Bitcoin has NO intrinsic value? | Hashpower Academy

Video Transcript:

Bitcoin has no intrinsic value Bitcoin is monetary data defended and produced by electricity which means that a certain amount of electricity right now produces a certain amount of Bitcoin and so if a minor consumes one million kilowatt hours of energy to produce a Bitcoin what are they willing to sell that electricity for back to the grid one Bitcoin or more and so the willingness for a minor to not consume energy to produce Bitcoin but instead switch off and sell the electricity instead means that Bitcoin has a direct exchange rate with electricity so I would like to shift that statement and shift that argument to is electricity something intrinsically valuable to the 21st century of humanity in our electrified future of transportation and Technology I think it is let me go through it again Bitcoin a unit of data information that stores all that transaction information in blocks which is produced by compute commodity of hash rate and that exchange of electricity into compute Power by mining Hardware or distributed all around the world and that minor in the middle has a choice to consume electricity to produce Bitcoin let’s say a million kilowatt hours of energy to produce a Bitcoin what is he willing to sell that energy for he would be willing to sell the power if he can buy more Bitcoin with that sale and so Bitcoin has a direct exchange rate with electricity through the efficiency and block rewards as its two pricing systems of local exchange rate and Global pricing comparison Bitcoin doesn’t have any intrinsic value yet it’s available through the energy nodes of the network in electrical form the commodity that produces Bitcoin if that’s not part of the the important discussion in the eyes of critics that have a more financial comprehension of Bitcoin or lack of shall I say that they need to understand that Bitcoin in a sense is a tokenized proof of electrical consumption and so there is a direct comparison a comparison of what the energy can be consumed into a quantity of Bitcoin or sold at that local grid level and the fungibility of Bitcoin ensures that the pricing system with computes as its internal medium of Exchange establishes this pricing system it’s a very interesting concept to look at things this way and I do have these four keywords as to the the true fundamentals of this with a Bitcoin scarcity absolute in 21 million units everyone and their mother has heard of 21 million fixed Supply monetary units and right now the block reward site of this is subsidy 98% of block rewards are subsidy which unfortunately connects Bitcoin to the Dollar by a 98% margin this is because subsidy has no economic activity behind it it’s just economic issuance policy of Satoshi Nakamoto he defined that the first four years would issue 50 blocks the next four years would issue 25 and so on until we reach no subsidy and fees take over fees are associated to some form of economic activity a movement of a much larger quantity of money or in layer 2os an even greater volume of transaction activity being settled on the layer one and so that large scale effect of economic activity will be priced in fees and the dollar based aspects of Bitcoin is attached to subsidy and so that transitional decline of subsidy and that increase in fee truly transitions us closer to a Bitcoin unit of account economics with the energy side one of my strongest predictions for Bitcoin is that when Merchants understand their costs to produce things in Bitcoin the exchange rate of Bitcoin to kilowatt hour that’s when they will be un they will be more understanding of what prices they can charge because if they can define a cost to produce with Goods Services transportation in an electrified World well that just ensures that they have their margin set from production to consumption because Merchants aren’t just going to arbitrarily charge a certain quantity of Bitcoin and right now there are Merchants that will allow you to pay them in Bitcoin but that is not using Bitcoin as a unit of account that’s just Bitcoin as settlement Bitcoin unit of account is when the quantity of other Commodities are priced in a quantity of Bitcoin such as electricity and maybe in the future compute power that’s all for today I hope this was an interesting insightful video I’m going to do more on this topic in future videos please let me know your thoughts in the comments like subscribe send it to that group chat that would love it even more and I will see you in the next video goodbye