Thread by @Bquittem

1/ #Bitcoin changes the incentives around two foundational systems — money and energy.

Results in (1) universal digital property rights and (2) mastery over energy. Pillars of progress in the 21st century.

Let’s explore mining through an Ecology lens👇

medium.com/@BrandonQuitte…

2/ Why write this?

Most people are uneducated about energy. Results in bad takes and poor policy (see Germany ⚡️prices)

Energy enables us to live w/o dying from heat, cold, natural disasters. Powers hospitals, transportation, food security.

Getting this right matters. A lot.

3/ Energy consumption is directly correlated with GDP.

Want to help developing countries? Help them harness more energy.

Interestingly, Bitcoin acts as a free market subsidy for energy investment.

Incentivizes developing otherwise uneconomical energy sources.

4/ Now, you might be thinking...

“wow energy production is more important than I thought, maybe I should learn more"🤔

Bingo. This matters. and the energy rabbit hole is deep.

@Jack gets it. Hopefully, you will too.

https://twitter.com/jack/status/1478487138874372102?s=20

5/ “There is no optimistic version of the future in which humanity does not use significantly more energy than it does today.” 

Highly recommended this essay by @ajscalia + @btc_buddhist

bitcoinmagazine.com/culture/bitcoi…

6/ Energy Industry Facts

- Doesn’t travel well + cannot be easily stored
- Thus: supply must be near the demand
- Energy ≠ electricity
- Grids must overproduce (satisfy peak demand)
- Wind/Solar cannot save us
- “Consuming electricity” doesn’t necessarily produce additional CO2

7/ Bitcoin mining and Proof of Work are also widely misunderstood.

As a result, Bitcoin+Energy symbiosis is severely mispriced,

But I'm not surprised...

Bitcoin mining is everything you don’t understand about energy combined with everything you don’t understand about Bitcoin.

8/ Bitcoin miners are novel energy market participants.

Often called the "energy buyer of last resort"

Unique traits: colocation, interruptible load demand, and high mobility.

Over time, miners will radically transform the energy landscape. cc: @SGBarbour @denverbitcoin

9/ Miners improve the economics of energy producers, provide jobs, and increase grid resilience.

In exchange, miners receive cheap energy (higher profits) and gain powerful allies (local governments).

Energy utilities that partner with Bitcoin will outcompete those who do not.

10/ Back to ecology... What's a pioneer species?

A "pioneer species" such as a lichen bootstraps "ecological succession." They convert a barren wasteland ➡️ oasis of life.

Similarly, Bitcoin miners bootstrap human civilization by converting an energy desert ➡️ human flourishing

11/ Think of Bitcoin miners as “citadel seeds.”

They may be unassuming now... but as Bitcoin miners colonize new territory it changes the local incentives and positive second-order effects abound.

“Large streams from little fountains flow,
Tall oaks from little acorns grow.”

12/ Bitcoin also incentives investment into NET NEW energy assets

Bitcoin miners go directly to the energy source serving as "captive demand"

This reduces risk + increases ROI

Leads to an increase in energy production, a decrease in energy cost, citadels forming alongside🤞

13/ The Congo is mining Bitcoin, benefits include:

- economic development
- minimize deforestation
- reduce violence
- reduce reliance on imports
- preserve endangered species
- prevent unnecessary deaths caused by cooking with biomass

h/t @gladstein

bitcoinmagazine.com/culture/bitcoi…

14/ “Instead of relying on altruism or sliding deeper into debt, EM countries can finance renewable energy farms and harness vast natural resources via Bitcoin mining and generate immediate revenue to expand electrification and “close the energy access gap”
 
—  Alex @gladstein

15/ Recap of Bitcoin mining incentives

1- Harnessing energy anywhere can be monetized
2- Existing energy assets are more economical
3- Cost of capital for net new energy assets has decreased

Now let's speculate on this might take us in the next 10, 100, or 1,000 years…

16/ Prediction 1: Bitcoin Mining leads to Energy Abundance

Similar to how demand for online streaming services drove investment into broadband infrastructure...

Bitcoin creates demand for energy (and efficient use) which will drive investment into energy infrastructure.

17/ As our energy constraints decline, new tech will become economical

- H20 desalination plants
- Molecular weight refineries
- Increased food production
- Space travel + terraform Mars

Not to mention, it will raise the global minimum standard of living. @LynAldenContact

18/ Prediction 2: Early adopter countries will leapfrog laggards

Like the early internet, the first countries to mine Bitcoin will be rewarded in (1) energy abundance (2) more wealth

El Salvador is off to an early lead w/ volcano🌋 mine, bitcoin bond, bitcoin city. @nayibbukele

19/ Prediction 3: The Great Spreading Out

Historically, humans built civilizations alongside rivers that provide transport, energy, food, water, defense.

Then we urbanized during the industrial revolution.

Bitcoin enables us to spread out by colonizing remote energy assets.

20/ Remote energy assets will form the nucleus of startup cities

- Abundant energy/wealth from mining BTC
- Ideologically aligned people
- Increasingly self-sufficient
- Experimental governance / special economic zones
- eventually fully self-sovereign city-states (citadels)

21/ These citadels must succeed, for they have an important duty.

They must preserve the spark of freedom, for I fear it’s more fragile than we know.

FYI freedom is upstream of prosperity. Want prosperity?

Bitcoin ➡️ freedom ➡️ innovation ➡️ prosperity

https://twitter.com/BTCsessions/status/1478072034542305284?s=20

22/ Bitcoin changes incentives around  money + energy.

Results in (1) universal property rights and (2) energy abundance. Huge win for humanity

Now please go plant "citadel seeds"around the galaxy.

“Mighty oaks from little acorns grow”

medium.com/the-bitcoin-ti…

23/ Thanks for reading. Did you enjoy this thread?

Follow me @Bquittem for more content on the intersection between biology and technology 🙏

Example: Comparing Bitcoin to Fungi 🍄🤯

https://twitter.com/Bquittem/status/1072864756296486913

24/ Thanks to @GhostofSvetski for including me in @TimelessBitcoin alongside some of my favorite writers @allenf32 @craigwarmke @TomerStrolight @profstonge 🙏

Editors: @nic__carter @jevidon @allenf32 @mcshane_writes @samcallah @dhruvbansal

Designer: @Makena_Rhodes

25/ Inspirations + people cited in the essay:

@saylor @Breedlove22 @nic__carter @denverbitcoin
@LynAldenContact @ajscalia @harry_sudock @btc_buddhist @JasonPLowery @MartyBent @dhruvbansal @ObiWanKenoBit @level39 @gladstein