVERYTHING.

We can take it down to the very calories you consume. Would you like to hear the reasons why you can’t eat? Unless you either produce the food yourself, or provide more than enough service to society, to the point where it can be justified that you deserve the food.

I didn’t think so. It’s a fool’s argument. But I’m not done here yet. We’re not done with fools. Let’s shift focus a bit.

Bitcoin is coming under fire — again — for radically uneducated claims that Bitcoin mining is negatively impactful to the environment. Okay, we’ll get to that. But, first… I would like to ask some questions about batteries.

Yes, Batteries

“Why batteries, Mike?” Let’s get into it.

Do you like having a smartphone? How about a laptop, or maybe a tablet? Yes? So you enjoy having battery technology, correct?

Green energy, (aka, renewable energy), has become the latest source of public angst and narrative-corralling. Whether it’s solar, wind or the latest and greatest electric vehicle (EV), they all have one thing in common; they need batteries. BIG batteries. And batteries are only able to function with a very special little mineral, called lithium.

Lithium is important because with it, we can manipulate the exchange of electrons between anode and cathode — allowing us to ultimately provide power to favorite devices, like our cell phones. This technology has allowed for some great advancements in quality of life for many populations the world over. But it’s not without cost.

Hold onto your butts, we’re headed to South America.

Bolivia, Chile, And Argentina — Welcome To The Lithium Triangle.

Where (according to research published by the Institute for Energy Research) 500,000 gallons of water gets used to produce one metric ton of lithium. This is done by pumping this water into the earth, where it picks up the minerals contained beneath the surface and results in a mixture called “brine.” This brine rises to the surface, where it is then left to sit while the water evaporates from the mixture, and the needed minerals are left behind. After a lengthy process of filtering the sediment by further evaporation techniques, over a year passes. According to the IER’s findings, mining operations such as these consumed 65% of the water in the Salar de Atacama region of Chile, an area that is now also struggling with provisioning water for farming and irrigation. These same operations also impacted the drinkable water supply in pretty alarming ways — part of the processing utilizes hydrochloric acid which, as in Tibet, leaks from the previously mentioned evaporation pools and into the local water supply.

“This isn’t a green solution — it’s not a green solution at all.” – Guillermo Gonzalez, 2009 interview regarding the negative impacts of lithium mining.

So, two questions….

How green are these green energy solutions? How do you feel about energy moralization, now?

We’re not done. Put your pants back on, because now we’re headed to Congo.

By Hand

“Why did we come to Africa, Mike? We just flew to South America, we’ve easily traveled 8,000-plus miles. And I wanna relax and take my pants back off.” Hold your horses, I’m all for depantsing, but this is pretty important to our conversation.

Congo has a very interesting mining industry. I say interesting but what I really mean is archaic, dangerous, inhumane, destructive, and frankly, disappointing. Here, communities mine for cobalt. This is done by hand. BY HAND. With a hand and shovel. Not even with hardhats or basic personal protective equipment. These hard-working, proud, strong human beings even take naps deep within the mines while they’re working.

This process supplies 60% of the world’s cobalt demand. SIXTY PERCENT. The majority of the world’s cobalt, which powers the batteries for our high-tech gadgets is provided by local citizens forced to work in conditions which also poison their communities in the process. This creates a negative feedback loop of misery and dysfunction in their lives.*

The reason that the world demands cobalt so vigorously is that it provides structural support during the electron exchange process which occurs within a lithium ion battery. This basically allows for a battery to contain a greater density of power. The more power density within the battery, the more power it can hold, and for longer.

How good for the environment are lithium-ion batteries?

For example, a Tesla Model S requires 12 kilograms (kg) of lithium, per battery. At this rate if we use the numbers from earlier, that means that for every 500,000 gallons of water used (in Chile) per metric ton (or 1,000 kg) of lithium produced we get… 83 Tesla Model Ss.

Tesla produced 54,805 Model Ss in 2020. That means that that 500,000 gallon process was repeated 657.9 times. That’s 328,950,000 gallons of water spent to yield about 660,000 kg of lithium.

