The discussion around energy consumption and bitcoin has been going on for years and is absolutely nothing new. You have probably seen these headlines before and I believe it will only intensify. We must ask ourselves why? My thoughts revolve around two main points - 1) energy costs going up 2) bitcoin price going up. As a pro bitcoin and pro environmental individual I hope this writing provides some education and insight on these subjects and allows you to pierce through the mainstream media’s agenda driven articles and headlines.
Energy Costs Rising
This is no surprise and has been going on for decades. It has recently become a hotly contested topic within everyday life because the price increases are palpable. When prices go up gradually people are able to better absorb it and make changes in due time, but when prices go up suddenly you can’t help but notice as it cuts into your disposable income quite quickly. We start looking to place blame and it is easy to point fingers. This is why our country and world in general is so divided, we keep pointing fingers when problems arise and arguing about solutions without ever fixing what might be at the root of all problems - the money. Fiat money, specifically dollars, when created out of thin air, directly devalues the purchasing power of said dollars. When an infinite supply of dollars are trying to purchase a finite supply of oil (or any source of energy) the price will naturally rise over time. The dollar is buying you less - that’s it. The dollar has also bought everyone less housing, less food, less education, less everything.
The more aggressive the creation of dollars the more aggressive the price increases will become. When we are talking about energy specifically it has very dramatic affects on a population as people can’t afford to heat their homes or fill their gas tank. Everything will go up in price as fuel is at the heart of our transportation and logistics. I can hear some of you saying, “but this is all because Putin invaded Ukraine!” Let me remind you, you’re pointing fingers and placing blame. Our political elite are doing the exact same thing as they need a scapegoat so they don’t get kicked out of office, or better yet, have a revolution on their doorstep. Not on their watch…they want to get re-elected. Rather than looking introspectively and seeing that the manipulation of the money supply is causing economic distortion it is much easier to play the blame game.
For example, gas prices had been climbing before anything to do with Russia. Albeit gradually, which I stated earlier is something people have time to absorb. But when prices rise suddenly is when we have problems… and finger pointing. Look at the chart below. Putin invaded Ukraine on Feb 24th.
Bitcoin Price Going Up
If bitcoin was $2 and a cute little thing on the internet would anyone be pointing fingers at it? No. The dramatic price increases of bitcoin have casted it onto the national stage. This may sound parabolic but bitcoin directly threatens the existing financial system which is controlled by the political elite. We have people in charge who understand this and we have people in charge who do not.
If you are part of those who do not understand this it would make sense to point blame at bitcoin. Bitcoin uses a lot of energy and if energy is expensive, bitcoin must be bad. Those who care about the environment or are looking to attract clicks through a good headline will write articles depicting this without taking the time to truly understand bitcoin and how it can actually provide a net positive for the environment as it has the potential to harness all wasted energy.
If you are part of those who do understand this it would make sense to point blame at bitcoin. Bitcoin undermines our financial system which is based on control, we cannot control bitcoin, therefore we must construe narratives to convince people that bitcoin is bad… ie: energy consumption. These false narratives from our agenda driven mainstream media are the basis for almost everything you’ll hear arguing against bitcoin. If Fox and CNN started telling you how bitcoin was good for the environment through utilizing wasted, stranded energy, or “renewable” energy I bet the perception would drastically change - but that’s not good for the agenda.
I have a question for you. Who gets to decide if energy consumption is good or bad? Think about it and we’ll elaborate on that at the end of this writing.
Conclusion
In the 1960s the cost of goods were rising including shoes, color TV, lamb, and eggs. People are obviously not happy about rising prices. Eggs happened to be the issue at the moment as it was a large part of the diet and rather than the government looking introspectively at the manipulation of money potentially causing the rise in prices they decided to tell the people eggs have cholesterol, cholesterol is bad, therefore eggs are bad for you and you shouldn’t be eating so many. You artificially suppress the demand for eggs and the price will fall.
Makes you think for a second doesn’t it? What if everything the government has told us is bad is simply because of rising prices? I believe that is partially what is taking place when it comes to energy. If energy costs are getting expensive of course you are going to tell people they have to use less, of course you are going to start pushing for windmills, of course you are going to push for electric vehicles, of course you are going to say fossil fuels are dirty and bad. Just some thoughts, take them or leave them.
If bitcoin threatens the existing system…. of course they are going to say it is bad! Makes plenty of sense that they would attack it on an environmental reason.
Did you think about that question? Who gets to decide if energy consumption is good or bad? It really is a interesting question. Do rich people get to? That doesn’t seem fair. How about Republicans or Democrats? No thanks. White people? Black people?
Throughout history energy consumption and human flourishing have been tightly correlated. The Henry Adams Curve depicts this with a 7% annual growth in energy consumption per capita. We have flat lined since 1971 with the birth of fiat money (that’s when we went off the gold standard). I firmly believe bitcoin, a hard energy intensive money, will realign energy consumption with human flourishing.
The morality of energy consumption is subjective. One person may say bitcoin is bad and a waste of energy, but other people may say dishwashers are bad and a waste of energy. Ultimately the market will decide. As long as people value dishwashers they are going to be produced and the energy consumption will be a net positive for humanity. The same goes for bitcoin. Bitcoin has a price and that is reflective of value. If bitcoin continues to have value, resources are going to continue to be directed at it. Maybe, just maybe, a digital decentralized store of value outside the control of the government is a net positive for humanity. Bitcoin has only been around for 13 years and we are still figuring out what exactly it is. I think this energy argument will be laughable when looking retrospectively at this.
Bitcoin doesn’t have a marketing team and the government has an unlimited amount of money to push whichever narrative they would like. Of course you are going to see a majority of the energy debate being negative towards bitcoin. As bitcoin continues to grow and develop, as people begin to realize just what it enables, as governments continue to clamp down on individual freedoms I believe the amount of people using bitcoin will increase, the education around it will spread, and the market will truly decide if bitcoin is a good use of energy. This is a bet I would not want to be on the wrong side of. Keep stacking.