Thread

Money must be anchored to the physical world. That anchor is energy. If a monetary unit can be created without cost, without energy expenditure, it has no physical basis. Even a perfectly cryptographic, trustless system that enforces scarcity without work would still be ungrounded. It would be a symbol without substrate. What money represents is an exchangeable good that required effort to bring into usefulness. Effort implies time. Time implies energy. Value begins there. Bitcoin’s proof-of-work is not incidental. It is the bridge between the abstract and the physical. Energy was expended. Humans chose to expend it. Will was embedded into existence. Like artisanry, that work is indelible. Without the work, Bitcoin would lose its relation to the real world. With it, Bitcoin becomes an intangible good that can nonetheless carry real value. Existence of bitcoin testifies that someone sacrificed something irrecoverable: time, proven by energy burned. Scarcity amplifies this. Cryptography preserves it. Ownership is not just possession of bits, but possession of the proof that work was done, will was exercised, and value was brought into being.

Replies (8)

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↩ replying to Brunswick
Yes, I know, used that for simplicity. Point was no new units get created from then on, so there is no longer any connection between units and money creation. Not trying to be nitpicky for the sake of it, just a phrasing I often see which doesn't quite make sense. Unless you consider new utxos as new units, in which case I guess your phrasing is fine as is...just thought of this now.
↩ replying to YODL
I wasn't considering new UTXOs as new monetary units, I was referring to the sum of all bitcoin existant on-chain. What I mean is that all bitcoin units come into existence through proof of work, not that all proof-of-work cause new bitcoin to come into existence. The transaction fees are the block reward in addition to the new (created/issued) bitcoin, and proof-of-work is expressed for the fee portion as much as for the issuance portion. Theoretically at some point in the future, when the tx fees reliably exceed the issuance, the hashrate might synamically vary block-by-block depending on total available fees in the mempool.
↩ replying to YODL
Gigi has one of the best articles about it. Bitcoin is time. I'm not sure time is energy, but clocks and watches require energy to keep time. The timestamp server on this peer to peer network requires energy to keep time just like every other clock. That's why I don't waste any time with shitcoins. People ask me, "What do you think of Voldemort coin(or whatever)?" I think Bitcoin is a new clock. Time is money, but don't let this distract you. If it ain't broke, don't try to fix it. The fiat monetary system is broken and chock full of bailouts. Satoshi put a secret message about bailouts for banks in the script hash of the Genesis Block. He discovered a new clock that solved this problem. Bitcoin solved the double spending problem. Voldormort does not solve the double spending problem. It changes something in the new clock Satoshi discovered. Adding a 13th number to a clock doesn't solve any problems. Neither does changing the addresses to begin with an "r" instead of "bc1"...but that's basically what Voldemort coin did. Adding 13 numbers to a clock doesn't have much of a use case.