4 ms·

I’ll try and explain it better. Money is analogous to work. You can’t just conjure up money (that would be illegal). If I have 50 dollars, I can pay someone t

I’ll try and explain it better. Money is analogous to work. You can’t just conjure up money (that would be illegal). If I have 50 dollars, I can pay someone to mow my grass. I have just converted potential energy (money) into work. In the same way, if I have a geothermal power plant in a remote Scandinavian wilderness, I can use that power to generate Bitcoin, and use that store of value to transfer to me which I can then convert into work by employing people, either directly as a service, or indirectly through a good. I hope that makes more sense now. To use your oil example - it would be like me mining a barrel of oil in location A, then converting it entirely into Bitcoin, sending the coin to me via the internet, then using the Bitcoin to buy another barrel of oil close to my home. I now have a barrel of oil I did not previously have, because I’ve transferred value (energy) from remote place A to local place B virtually.

johnsonlambo 5y ago
This can be done with current dollars on a screen, the thousands of different cryptos out in the ether, gold, etc. Some take less energy and some take more. Then they can be converted for work, a service, goods etc. This is not new or solely a characteristic of btc.
woodruffw 5y ago
> Money is analogous to work. You can’t just conjure up money (that would be illegal). This is wrong, but it's wrong in ways that are entirely irrelevant. > If I have 50 dollars, I can pay someone to mow my grass. I have just converted potential energy (money) into work. No, you haven't. You've applied a medium of exchange to a business transaction. You haven't "converted" any amount of energy. Converting energy means something specific, with real physical implications. Bitcoin doesn't violate the conservation of energy. > To use your oil example - it would be like me mining a barrel of oil in location A, then converting it entirely into Bitcoin, sending the coin to me via the internet, then using the Bitcoin to buy another barrel of oil close to my home. I now have a barrel of oil I did not previously have, because I’ve transferred value (energy) from remote place A to local place B virtually. This is just wrong: you can't "mine a barrel of oil" with Bitcoin. You can only burn the resource to prove the energy intrinsic in having possessed it. Once you've burned it, you can't exchange the token you've vouched with it for the same energy: you can only exchange it for more potential energy to burn. More energy is always used (and strictly wasted) than just burning a single barrel to begin with.
- throwaway73838 5y ago
  Actually, you’re wrong. Laughably so. Your assertion a the end there about more energy always being used than you get back - if that were true, mining btc wouldn’t be profitable - the whole point is you make more BTC than the value of the electricity you used to generate it. And to your former ‘points’: I think the issue we’re having here is that I’m talking about an abstraction. To you, the potential energy of a $100 bill is the ability to light it on fire to light your cigar, for example. For me, the potential energy is all the work you can do with it as an exchange of value. Money is a way to exchange work. Work is analogous to energy. Therefore, money is analogous to energy. I think where you’re getting bogged down is you Don’t see that to earn an income, you must burn energy in the form of food, money and time. With the Btc farm, you’re saving most of this energy by tapping into a renewable resource to generate the income which you can convert back into value. In short, there is no other way to derive value from a geothermal plant in the middle of nowhere, within reason. Certainly not significant financial value, other than as a crypto mine.
  - woodruffw 5y ago
    > Money is a way to exchange work. Work is analogous to energy. Therefore, money is analogous to energy. Money is a medium of exchange. You can use it to exchange anything. But that doesn't move energy; it exchanges the token for the object. You cannot move energy using money; you can only move it using a conduit that conforms to the laws of physics (and we have plenty of those). It is not energy itself: you can mint as much of a medium of exchange as you want to satisfy the constraints of your economic system. That's why there is no capital limit on the number of dollars in circulation, and why there is no one "count" of how many dollars exist: the dollar is an abstract source of liquidity that facilitates exchange. Its value comes from its ability to provide that liquidity, and from the Men With Big Sticks who will hurt you if you threaten it (the thing we usually call "fiat"). These are basic economic facts, the kind you learn in an "econ 101" class. Bitcoin's profitability is no more of a threat to them than any profitability is: tokenization of energy spent is valued because we've chosen to value it, not because it intrinsically violates the laws of thermodynamics. Economic actors can make "value" decisions based on anything, including Bitcoin's artificial scarcity and proof-of-work. But again, this does not a perpetual energy machine make. The "other way" you're looking for is called a high-voltage power line. We've been using them for quite some time, and they don't require us to tokenize energy (i.e., waste it) in exchange for future energy produced elsewhere. Stepping back a bit: I re-read your comment, and I think "analogous" is where the misunderstanding comes from. Analogies are weak abstractions. In a weak sense, money is analogous to (potential) energy. But this isn't a useful sense when talking about actual energy, the kind that power plants produce. Unless you actually move that energy with the token (via power lines, or any other means), all the token represents is the energy's production. It can't represent anything else without violating the laws of thermodynamics.