(54,805 / 83 = 657.9) | (657.9 x 500,000 = 328.95 million) | (657.9 x 1,000 = 657,900) — by all means, check my math. But I’m pretty sure I’m on track.

This is just for one model of Tesla’s EVs. Now multiply this process out for all of the other EVs coming to market in response to Tesla’s popularity: Cadillac, Ford, GM, Mercedez, and so on. Then multiply it for all of the batteries needed for solar arrays, wind turbines, iPhone 12 Pros, and your Windows Surface.

Are we done with the virtue signaling? Not only are these some grave environmental impacts, but one could also make the claim that a lot of that energy use could be better spent (instead of being used to help build electronics to be purchased by consumers who, more than likely, do not need them).

“But, Mike, Bitcoin mining wastes so much energy. I hardly think this industry is nearly as impactful as those evil Bitcoin miners, that are wasting energy to support a network for magic internet money.”

UGGGGGGGGGGGGGGGHHHHHHHHHHHHHHHHHHHHHHH… okay.

Firstly, the energy that gets utilized by the Bitcoin network is performing many functions -all simultaneously. Let’s list a few:

-Network security (distributed ledger technology)

-Accounting (network confirmations)

-Transaction processing (mining)

-Monetary policy (mining yield)

*While all of this is being done, the network security (because of the distributed ledger technology) also allows for a level of trust that is not quantifiable. Individuals that measure their worth in bitcoin rest easy knowing that their wealth is as equally secured as the billionaires’. Good luck measuring that, or providing the same level of security across all socio-economic status’ without a tiered pricing system. Such would result in the richest gaining the best security, while the poorer receive the lesser quality security.

Luckily for me, ARK Invest has actually produced a beautiful infographic to show just how efficient Bitcoin is versus the legacy banking system.

You’re right, you make a good point. Bitcoin does still use renewable energies, which aren’t great for the environment, as we have established. My point is that Bitcoin doubles-down on the efficiency argument. First, with the efficiencies as stated above, secondly with Nic Carter, who points out in his article, “What Bloomberg Gets Wrong About Bitcoin’s Climate Footprint,” that

“…39% of Bitcoin’s energy outlay derives from renewables, with 76% of miners using renewables in some capacity.”

Bitcoin is wildly more efficient than the current system is, even if we just focus upon the energy expenditure angle. On top of that, the majority of the miners (which have been the target of this latest narrative offensive), are largely powered by the cleaner energy sector. AND, going even deeper, Bitcoin miners are reducing the carbon footprint of current fossil fuels systems at the same time through the capture of fare gas (which is normally just burnt off at zero-profit, because the cost to store and ship the gas costs more than to simply burn it). The fact that all of those processes are occurring simultaneously is a factor of time expenditure that it (Bitcoin) is also streamlining.

I, like the rest of the Bitcoin community, am so exhausted from arguing how beneficial Bitcoin’s monetization of the energy sector is that I would much rather not waste my time. Instead, I would much rather direct you to a few very high quality readings by some much higher quality thinkers than myself.

Follow the list below:

“Uncovering The Hidden Costs of the Petrodollar” by Alex Gladstein

“The Frustrating, Maddening, All-Consuming Bitcoin Energy Debate” by Nic Carter

“PoW Is Efficient” by Dan Held

Bitcoin is bigger, and more important than the mewlings of a billionaire over mechanisms that he clearly hasn’t done his diligence in understanding. Even if he is wildly intelligent, it is implausible for anyone to know absolutely everything. And no, just because he was part of PayPal’s success does not automagically equate to him getting a free pass to claim to understand “money” without getting pushback.

The majority of the population understands that an iPhone works, very few understand “how,” or “why.”

Can We Be Done, Now?

Are we done virtue signaling over energy use? Can we be?

This writing isn’t an attempt to necessarily cast shade on Tesla in particular, it’s to cast shade on the disingenuous energy debate in general. Civilizations develop and ascend as more energy becomes capturable, storable and usable.

Bitcoin is wildly more efficient than the current system. Don’t try to moralize the energy use, you’ll just be made a fool. And a fool on a very, very public stage.

