The Essence of Money: A Journey Through Time
The story of money is as ancient as civilization itself. Initially, the barter system was the norm, directly exchanging goods for other goods. However, the system had a critical flaw: it depended on the “coincidence of wants.” What if you had apples and wanted to purchase bread, but the person with the bread you wanted didn’t want apples? Enter money—an intermediary of exchange so that the transaction of goods needed to only go one way. Money needs to be something of universal acceptance to all of us.
Did you know that the word “salary” is derived from the Latin word “salarium,” which was the money paid to Roman soldiers for the purchase of salt? In ancient times, commodities like salt were not just a seasoning, they were used as money due to their intrinsic value. Salt was vital for preserving food long before we had refrigerators, everyone needed it and everyone wanted it, therefore an ideal form of money.
Money over the centuries has been tried and tested in many forms. As societies evolved, so did money—from commodities to coins, then to paper, and now to digital forms. Over this time certain criteria have been agreed upon to test its effectiveness. It needs to be:
- Durable: Money must withstand wear and tear, retaining its value over time.
- Divisible: It should be easily divisible into smaller units without losing value.
- Fungible: One unit must be as good as another, ensuring interchangeability.
- Portable: Money should be easily transportable, facilitating trade.
- Verifiable: Its authenticity should be easily identifiable to prevent fraud.
- Scare: Money must be available in limited supply to maintain its value.
Bitcoin and the Evolution of Money
Fast forward to today, and we have Bitcoin, a digital currency that’s revolutionizing our understanding of money. It’s not just a digital phenomenon; it’s a fundamental rethinking of what money can be, tethered in electricity, a commodity as vital to our modern lives as salt was to our ancestors.
Bitcoin’s Durability is conceptual, lying in its digital existence. Unlike physical currencies, Bitcoin cannot be worn down, degraded, or destroyed in the traditional sense. Its robustness comes from its decentralized blockchain ledger, maintained across thousands of nodes worldwide. Each node has a copy of the entire transaction history, and the system is designed to withstand any attempt at fraud or destruction, even if individual pieces of the network are compromised. You would have to simultaneously destroy every electricity grid, computer and every internet network to remove Bitcoin from existence, which have far bigger implications.
In terms of Divisibility, Bitcoin breaks down barriers. Consider the US Dollar, which divides into 100 cents (2 decimal places). Now, take Bitcoin, which divides down to 100 million satoshis which is the smallest unit of Bitcoin (8 decimal places), making micro-transactions a reality and expanding the possibilities of financial interactions big or small.
Portability with Bitcoin is unparalleled. You can send it anywhere globally, almost instantly, and remember that you decide what fee you want to pay. Bitcoin is not constrained by borders or banking hours, it’s neutral money for the internet age, because all you need to transact peer-to-peer is an internet connection.
For Verifiability, Bitcoin is in a league of its own. Every transaction is recorded as a public ledger file that every node has a copy of (the blockchain), visible to all but alterable by none, ensuring unparalleled transparency and security. And as we have learnt, if you would like to update this global ledger and earn the block of fees and subsidy BTC you need hashpower.
As for Fungibility, every Bitcoin is equal 1BTC = 1BTC, but it’s also unique because of its history on the blockchain. The value of Bitcoin in circulation represents an amalgamation of the energy and transactions it facilitates, it’s a multibillion dollar asset which is traded on order books both within the traditional finance world and in new emerging markets. Furthermore, in places like El Slavador it has become legal tender.
Scarcity is where Bitcoin mirrors the precious commodities of old. There will only ever be 21 million Bitcoin, making it the hardest and deflationary asset unlike any other in modern history. It’s the only ‘thing’ that humans cannot make any more of.
Visualization Recap:
Imagine money that appreciates in value, that can be sent across the globe in seconds, that’s transparent with absolute scarcity and defended both physically
The Big Picture Basics [Lesson: 1/24] Energy Fundamentals
Youtube VideosThere’s two sides to every coin, but Bitcoin has more than sides – it has worlds. It bridges digital and physical realms. To truly grasp the secret of one, we must learn about the other. Welcome to Hashpower Academy, where we uncover these worlds, starting with our course ‘Big Picture Basics.’ Today, we dive into Module 1: Generation & Carbon, exploring Lesson 1.1 ‘Energy Fundamentals.’ This is not just a lesson; it’s the beginning of a journey into understanding Bitcoin’s complex universe.”
📚 Welcome to Lesson 1.1 “Energy Fundamentals” in Module 1: “Generation and Carbon,” part of the “Big Picture Basics” course at Hashpower Academy!
