There has been an awful lot of chatter in the crypto and macro communities about the US dollar losing its “reserve currency status”. No need to worry, the dollar never really was the world’s reserve currency. There’s something far more fundamental that underpins the world’s economy: The joule.
All human endeavour involves the conversion of energy, via work and time, into goods and services. The “consumption” of energy is not really a consumption at all — the first law of thermodynamics tells us that — but involves a conversion of primary energy sources into secondary and tertiary energy forms.
In Part I of this article, we looked at the four fundamental features of self-sovereign uncensorable money: tamper-evident records, public accountability, proof-of-ownership and corruption resistance.
Bitcoin has these features through its four key enabling technologies: a block chain, a distributed public ledger, digital signatures and proof-of-work.
In this article, we’ll use these four features as a checklist to determine whether some of the most loudly touted use-cases of Blockchain really need one.
First, the banks.
Here’s a random sampling of the many headlines that have been splashed across finance rags’ front pages in the last few years:
Blockchains. They’re all the rage. Blockchain technology has been touted as the magic bullet for everything from money to medicine to political regime change. The fervour of blockchain believers has been matched only by the furious scepticism and dismissal of its naysayers.
As a veteran¹ of the cryptocurrency industry, I have gone through the knowledge cycle that is uncommonly known as “the path to blockchain enlightenment”.
About a week after first reading Satoshi Nakamoto’s Bitcoin white paper, one usually has an eureka moment and realises what an amazing breakthrough in trustless exchange Bitcoin is. One gets terribly excited and for…
In this paper, we model the supply side of the bitcoin mining landscape in order to draw some inferences about the economics of mining difficulty and an estimate of the capital employed in the bitcoin mining network.
Read the full paper at nimbustech.biz
Bitcoin mining went through a golden period in 2012 — late 2013 where costs were low and the bitcoin price (even at $120) was far higher than the fully absorbed cash cost of mining. Those early adopters are smiling now.
Since 2014, mining has been in a ruthless arms-race, where only the most efficient ASICs stand a…