Oh and by the way, we haven’t even gotten into discussing the “carbon credits” market (or “scheme” as I prefer to label it). Renewable Energy Certificates (RECs) are rumored to be a major motivator in Elon Musk’s tweet barrage leading into the weekend of May 16. I invite all of you to look into this aspect of the energy debate, and Alex Gladstein’s writing on the petrodollar is an absolute MUST read.

Bitcoin doesn’t hold grudges. It will be here to protect your purchasing power. It is up to the community to defend the integrity of the system. We check the people/groups that claim to believe they know better.

None of our systems are perfect, yet. Just because they aren’t perfect doesn’t mean we shouldn’t use them at all. What it does mean is that we still have plenty of work to do, and that there’s always room for improvement.

References:

Institute For Energy Research

How Lithium Ion Batteries Work

Tesla Model S Production

Guillermo Gonzalez

ARK Invest:

Dan Held:

Nic Carter

RECS

“The Environmental Impact of Lithium Batteries.” IER, 12 Nov. 2020, www.instituteforenergyresearch.org/renewable/the-environmental-impact-of-lithium-batteries/.

“How Does a Lithium-Ion Battery Work?” Energy.gov, 14 Sept. 2017, www.energy.gov/eere/articles/how-does-lithium-ion-battery-work#:~:text=The%20Basics,vice%20versa%20through%20the%20separator.

“Tesla Q4 2020 Vehicle Production & Deliveries: Tesla Investor Relations.” Tesla, Globe Newswire, 2 Jan. 2021, ir.tesla.com/press-release/tesla-q4-2020-vehicle-production-deliveries.

“This Is Where Your Smartphone Battery Begins.” The Washington Post, WP Company, 30 Sept. 2016, www.washingtonpost.com/graphics/business/batteries/congo-cobalt-mining-for-lithium-ion-battery/.

This is a guest post by Mike Hobart . Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

Source: Bitcoin magazine

Categories
Crypto News Updates

How Bitcoin Changes Our Perception Of Money

The way we traditionally perceive money is, at its root, misguided, as money is what allows humans to experience value.

The Root Of All Evil

For my entire life, to the best of my memory, I can recall one persistent narrative:

“For the love of money is the root of all evil, therefore selfishness must be the seed.” — M. D. Birmingham (which is a take on the quote from 1 Timothy 6:10).

In the most recent decade of my time among the living, I have learned how this belief is wildly misguided. Allow me to defend my reasonings why.

The Ultimate Currency

In the grand scheme of things, money has played a massively important role in the development and progress of history. From the use of seashells as a “money” to the gold coins of Rome or the first fiat currency — the jiaozi of the Song Dynasty in China — to the U.S. dollar today, money has played a pivotal role for humanity.

Photo by Morgan Housel on Unsplash

What money has done, what made it so revolutionary, was that it allowed our species to give physical form to our time and our energy.

Please, take the time to consider that thought.

Time.

The passage of time is one thing that we can never get back. Once it has been spent, there’s no refund. Time is the ultimate currency, forever passing without the ability to return to a prior moment: ever passing, ever spent, ultimately and unequivocally finite.

Whether you go to work every day or you have a hobby that allows you to make a profit from your efforts , you are monetizing your time and your effort that was invested into that job or hobby. That’s precisely what a wage or salary represents — the opportunity cost for your time. Every hour that you sacrifice to a job, you make a decision that the time you sacrifice is worth the monetary exchange you earn in return.

Let me make this clear: A wage is a trade, where you determine that your time is worth the amount you are being compensated for. Whether that amount seems low or high, that’s something you have to tackle as an individual. But, typically, individuals earn what their time is worth in accordance with multiple factors: skill/capability, specific knowledge, expertise, network connections, wisdom, and so on. All of those qualifications represent an amount of time that was invested by the individual. Time, again, is the actual currency.

By giving our time an exchangeable vehicle in the form of money, or purchasing power, we made it possible for our species to exchange our own time for the time of another’s. Where you may spend hours of your day to produce a tool to be used, let’s say an axe, you may then sell this axe to another for money, where you then go and use that money to purchase bread — which would have required effort on your part to produce yourself (not to mention the time and energy required to spend learning, failing and refining the process to produce said good).