This is a beginner-friendly guide to the world of energy, crucial in both the digital and physical aspects of Bitcoin mining.
🔋 What You’ll Learn:
Get to know energy – the universe’s way of doing transactions.
Learn about power measurement in watts and how it relates to time.
See how energy changes form in different areas of life.
Find out how electricity is changing our world today.
🌟 Key Points:
Gain basic knowledge about different types of energy.
Understand how energy changes and is saved in technology and your daily life.
Discover the vital link between energy and Bitcoin mining.
👥 Who Should Watch:
Perfect for anyone new to the concepts of energy and power.
Great for those curious about how energy is a game-changer in tech, especially Bitcoin mining.
📖 Learn More:
Check out the full “Big Picture Basics” course on our website, hashpower.academy, for a deep dive.
Join our community for more discussions and insights into Bitcoin mining.
🤝 Connect With Us:
Share your thoughts and questions in the comments. We value your input!
Subscribe to Hashpower Academy for more educational videos.
Embark on your journey at Hashpower Academy, where we demystify the complexities of Bitcoin’s digital and physical worlds, starting right here with “Energy Fundamentals.”
—————————
Financial Disclaimer:
This video is for educational and informational purposes only and should not be considered as financial advice or an investment recommendation.
The opinions expressed herein are solely those of the presenter and do not reflect the views of Hashpower Academy. Information is provided ‘as is’ and without warranties, either expressed or implied. We do not guarantee its accuracy or completeness. Investing in cryptocurrencies involves significant risk and should be undertaken only by individuals who can afford potential losses. Viewers are advised to conduct their own research and consult a qualified financial professional before making any investment decisions.
Video Transcript:
[Music] so if I had to explain Bitcoin in one word it would be electricity what is electricity it’s energy what is energy energy is essentially the transactional currency of our entire universe nothing breathes nothing moves nothing works without energy and that’s what’s so fundamentally important about everyday society that everything has a cost the cost of your plane ticket is mostly fuel liquid energy the cost of driving your car is mostly fuel liquid energy and as we transition into a society that uses electricity even more more on the roads in the transportation system in general and all other aspects of society it really becomes the most fundamentally important thing to understand and it’s especially important for this [Music] course
Watch on Youtube!
The Economics of Bitcoin Mining: Buying vs. Growing
Articles“Buy the corn or grow the corn”
Have you ever thought about the economics behind Bitcoin mining? It’s a fascinating concept that revolves around the idea of producing Bitcoin at a lower cost rather than buying it at market rates. In this blog post, we’ll explore the economics of Bitcoin mining and why miners choose to grow their own Bitcoin.
Imagine you have the means to grow corn in your backyard. Would you rather do that at a fraction of the cost or buy it for a premium at a market? The same principle applies to Bitcoin mining. Instead of purchasing Bitcoin at prevailing market rates, miners set out to produce it themselves, often achieving a production cost considerably lower than the market price.
The cornerstone of cost-efficient Bitcoin production is an ASIC (Application-Specific Integrated Circuit) miner. This impressive piece of technology comprises dedicated power supplies, cooling systems, and uniquely designed chips for optimized calculations. The hashpower of each miner, denoted in $/TH (Dollars per Terahash), determines its efficiency and market value.
Efficiency is crucial in Bitcoin mining as it directly impacts the amount of Bitcoin produced for a given amount of electricity consumed. An optimally efficient machine can generate a more significant amount of Bitcoin with just 1 kWh of electricity compared to less efficient miners. Miners strive to optimize every available resource to ensure that every Satoshi of Bitcoin is produced at the lowest possible cost.
Bitcoin mining is not just about producing digital currency.
It’s about doing so with precision and maximizing resources. Miners carefully calculate their costs and aim to minimize them to increase their profitability. By growing their own Bitcoin, miners can control the production process and reduce their reliance on market fluctuations.
As you can see, the economics of Bitcoin mining are fascinating. Miners are driven by the desire to produce Bitcoin at a lower cost than buying it from the market. They invest in advanced technology and optimize every aspect of the mining process to maximize their efficiency and profitability. Just like a farmer growing his own corn, Bitcoin miners take pride in producing every Satoshi of Bitcoin with precision and at the lowest possible cost.
The strength or capability of each miner is denoted by its hashpower, often expressed in terms of $/TH (Dollars per Terahash). This price point isn’t arbitrary. A miner’s efficiency – its ability to turn electricity into Bitcoin – directly impacts its market value. An optimally efficient machine can take 1 kWh of electricity and generate a more significant Bitcoin amount compared to its less efficient counterparts.
