The Bitcoin Revolution: The Great Reset
And the fact that I have this channel open with youmeans that I have access to the channels that you have open yourself. And it scales very quickly in the sense that if we both use the Lightning Network and we have a channel open between the two of us,then you have access to all of my contacts and you can pay them. And I have access to all of yours and can pay them. Payments that I do will go through the channels of maybe multiple peoplein order to reach its destination. And this allows for payments to actually be instant.
Instant settlement. This doesn’t exist in finance until now. And they’re free or almost free in most casesjust because of how the network is built and only once. I would bring this money out of the Lightning Networkand back into the Bitcoin Main Networkis a transaction actually done inside of this main network,which means that you can do a lot more transactions, much faster and cheaper,but still having bitcoin as the settlement layerthat will confirm that all of this happened basically. The adverse environmental impacts of the computing activity used to mintmany of these digital currencies in the first place.
Bitcoin consumes more energy than entire countriesand it is projected to consume as much energyas all the data centers in the whole world this year!One bitcoin transaction. A single purchase, sale or transferuses the same amount of electricity as the typical U.S. household uses in more than a month. Bitcoin’s main layer is described as being very energy consuming,and it is a fact that at its highest in May 2021, the bitcoin networkwas using as much energy as what the entire country of Sweden uses. Although this seems like a lot,we need to break down what this energy iswhere it comes from and how this trend is evolving,including where the big minersare transferring to in order to lower their cost and environmental impact.
first of all, it is important to understandhow a miner business is set up. These miners are businesses. The more important ones today, being international companies listed on stock exchanges,setting up a mining business requires the purchase of hardware. The ASIC computers needed to tap into the bitcoin network and start mining,as well as real estate to store all of the miners. Wherever miners are around the world, the prices for these two elements will often be similar.
Of course, better deals can be negotiated. But given the price of electrical components and supply chain costs,this isn’t where miners will often gain an edge over their competition. What matters most to miners is energy. The third factor and this is the most important one is the energythat they spend in order to make their mining rigs turn. The prices vary between countries,they vary between region and they vary on the source of energy that they choose.
The cheapest source is right now, always renewable energies or nuclear, but nuclear is a bitkilled by governments. So these companies, by default, they have to direct themselvesand push for the development of these more renewableenergies because it will cost them cheaper in the long term. Cheap energy can be found from two sources;green energy and wasted energy. The energy we produce is always in excess. We never consume 100% of the energy produced by power plantsbecause it would put communities at risk of having blackouts.
In the US, it is estimated that 5-6% of the energy produced is lost when it is in transit,which is around 211 terawatt hours. This amount alone is close to doublewhat Bitcoin was consuming at its all time high. Nowadays, governments are pushing for the adoption of solar and wind powerand decide to crack down on nuclear. Unfortunately, although on paper this sounds positive, there are adverse effects to this. With our current technologies, the energy produced cannot be stocked.
Therefore, the energy from solar and windcan only be produced when it is sunny or windy. This makes it very unreliable and requires backup power plants to bepresent and active on a daily basis to cover for this lack of energy. This really is an adverse effect because Germany, for example,the biggest adopter of solar and wind in Europe,is now back to producing the same amount of CO2 levelsas it was producing 20 years ago. Green policies around the world have stopped the adoptionof nuclear power plants and have indirectly forced the worldto consume more natural gas than it used to. Natural gas comes with its own set of problems,just like other energy sources.
Natural gas is produced more than that is consumed, which leads to flaring. Flaring is simply the excess gas that is extracted that needs to be burned. It is a standard and a necessary habit in the industry. In 2019 alone, it is estimated that 150 billioncubic meters of natural gas was flared in the world. This is the same amount as Japan and Korea imported that same year,all gone, in the air, producing approximately 300 milliontons of CO2, the same as the total annual emissions of Italy.