Photo by Bermix Studio on Unsplash

Love For Money

So, I propose a … philosophical, maybe even spiritual question:

If money is “the root of all evil,” but money is simply a representation of our time, what does that make of us and our use of time?

Money is not the root of all evil. Money is a tool just like the axe. A tool is purely neutral; it has no philosophical or moral allegiance.

Therefore, if money is neutral, then the root of evil has to lie elsewhere, not within the vehicle with which we give our desires physical realization.

Appreciating money is to appreciate time or rather, the appreciation of efficient time expenditure. Saving money is to park your expended time for a larger purchase at a later date or to allocate funds in case of an unforeseeable expenditure or emergency. Whereas investing money is to sacrifice immediate gratification of a purchase and to risk providing funds to another individual/group, allowing them to use your money (ergo, time) to act out their plans or business, in exchange for a greater return on your initial investment in the future.

Money is not evil. Money is time. What matters is how we choose to spend it.

Trust

Whether you choose to spend your time, save it or invest it … one variable is necessary.

Trust.

You have to trust that your time is in good hands, ergo, the money that you choose to measure your time in must be free from risk of debasement, seizure, censorship or fraudulence.

Otherwise, a large portion of your precious time must be sacrificed to protecting your funds — your precious accumulated time. Those that rather not spend that time, spend the funds to compensate another for strategies and vehicles that protect their purchasing power from the forces of inflation and/or debasement.

Enter bitcoin, stage left.

A force of human ingenuity, bitcoin protects hodlerstime by providing a vehicle that is censorship resistant, unseizable, easily transportable, liquid and tradeable globally 24 hours a day, 7 days per week, 365 days per year. No breaks. No CEO. Maintained by the People.

Maintained by a flotilla of free-agent developers that work night and day, sacrificing their precious time to ensure the open-source network continues to provide services that so many across the globe have come to trust and compensated by the community (donations made by individuals, organizations and corporations that consider themselves members of the Bitcoin Legion).

It is of my opinion that if you truly value your time, then you must measure your time in a money worthy of trust. Bitcoin is the most logical vehicle to protect time value.

I trust Bitcoin.

*P.S. Big thanks to Orville, for your input, for being one of my most avid readers, and for being a good friend.

This is a guest post by Mike Hobart. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

Source: Bitcoin magazine

Categories
Crypto News Updates

Bitcoin Power: The Energy Of A Money

Energy production and its surrounding industry will experience a major shift in operations as Bitcoin becomes a driving force of profit.

The energy sector is seeing a complete paradigm shift:

  • Bitcoin’s monetary network effect
  • Monetization of energy
  • Leads to an arms race of energy tech becoming more and more efficient and productive
  • Cheap energy production allows for cheap energy utilization
  • Cheap energy utilization allows for cheap manufacturing, mineral mining and product R&D
Photo by NASA on Unsplash

Bitcoin

Ripples and splashes are being made in the financial realm. Since its entry onto the world stage, the Bitcoin network has been growing. With each addition to the horde of nodes and miners that are scattered across the globe, Bitcoin continues to dig in. Supplying the world with a financial vehicle that provides solutions to the failed experiment that is Keynesian economics, inflationary monetary policy, savings, and it cannot be forcibly removed from an individual or entity. If you can’t see the value there, then I won’t hold you.

Fixing money fixes the world. Fiat currencies have allowed a disease of the mind to proliferate. That disease is living beyond our means. With the popularity of this false currency, companies and individuals are incentivized to spend more than they earn. We are at a time in history where companies that earn little to nothing are being valued higher than those that turn a legitimate profit. And that is just from the monetary side. Social media has seen a rise in popularity for groups and individuals to go into debt to simply project a life of luxury and excitement, while the reality is the opposite. Luxuries and services supplied by debt get rapidly destroyed when reality comes knocking and the bill is due.