Bitcoin: The Evolution of Money
Big Picture BasicsThe Essence of Money: A Journey Through Time
The story of money is as ancient as civilization itself. Initially, the barter system was the norm, directly exchanging goods for other goods. However, the system had a critical flaw: it depended on the “coincidence of wants.” What if you had apples and wanted to purchase bread, but the person with the bread you wanted didn’t want apples? Enter money—an intermediary of exchange so that the transaction of goods needed to only go one way. Money needs to be something of universal acceptance to all of us.
Did you know that the word “salary” is derived from the Latin word “salarium,” which was the money paid to Roman soldiers for the purchase of salt? In ancient times, commodities like salt were not just a seasoning, they were used as money due to their intrinsic value. Salt was vital for preserving food long before we had refrigerators, everyone needed it and everyone wanted it, therefore an ideal form of money.
Money over the centuries has been tried and tested in many forms. As societies evolved, so did money—from commodities to coins, then to paper, and now to digital forms. Over this time certain criteria have been agreed upon to test its effectiveness. It needs to be:
Bitcoin and the Evolution of Money
Fast forward to today, and we have Bitcoin, a digital currency that’s revolutionizing our understanding of money. It’s not just a digital phenomenon; it’s a fundamental rethinking of what money can be, tethered in electricity, a commodity as vital to our modern lives as salt was to our ancestors.
Bitcoin’s Durability is conceptual, lying in its digital existence. Unlike physical currencies, Bitcoin cannot be worn down, degraded, or destroyed in the traditional sense. Its robustness comes from its decentralized blockchain ledger, maintained across thousands of nodes worldwide. Each node has a copy of the entire transaction history, and the system is designed to withstand any attempt at fraud or destruction, even if individual pieces of the network are compromised. You would have to simultaneously destroy every electricity grid, computer and every internet network to remove Bitcoin from existence, which have far bigger implications.
In terms of Divisibility, Bitcoin breaks down barriers. Consider the US Dollar, which divides into 100 cents (2 decimal places). Now, take Bitcoin, which divides down to 100 million satoshis which is the smallest unit of Bitcoin (8 decimal places), making micro-transactions a reality and expanding the possibilities of financial interactions big or small.
Portability with Bitcoin is unparalleled. You can send it anywhere globally, almost instantly, and remember that you decide what fee you want to pay. Bitcoin is not constrained by borders or banking hours, it’s neutral money for the internet age, because all you need to transact peer-to-peer is an internet connection.
For Verifiability, Bitcoin is in a league of its own. Every transaction is recorded as a public ledger file that every node has a copy of (the blockchain), visible to all but alterable by none, ensuring unparalleled transparency and security. And as we have learnt, if you would like to update this global ledger and earn the block of fees and subsidy BTC you need hashpower.
As for Fungibility, every Bitcoin is equal 1BTC = 1BTC, but it’s also unique because of its history on the blockchain. The value of Bitcoin in circulation represents an amalgamation of the energy and transactions it facilitates, it’s a multibillion dollar asset which is traded on order books both within the traditional finance world and in new emerging markets. Furthermore, in places like El Slavador it has become legal tender.
Scarcity is where Bitcoin mirrors the precious commodities of old. There will only ever be 21 million Bitcoin, making it the hardest and deflationary asset unlike any other in modern history. It’s the only ‘thing’ that humans cannot make any more of.
Visualization Recap:
Imagine money that appreciates in value, that can be sent across the globe in seconds, that’s transparent with absolute scarcity and defended both physically
The Dance of Energy and Time: How Bitcoin Speaks the Universal Language
Big Picture BasicsWhether you turn the first pages of ancient religious scriptures or leaf through the introductory chapters of a science textbook, one theme resonates clearly: everything begins with energy. It’s the fundamental currency of our existence, seamlessly interwoven into the fabric of our universe. Power, an expression of this energy, is quantified in watts, bringing a temporal dimension into the mix. By understanding watts, we glimpse the intricate dance between energy and time, two of the universe’s most profound concepts.
This dance abides by a core principle: energy, in its myriad forms – from the kinetic rhythm of a heartbeat to the electric hum of our cities – is neither created nor destroyed. It simply transforms, finding new ways to manifest. As our world accelerates towards electrification, understanding the transactional nature of energy becomes ever more crucial. It’s the universal language, and as we’ll discover, Bitcoin speaks it fluently.