1 sat \ 2 replies \ @abetusk 7 Sep 2021 \ on: Bitcoin Has Already Won The Energy Game bitcoin
This article talks about how energy storage is of major importance and then goes on to talk about different ways of storing energy such as vacuum packed food and oil but then, strangely, includes fiat currencies and gold.
The major conclusion of the article is that gold is a good energy storage medium because it's so stable and that Bitcoin replaces gold. In my opinion, this article completely misses or glosses over a few points:
- Oil is an exceptional way to store energy. Maybe not in refined form but there's a reason why we can use it after it's been in the ground for millions of years
- I don't know of a usage of gold to provide power and the article doesn't mention it
- Currencies, fiat, gold and Bitcoin included, are proxies of energy. They're an abstraction over energy that allow us to transact without exchanging the medium of actual energy storage
In other words, currencies are essentially complicated IOUs with some time of energy storage medium backing them. The article confuses energy for proxies of energy. In programmer-speak, this is confusing a pointer reference to an object for the memory of the object itself.
Not only that, the article is misleading, talking about "winning" the energy game, suggesting an answer to the large power sink needed to advance the blockchain.
I would like to see an article that has more intelligence and nuance:
- Talk about the proxy for energy vs. actual energy
- Bitcoin has a watt-hour usage that is pretty easily accessible. Not so much for fiat currencies. Making the comparison isn't insurmountable as the last 40 years worth of wars in the US have been because of oil. If currency is a proxy for energy and the US wants to keep oil/energy production high to keep the dollar stable, that means there's a path to at least estimating the cost of what a fiat currency requires (or at least the US fiat currency)
- Talks about how any other use for proof of work might run into a conflict of interest and how the only real way to offset that is to use clean or green energy to produce currency. Maybe even suggest using proof of work "heaters" to try and use that energy more efficiently and discuss how that could or could not run afoul of the conflict of interest.
This kind of comment is exactly why I need to implement tips already.
Oil is an exceptional way to store energy. Maybe not in refined form but there's a reason why we can use it after it's been in the ground for millions of years
Kind of odd he missed that but I wonder how crude stores exposed to the atmosphere - perhaps well but maybe not.
Currencies, fiat, gold and Bitcoin included, are proxies of energy. They're an abstraction over energy that allow us to transact without exchanging the medium of actual energy storage
He definitely glosses over the proxy part to make his point but I suspect it's implied when he says things like, "As it turns out, gold is actually a very decent option. It's fairly scarce, and requires energy to mine." Still, I agree it would be nice for someone to discover what distinguishes an energy proxy from actual energy in terms of value storage. It might explain why proxies of higher degree like Proof-of-Stake could lose credibility as an energy token.
Talks about how any other use for proof of work might run into a conflict of interest and how the only real way to offset that is to use clean or green energy to produce currency.
I'm not sure what you mean by conflict of interest.
Overall excellent comment. It really caused me to think more deeply about it.
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He definitely glosses over the proxy part to make his point but I suspect it's implied when he says things like, "As it turns out, gold is actually a very decent option. It's fairly scarce, and requires energy to mine."
They talk about packaged food and (refined) oil being a store of energy and then in the next breath talk about gold, jumping from a store of energy to an energy proxy without pointing it out or acknowledging it.
Still, I agree it would be nice for someone to discover what distinguishes an energy proxy from actual energy in terms of value storage. It might explain why proxies of higher degree like Proof-of-Stake could lose credibility as an energy token.
Proof-of-Stake might hit all the checkboxes for a currency (fungible, not easily counterfeited, etc.) but misses one of the big features that Bitcoin was trying for, namely decentralization. But I agree, a more in depth discussion would be nice, clearly delineating assumptions and providing going into more detail about each aspect.
I'm not sure what you mean by conflict of interest.
I'm no expert, so take it with a grain of salt, but if Proof-of-Work were to have some other incentive built in, like solving protein folding, doing a hard math problem that people care about, etc., this provides an extra incentive structure for the PoW mechanism to be potentially subverted. I'm not sure there's a definitive answer one way or the other, as it looks like there are a few alternatives that do use this idea (see here), but this SO answer gets at why there might be some conflict.
In short, tying the PoW to another problem makes them dependent, and if the other problem ever got more profitable, that might provide an incentive to undercut the currency PoW. These problems might surmountable, as I see some discussion here and here but as a simple decoupling, making sure PoW's value is entirely focused on maintaining the blockchain/currency simplifies things, from a risk of attack point of view.
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