Bitcoin’s hard money philosophy rewires the thought processes of those that turn to using bitcoin as a savings vehicle. The individual begins to worry less about impressing those around them and narrows their vision onto purchases that provide the most utility and value to their life. Frivolous spending becomes a practice of the past, as they focus more on stacking, saving and building their financial independence. For without financial independence, you are also without true freedom.

Bitcoin Mining and Energy Production

Bitcoin mining is energy intensive — this is true.

Is there anything that isn’t, though? Consider the amount of energy that gets expended mining gold from the earth. The amount of fuel and power utilized to power the mining industry, that is also tearing up our planet , all to acquire a heavy substance. What about the energy that gets used in the refining process? Then the transportation, packaging and shipping said gold across the world. What of the energy dedicated to handling the paperwork of this whole process? Those are man hours that somebody is paying for.

Bitcoin has come under recent fire via energy utilization moralization.

Are we guilt-tripping anyone that is using up energy to watch Netflix in their free time? Or what of those individuals playing video games? Are we considering the amount of energy that gets wasted in politics? When a speaker is engaged in a filibuster? The amount of billable man hours that goes into this process — the work of interns, analysts and drones that collect intel for politicians just so a speaker can practice a legal waste of time? And that’s without considering the valuable energy that goes into the lighting, wi-fi and heating/air-conditioning of the building!

Photo by Karsten Würth on Unsplash

Energy moralization is the podium from which the village idiot crows.

What bitcoin mining does is far more revolutionary.

Right now the energy sector is stuck. Fossil fuels provide energy production but at a massive loss. Not only in the energy that is capable of being captured but also at great cost to the health of our global ecosystem. Similar to the gold mining process, fossil fuel extraction is extremely destructive. Renewable energy can provide energy at less ecological cost but is not free of the mining process. These renewable projects are also being financed by the fiat monetary system that is rapidly being exposed as a disease. As the collapse of fiat money approaches its crescendo, the renewable energy sector stands to suffer heavy losses. Bitcoin fixes this.

Bitcoin mining allows for renewable energy sources to directly monetize their capture process during non-peak hours. As the energy sector operates today, the majority of the operating time is not at 100% demand or utilization. Energy production and capture stands to gain massively by incorporating bitcoin mining during their non-peak times. By shifting their production to power bitcoin miners (and mining pools) these entities get a direct monetary reward which can then be stacked onto the corporate treasury as savings or sold onto the market. Bitcoin’s trading market is active 24 hours a day, 365 days a year. This allows greater liquidity to power production.

These operations require minimal human presence once they are fully deployed. Because of this simple aspect, humanity can begin to monetize geographically dispersed energy sources. Rivers and waterfalls can provide hydroelectric power without a heavy human presence. Wind and solar farms can be built in rural or barren areas that would make life for humans difficult. The fragility of humanity becomes less of a liability when it comes to energy capture and deployment with Bitcoin.

Game Theory

Because of this radical shift in energy production profitability, we will see an arms race play out. Companies and countries will begin to scramble to bring more energy production online to earn bitcoin. Cheaper and cheaper energy sources will become the focus of desire. Cheaper energy also entails cheaper upkeep costs. Renewables provide energy with far less cost to the environment, which may be the greatest cost of all. What little does money matter if we strip-mine and burn ourselves to oblivion? The future lies with zero-cost energy. With Bitcoin — that future inches closer.

Editor’s note: Fossil fuels continue to account for a majority of domestic energy production and consumption in the United States according to the US Energy Information Administration.

Cheap Energy and Tech (Industrial Revolution?)

Cheaper energy production and storage has been a focal point for the past decade in particular. In the summer of 2016, Tesla’s radical attempt to revolutionize the battery game was met with ridicule and laughter. Look at where the company is now – a mere 5 years later.

As Bitcoin causes energy production to become radically cheaper, those dwindling costs bleed into manufacturing. Cheaper manufacturing of goods allows for higher quality products to be sold at cheaper and cheaper prices.

These goods include: household items, cleaning products, food, phones and computers, homes themselves, and so on. As more Bitcoin-focused power production comes online, the cost of living will go down. As these costs come down, it also makes improvements much, much more actionable. Research and development is a costly process — trying new things costs man hours and goods to be expended and wasted in order to trailblaze new technologies and theories. Energy production that is made profitable by Bitcoin ( both the network & the currency) allows for this process to become rapidly cheaper via free-market competition.

