Note: this is reposted from an earlier deleted post from today, as an error was detected.
In the fiat era, through 93% of bitcoin's total issuance, its fixed monetary properties (21M cap, distribution schedule, portability) have played an outsized role in monetization. I posit however, that its fixed liberties, like censorship resistance, decentralization, bearer assurances, property rights, etc, will matter most on the other side of monetization. On this side of monetization, they haven't mattered as much yet, even though perhaps, these principles are what give the protocol all its quote-less value to begin with. I’ve observed that most view bitcoin’s fixed liberties as properties that apply to individuals—which they are—but are overlooked as properties that apply to nation states, businesses, and artificial intelligence agents.
Mining boasts an economy of scale:
• access to capital
• cheap electricity
Today we're watching hashpower majorities being formed at the grid via industrial connections and energy contracting. Many big miners are publicly listed companies that anyone can buy ownership into. The newest ASIC's have large purchase agreements. Professional pools require hashpower minimums. Sure, plebs today can afford an ASIC or two, but mining hardware increases proportionally with bitcoin's price, adjusted for hashpower, minus theta as the next halving persistently approaches. Mining is slowly leaving the pleb world behind and industrializing. Braiins Pool (formerly Slushpool) is a pleb favorite and you can see the struggle there to keep up with the Foundry's of the world. What is amazing though, is that over time mining has consistently distributed and gotten more decentralized. Anyone remember back in the day when there were only 7 mining pools and GHash.io had 48% of hashpower? Or when nearly 80% of bitcoin mining was China-based? Today mining pool hashpower distribution looks as follows:
Miners and pools that snipe a block can include whatever transactions they want in that block. How much value can fit in a single bitcoin block? This question is harder to answer than you think. I wonder then in the future, in a world where already today, $50B is considered a small government spending bill, will mining be less about competing to beat the economy of scale to profit, and more about censorship resistance, fixed liberties, where nation states and businesses (either mining themselves, contracting with their own country's miners, or pooling with allies) set hashpower baselines, can include their own uncensorable transactions, and settle trade?
Presumably, this raises concerns of mining centralization by large institutions. But are we looking at this through a myopic aperture? Could mining and bitcoin end up [globally] decentralized in a similar way to the US government's decentralized form of governance? Consider:
We have a Federal government and 50 independent states. Half the Federal government is made up of state representatives. And it's all held together by a distributed, and heretofore immutable legal document called the Constitution. With this I'm referencing mostly the Bill of Rights, which make up the first 10 Amendments of our Constitution. I've always believed bitcoin shared design patterns with this and have gotten significant pushback when mentioning it.
So perhaps for the res publica of plebs, nodes are as they ever were—important things. Run one? Directionally it will only get easier to run nodes because the block size remains fixed, while technology inflates (storage, silicon, etc), and things like Zerosync promise the ability to run validating nodes on phones or smartwatches. There's no doubt that every wallet in the future will be self-validating (L1/L2), and any of them that can even touch a users money will be considered bad actors.
Continuing with the Constitution thing, here's what makes it underrated: since its ratification in 1791, it has consistently distributed freedom. In 1791, there were still slaves, native Americans were not considered citizens, women couldn't vote, judicial review didn't exist, freedoms of the press weren't established, non-property owners couldn't vote, homosexuality was persecuted, and so on. But over time, as legal precedent endlessly built upon legal precedent, with people asserting their constitutional rights, freedom continued to get distributed, and annihilated anyone trying to stand in the way. Hell, not long ago concealed carry wasn't legal in all 50 states. Today it is, and when I tell foreign friends I can legally carry a gun in my pocket (I live in a very liberal state), they think I'm lying. Through 232 years, not a word of the Bill of Rights has been changed, it's survived 118 different congresses, a civil war, and enormous economic and cultural changes. That's nuts! Will bitcoin do something similar?
Anyway, while security budget saviors seem interested in thrusting inscriptions, forks, chains, and their expedience inside the womb of a 15-year-old protocol, I’m thinking the future of most mining hashpower could converge on something more legally tenable, like its fixed liberties, especially given the fact that the atomic unit (sat) can be value encoded to represent fiat, organized in blocks, and liquified on the Lightning Network.
Would appreciate some criticism. Sats for replies as always, you know the rules.