In order to lower their cost and energy, miners are directly connectingto these sources of energy that until now were inaccessible. Because bitcoin miners can be placed anywhere in the worldwithout the need of being close to communities,they are already tapping directly into this energybecause of the attractive prices they can negotiate with the producersusing energy that would otherwise be flaredor would be lost due to transit. They also have access to more distant naturalsources of energy that cannot be used by communities. This is the case of hydropower plants, geothermal energy and even new ideas that are being studied,like getting energy from volcanoes. The more time passes and the more these businesses grow,the more likely they will transition to these sources of energyin order to increase their profits.
Other businesses are working on innovating our energy productionto service miners, allowing them to have clean and cheap energy. The long term positive effects the adoption of bitcoin could have onour energy production is largely underestimatedand even silenced by governments and other mainstream medias. They may use this as an argument, but it is so little if you compare it towhat energy is actually used around the world,and if you compare it also to the energy used by our traditionalfinancial services, banks and so on, they use way more energybecause each of them need to create their own settlement infrastructure separately, of course, because they don’t share this information with anyone. Whereas bitcoin is just one place where all of this happens,in an uncontrolled and so on. So it’s a little bit of energy consumed forhuge impact in terms offinancial freedom and freedom in general, actually.
Bitcoin was created by a person or a group of peopleunder the alias Satoshi Nakamoto. They wrote the white paper, built the network, released itand exchanged in discussions on many forums before one day disappearing. A genius, unknown personput together technologies and encryption protocols in a new way,forming the ultimate currency, and then did the most nobleand important step of all – disappeared. After creating it, talking about it publicly on forums,promoting the idea, discussing it, making improvements,setting up the original miners, there is just a point in timewhen the community also started to take over it;that this person, Satoshi Nakamoto, just disappeared,stopped answering on any kind of forums, stopped writing anythingand even since that point, the creation of bitcoin never touchedthe bitcoin that were on these original wallet addressesthat were created by him. So completely let it go to the communitybecause the whole point of it was to get ridof the control of our current financial monetary systemand let it be opened to the people.
So bitcoin is said to have been created by the people for the people. Because of that, because it’s controlled by a community, not by a central authority. Anyone can participate in improving the network,whether it is through translations, code reviews or by buildingapplications that add functionality to bitcoin. But only the bitcoin core team can actually make changesto the bitcoin network. And I think a huge part of governance in the bitcoin ecosystemare the bitcoin core developers.
Now before I met them and I’ve had the pleasure and the honor of meeting many of them. You know, that was a part of this ecosystemI didn’t understand, but actually getting to sit down and talk to them;If I have a learning curve need, it certainly is on the technology side. But in terms of talking to them about economics, economic theory,failed monetary regimes historically, they know economic history,many of them, better than anyone I’ve ever met. So that gives me a great degree of confidence that,you know, they do believe that they’re on a noble mission. They could be paid a lot more than they’re being paid right nowif they worked at Google or Facebookor some of these other areas.
But they’ve chosen. But they’ve chosen, you know, this sense of purpose for a noble goal,and they have incredibly strong technology backgrounds. So as well as a good understandingof economic history, especially monetary history,and it gives me a great deal of comfortas I think about the governance of the ecosystem, much, much more sothan I think we would find in other financial ecosystems. Gold was considered always the what is called hard money. In fact, the word hard money comes from the fact that gold is physical and hard.
Just like sound money comes from the fact that if you hit goldThere’s sound, right. So it was always considered the hardest money. Now, bitcoin follows the same rules, but they are strictly enforced by the protocol,which makes it a better form of gold. So not only a better form of money, but a better form of gold. Gold has been controlled by governments.
I’ve mentioned this at the beginning when it comes to removing the gold standard,but gold also then and during the second World War,for example, in the UK, people were not allowed to hold gold personally. The same happened in the US in the seventies. You had to sell your gold to the government because the government needed to increase its reserves. This has happened historically and if any bad situationwere to happen like it has happened in the past;the same thing would happen. I mean, we’re here today in Poland.
