Bitcoin was an experiment not just in economics but more in politics and game theory. A small piece of code having a trustless ledger and decentralization establishing its core value. Many new currencies have addressed, it major pain points and yet what is still powering the bitcoin? Why does bitcoin still lead the pack ?
Bitcoin, more than store of value or frictionless transactions is the Schelling point of the human resistance for the 99%. is it just their non-trust in centralised controls that makes bitcoin attractive, then why not other currencies?
Is it a race to the bottom?
Human history is marred with contests. It could be a street fight, a war or even a world war. People don’t care when they are inside the game. It’s a mental fever to outperform and win. Athletes usually burn themselves everyday to win. Bitcoin is a similar game of computational skill and energy sourcing. The reward is immediate and direct. A fever that spreads exponentially. It can lead city grids to collapse with no central authority but only markets to support the game. The game only ends when everyone decides to quit otherwise it plays out the prisoner’s dilemma.
What happens if the price of bitcoins goes too high and it actually does become an important source of foreign currency for smaller countries? Imagine the countries going through planned grid outage to make sure they bring in enough foreign currency to survive. The world economic structure adjusts enough to accommodate the growing unstoppable economic snow-ball of bitcoin dependence. The question is — is it a ultimate economic drug you can’t weed off ?
Is humanity already a singularity? and does it have a grand plan?
Our bodies contain trillions of organisms that work in harmony without ever knowing that they are part of a bigger conscience. The bigger question then is — does humanity have a conscience too? Is it an organism that has recently developed a functional nervous system using the internet? Think of each human being as a nerve cell that getting more and more interconnected. Think of religion or nations as nerve clusters of cohesive thoughts. Can bitcoin or crypto-currencies act as a new nervous system for coordinating behaviors? Is this a new way of forming new multi dimensional economic clusters between these cells ? Assuming, the markets always have a collective intelligence of humanity, then is there a larger purpose in bitcoin price continuing to dominate inspite of other platforms offering better alternatives?
Solar-mining is the new oil?
The economics and politics of previous era have been dominated by Oil. The industrial revolution shifted the world to energy based economies. The countries that produced more energy also dominated in international competitiveness. With the growing affluence the economies also became dependent on oil. Oil ended up dis-balancing the world in very brutal ways causing extreme economic imbalances resulting in some of the most extreme measures. Thanks to global warming, we are now seeing Solar energy going mainstream beating all market expectations. Even the automobile sector is seeing the sharpest reaction to the problem by a rapid shift to electric. Now, if you will notice that the global economic collapse of 2008 was just after peak oil and then boom two things pop out, tesla and bitcoin transforming the two largest expenses of your wallet.
Wait, isn’t bitcoin a dreadful energy consuming monster? that works against all the principles of humanity.
Think of Iraq war and then think of what will be the opposite direction. If Iraq was an oil grab then bitcoin is and energy dump. If oil war could have divided the world then bitcoin can potentially unite the world. If oil drove global warming, then bitcoin will drive solar revolution. If oil economically disbalanced the world economies, then Bitcoin is a payback.
The beauty of bitcoin against all other crypto currencies is that it will largely be mined using solar in the future. The beauty of solar energy based mining is that, it is one of the most equitably distributed resource across continents and tropical countries. It has potential to finally solve the rural economy problem for the whole world.
What is the rural economy problem?
Most humans would love to live in nature along with their family and community forever. It is like they lived happily ever after. The problem arises when the rural economy gets dis-balanced as it is impossible for every village to have something to export against the modern technology driven tools it might need. Not every village is able to afford healthcare, universities or things that require large infrastructure to produce. Simply exporting food does not balance the economy and families get broken when they have to find jobs in cities to earn income. Think of Solar-mining as a way to re-distribute wealth to rural economies and thus not only saving core human values but also increasing global GDP by providing larger markets.
The ground situation is escalating..
The wealth has a way of getting into the hands of few. It multiplies assets and debt primarily through interest rates causing economic disparities and social friction. It’s like playing a monopoly board game which is designed to end. Players prefer to stay in jail than actually play the game in the end. That makes the world very unsafe.
On the other hand, technology disbursement is increasing. So, is the power of what you can do with it. With increasing robotics and artificial intelligence, we are going to see much more of resistance and frustration with the masses with loss of jobs.
It’s a textbook situation for a revolution waiting to happen. It will first be peaceful then it may get more and more violent unless the game changes.
How bitcoin is a game changer?
The power and the beauty of bitcoin lies in its eventual impact.
1. Solar adoption— Solar energy has already become the cheapest to produce in 60 countries. Proof-of-work based mining accelerates adoption and reward for solar which is critical to undo global warming. It further acts as a store for unused energy making renewables more attractive.
2. Enabling rural economies — Solar-mining makes living semi-off-grid sustainable. Rural communities often break down due to demand for industrial goods and barely survive by exporting their kids to work in cities. Solar-mining has the benefit of decongesting cities and incentivise rural living.
3. Equitable wealth re-distribution — The absolute beauty about solar is it shines on everyone equally without discriminating for race, religion, casts, gender or boundaries. Its impossible for anyone to amass a large amount of surface area to disbalance the economy. Even 1% of annual mining of the total coins becomes an inescapable tax on wealth and amounts to redistribution over a generation across countries. For example, the current global wealth is $300 trillion. It would mean annual solar-mining budget of $3 trillion across all countries. It would generate massive demand for global trade.
4. Universal basic income — Solar mining is a form of universal basic income for communities or families. With stronger mitigation for mining concentration it is the new gold for humanity. You can already read stories of how it is saving families in countries like Venezuela that are experiencing economic collapse.
Why bitcoin be unstoppable?
Bitcoin is a completely new monetary system which does not begin from the broken past. It is an option to switch from the old system to the new game. It incentivises those who switch earlier. Think of it like a new game board that is growing in value as more players start playing it. Its gradual popularity will make the snowball bigger and unstoppable.
Unless, it starts being used for criminal activity or evading taxes on a larger scale. We will then see a coordinated ban on the currency from all nations.
What would bitcoin 2.0 look like?
Its like asking in 1993 of internet that how would future of internet look like? No one could imagine google, amazon, smartphones, whatsapp, hotmail or facebook. All we had was super connected computers with loads of information chaos and a lot of potential.
Similarly we are looking at a world with lots of currencies with a huge untapped wealth potential. This time it is not an information revolution but revolution of ‘wealth’ and ‘markets’. When we say ‘wealth’, it essentially means ownership. And when we say ‘markets’ then it means transactions having counter parties. Unlike information it is all centred around people. Markets and wealth require trust, clarity and predictability for them to work efficiently with minimal risk.
The power of bitcoin is not just replacing banks, reducing transaction fees, making them faster. Bitcoin is not just about putting together a public database of consensus or smart contracts acting as escrows. Although these itself are amazing outcomes. The biggest outcome in this revolution will be reintegrating markets, wealth and global citizens and thus control, in a way that minimises future risk to humanity and maximises its integrity & efficiency.
Our current accountability infrastructure is built for the developed world based on economics and centralised government control. It remain non-inclusive and dis-enfranchising to the rest of the world. It has severe capacity and speed limits to handle global challenges and emerging technology threats of the future.
The world is done playing the ‘Monopoly’ game for centuries. Let’s hope for a more exciting journey ahead of us. One that has no place for crime, greed or competition but builds on accountability, cooperation and collective sense of achievement. Don’t know if bitcoin does is all… but certainly know where we are headed..
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