johnsonlambo 5y ago

This can be done with current dollars on a screen, the thousands of different cryptos out in the ether, gold, etc. Some take less energy and some take more. Then they can be converted for work, a service, goods etc. This is not new or solely a characteristic of btc.

woodruffw 5y ago

> Money is analogous to work. You can’t just conjure up money (that would be illegal). This is wrong, but it's wrong in ways that are entirely irrelevant. > If I have 50 dollars, I can pay someone to mow my grass. I have just converted potential energy (money) into work. No, you haven't. You've applied a medium of exchange to a business transaction. You haven't "converted" any amount of energy. Converting energy means something specific, with real physical implications. Bitcoin doesn't violate the conservation of energy. > To use your oil example - it would be like me mining a barrel of oil in location A, then converting it entirely into Bitcoin, sending the coin to me via the internet, then using the Bitcoin to buy another barrel of oil close to my home. I now have a barrel of oil I did not previously have, because I’ve transferred value (energy) from remote place A to local place B virtually. This is just wrong: you can't "mine a barrel of oil" with Bitcoin. You can only burn the resource to prove the energy intrinsic in having possessed it. Once you've burned it, you can't exchange the token you've vouched with it for the same energy: you can only exchange it for more potential energy to burn. More energy is always used (and strictly wasted) than just burning a single barrel to begin with.

throwaway73838 5y ago
Actually, you’re wrong. Laughably so. Your assertion a the end there about more energy always being used than you get back - if that were true, mining btc wouldn’t be profitable - the whole point is you make more BTC than the value of the electricity you used to generate it. And to your former ‘points’: I think the issue we’re having here is that I’m talking about an abstraction. To you, the potential energy of a $100 bill is the ability to light it on fire to light your cigar, for example. For me, the potential energy is all the work you can do with it as an exchange of value. Money is a way to exchange work. Work is analogous to energy. Therefore, money is analogous to energy. I think where you’re getting bogged down is you Don’t see that to earn an income, you must burn energy in the form of food, money and time. With the Btc farm, you’re saving most of this energy by tapping into a renewable resource to generate the income which you can convert back into value. In short, there is no other way to derive value from a geothermal plant in the middle of nowhere, within reason. Certainly not significant financial value, other than as a crypto mine.
- woodruffw 5y ago
  > Money is a way to exchange work. Work is analogous to energy. Therefore, money is analogous to energy. Money is a medium of exchange. You can use it to exchange anything. But that doesn't move energy; it exchanges the token for the object. You cannot move energy using money; you can only move it using a conduit that conforms to the laws of physics (and we have plenty of those). It is not energy itself: you can mint as much of a medium of exchange as you want to satisfy the constraints of your economic system. That's why there is no capital limit on the number of dollars in circulation, and why there is no one "count" of how many dollars exist: the dollar is an abstract source of liquidity that facilitates exchange. Its value comes from its ability to provide that liquidity, and from the Men With Big Sticks who will hurt you if you threaten it (the thing we usually call "fiat"). These are basic economic facts, the kind you learn in an "econ 101" class. Bitcoin's profitability is no more of a threat to them than any profitability is: tokenization of energy spent is valued because we've chosen to value it, not because it intrinsically violates the laws of thermodynamics. Economic actors can make "value" decisions based on anything, including Bitcoin's artificial scarcity and proof-of-work. But again, this does not a perpetual energy machine make. The "other way" you're looking for is called a high-voltage power line. We've been using them for quite some time, and they don't require us to tokenize energy (i.e., waste it) in exchange for future energy produced elsewhere. Stepping back a bit: I re-read your comment, and I think "analogous" is where the misunderstanding comes from. Analogies are weak abstractions. In a weak sense, money is analogous to (potential) energy. But this isn't a useful sense when talking about actual energy, the kind that power plants produce. Unless you actually move that energy with the token (via power lines, or any other means), all the token represents is the energy's production. It can't represent anything else without violating the laws of thermodynamics.