“Bitcoin power” (referring to the power that is made profitable via bitcoin monetization) will propel the human species into the next technological era, an era we were supposed to be in decades ago.

This process allows for us to fix the issues that plague the United States of America today: education, healthcare, employment and manufacturing. Bitcoin is the most American technology that has ever been brought into existence.

Cheap improvements on tech plus a population reverting back to financial resilience equals a healthier and better educated population. Financially stable families are physically and mentally strong. These families become capable of partaking in higher education, possibly in the way of mentorships (not the farce of “higher education” that has become the collegiate stage).

Conclusion

Ultimately, what I am suggesting is that Bitcoin is, in fact, a singularity event. Whereas it is a network effect upon the financial system that is exorcising Keynesian economics, it is also inadvertently exorcising inefficiencies in the energy production sector as well. A network effect in economics that is causing a reflecting network effect upon energy.

While money is the vehicle that facilitates human ingenuity, energy production and utilization is the super highway upon which that ingenuity vehicle travels.

Photo by Karsten Würth on Unsplash

References:

  1. Angelo, Steve St. “Market Underestimates Energy Consumption By The Gold Mining Industry.” Money Metals Exchange, Money Metals Exchange, 25 Jan. 2018, www.moneymetals.com/news/2018/01/25/gold-mining-energy-consumption-001386.
  2. Banerjee, Ryan, and Boris Hofmann. “The Rise of Zombie Firms: Causes and Consequences.” BIS Quarterly Review, September 2018, Sept. 2018.
  3. Hodge, Tyler. “U.S. Energy Information Administration – EIA – Independent Statistics and Analysis.” Hourly Electricity Consumption Varies throughout the Day and across Seasons – Today in Energy – U.S. Energy Information Administration (EIA), 21 Feb. 2020, www.eia.gov/todayinenergy/detail.php?id=42915#:~:text=This%20variation%20in%20electricity%20demand,dependent%20on%20weather%2Drelated%20factors.&text=During%20the%20winter%2C%20the%20daily,peak%20and%20an%20evening%20peak.
  4. Rider, Christopher I. “Constraints on the Control Benefits of Brokerage: A Study of Placement Agents in U.S. Venture Capital Fundraising.” Administrative Science Quarterly, vol. 54, no. 4, 2009, pp. 575–601, doi:10.2189/asqu.2009.54.4.575.
  5. Ross, Sean. “What’s the Average Profit Margin for a Utility Company?” Investopedia, Investopedia, 16 Sept. 2020, www.investopedia.com/ask/answers/011915/what-average-profit-margin-utility-company.asp.
  6. Steffen, Bjarne, et al. “Experience Curves for Operations and Maintenance Costs of Renewable Energy Technologies.” Joule, Cell Press, Dec. 20, 2019, www.sciencedirect.com/science/article/pii/S2542435119305793#abs0010.
  7. Truong, Cong, et al. “Economics of Residential Photovoltaic Battery Systems in Germany: The Case of Tesla’s Powerwall.” Batteries, vol. 2, no. 2, 2016, p. 14, doi:10.3390/batteries2020014.
  8. Weitzel, Tim, et al. Reconsidering Network Effect Theory, Association for Information Systems, 2000, aisel.aisnet.org/cgi/viewcontent.cgi?article=1083&context=ecis2000.
  9. Denver Bitcoin
  10. https://gam.ai/blog/bitcoin-a-way-to-make-the-oil-and-gas-industry-more-resilient.html
  11. https://journal.bitcoinreserve.com/bitcoin-a-bold-american-future/amp/?__twitter_impression=true
  12. https://medium.com/coinmonks/american-firesale-making-america-cheap-again-9f19747b1ef2
  13. https://medium.com/coinmonks/extortion-valuation-manipulation-and-rigging-the-system-how-america-plays-the-monopoly-game-9612727b2418

This is a guest post by Mike Hobart. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

Source: Bitcoin magazine