Whatever purchase of gold you do in Poland,your personal information has to be given to the governmentsaying how much gold you own, so that they know where they can come. knock at your door, if ever they just need to increase their gold reservesand don’t have the cash to buy it themselves, it’s so much easierto confiscate it. In the past seven yearsthere have been an average of one international monetary crisis every year. Now who gains from these crises? Not the working man, not the investor, not the real producers of wealth. The gainers are the international money speculatorsbecause they drive on crises they help to create them.
In recent weeks, the speculators have been wagingan all out war on the American dollar. The strength of a nation’s currency is based on the strengthof that nation’s economy, and the American economy isby far the strongest in the world. Accordingly, I have directed the secretary of the Treasuryto take the action necessary to defend the dollar against the speculators. I have directed Secretary Connally to suspend temporarilythe convertibility of the dollar into gold or other reserve assets,except in amounts and conditions determined to be in the interest ofmonetary stability and in the best interest of the United States. Bretton Woods established an arrangement wherebysupposedly from 1945 and the end of the war onward,all currencies were convertible to the dollar and the dollar to gold.
At that time gold reserves were the final mechanism for settlingbalance of payments deficits, but Bretton Woods forestall this processby permitting the sole reserve currency, the main reserve currency,to be considered as official reserves for foreign central banks. Such that they could settle all their deficits in dollars as opposed to gold. That’s the fundamental difference between the classical gold standardand what is called the gold exchange standard,which Bretton Woods enshrined in law and in treaty. In 1971, both Britain and several other countries decided to in-cashtheir huge accumulations of dollar reserves under the Bretton Woods system for gold. And of course, President Nixon, in his own way decided to trump them.
George says as long as we do not have convertibility,he says the Europeans can’t do all that much to us. They can’t, because he says when we have convertibility,then they had a right to lecture us about what we ought to do. But without convertibility, that is not the case. If these countries had the right to claim gold,to redeem their dollar reserves. It would put the United States in a position of insolvency.
We just shouldn’t get all that excited aboutthe fact that they worry about our budget, is that your view?- That’s exactly right. They can’t do one cock-eyed thing. and they’ll say, “Oh, we’ve got to maintain our relations”We’ve asked them to hold dollars. And I said, no, we didn’t ask them to hold dollars. They’ve held dollars.
It’s been in their interest to hold dollars. And I said to hell with them, I’m not worried about them,I’m worried about us. 1960s was filled with financial crisesthat involve the dollar, but the total collapse came in 1971. He issued an executive order on August 15th, 1971,and said, I’m sorry, we’re not paying our debts. We’re certainly not paying our debts in gold.
To our friends abroad, including the many responsible membersof the international banking community who are dedicated to the stabilityand the flow of trade. I give this to assure, the United States has always beenand will continue to be a forward-looking and trustworthy trading partner. In full cooperation with the International Monetary Fund and those who trade with us. We will press for the necessary reforms to set up an urgently needednew International Monetary system. To this day, gold can only be traded on the markets during weekdaysbecause some people have decided this.
With bitcoin, no one can make such decisions. Individual exchanges could, but would be losing against their competition. Governments have no way of knowing whether people own any. It is the safest way to hold wealth that is native to the internet. Therefore, it is available always, everywhere.
No assets in history has ever been this easy to acquire. Allowing anyone with an internet connection to tap into the network anonymouslyand be able to access their assetsthe same way, regardless of their geographic location,again anonymously. This is scary to governments. They understand that if people step away from fiat currencies,new debt, that is necessary to generate inflation and to devaluatecurrency’s won’t be created following the same rules. This puts their and their elite friends entire status quo at risk.
That’s why they’re afraid of it, and that’s why they try to kill it. In fact, in China just this year, they banned any bitcoin mining,and they closed any kind of exchange. which is, if you think as a totalitarian governmentis a great strategy, if you think of freedom for people,it is not, and they’re not the only ones. This year, also the UK has been attacking hard. They’ve banned a lot of bitcoin ads on buses or on the subway.