Bitcoin fixes what, exactly?
This article sums up all real world problems that Bitcoin - and Bitcoin only - can or is currently fixing. It will be updated regularly, and you can contribute with new solutions in the comment field.
“Bitcoin is a bank in cyberspace, run by incorruptible software, offering a global, affordable, simple, & secure savings account to billions of people that don't have the option or desire to run their own hedge fund.” - Michael Saylor
Bitcoin has proven very hard to define, as it is so many different things at the same time. The above quote is a good start, however, but as we shall see below, Bitcoin is a lot more than that.
(Note: all future articles from this author will be published as editorials at: bitcoinmaxinews.com)
Ultimately, what Bitcoin “is” seems less significant than what it does, and can do, for humanity in terms of solving major world problems. This is not least the case since no “altcoins”, or other innovations, can claim to solve the below problems like Bitcoin can.
Bitcoin fixes this
The reason Bitcoin - and Bitcoin only - can solve all these problems is because it’s the only truly decentralized monetary network/policy that can ever exist.
All other crypto projects are controlled by a single person or a small group of people. This makes them vulnerable to corruption/manipulation with an all-too-human single point of failure.
#1 Problem: Government oppression and inflation
The vast majority of the world population is currently living under oppressive regimes where the local currency is being debased in various degrees of hyperinflation.
This makes it hard/impossible for people to save for the future, and it takes away their hope to at least give their children a better life.
Half-life of purchasing power due to inflation:
Bitcoin - and Bitcoin only - gives financial freedom, private digital property rights, a long-term savings account and hope for the underprivileged 89 % of humanity living under oppressive regimes and struggling in the quicksand of inflation. In fact, close to 100 % struggle in that quicksand in 2022, except those who save in Bitcoin.
Bitcoin is also hard for governments to confiscate/censor, as you can literally keep all your wealth in your head by remembering 12 or 24 words. You can transfer any sum you like across the globe without permission from anyone, and you can easily take your wealth with you across borders and hide it from being confiscated.
Bitcoin separates money and state, which is about as significant as the separation of church and state was in the past, if not more. A transparent, immutable and incorruptible monetary network/policy solves all corruption the fiat system (and all other crypto projects) naturally attracts.
Unlike Fiat currencies, which can be printed/created endlessly, Bitcoin is hard-capped at 21 million units. The issuance of new BTC happens according to a fixed and immutable schedule with halvings every 4 years. The final BTC will be mined in 2140, and around 19 million has been mined already.
Jason Lowery sums up the inflation problem and solution well in this infographic:
This short video should be an eye-opener for all those who are too “financially privileged” to understand and appreciate the massive problem only Bitcoin solves:
Sources and further recommended reading:
https://www.swanbitcoin.com/canon/
https://www.amazon.com/Check-Your-Financial-Privilege-Gladstein-ebook/
https://bitcoinmagazine.com/culture/check-your-financial-privilege
https://www.financialinclusion.tech/
https://www.forbes.com/sites/leeorshimron/2020/06/30/bitcoin-is-the-separation-of-money-and-state/
https://bitcoinmagazine.com/culture/bitcoin-seperate-money-state/
https://medium.com/cryptonerds/bitcoin-separating-money-from-state-f6418cab2731
#2 Problem: The legacy financial system is extremely inefficient (both in terms of transaction speed and energy consumption (yes, really))
source: https://twitter.com/tonimoral23/status/1545684467989225472?t=LtIAmxJjONas3GE0YSb4pQ&s=19
Bitcoin - and Bitcoin only - is a fully decentralized global monetary network that’s proven to be 56x more energy-efficient than the legacy system (hint: it’s because of the Lightning Network).
The lightning network allows for instant payments with millions of transactions per second and extremely low fees. This makes Bitcoin both faster, cheaper and far more energy-efficient than the legacy fiat system.
With Strike, vendors can accept Bitcoin payments that are instantly converted to local currency, and the fees are significantly lower than with Visa and similar. It’s only a matter of time before this far more efficient solution is implemented on a global scale.
Sources and further recommended reading:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4125499
https://finematics.com/lightning-network-explained/
#3 Problem: Renewable energy innovations are hard to scale (due to the “innovation valley of death”)
Bitcoin - and Bitcoin only - unlocks and scales renewable energy sources (including brand new innovations), including up to 8 terawatts of year-round baseload power for at least 1 billion people.
Electrical power can be converted directly into money thanks to Bitcoin’s proof-of-work protocol, and that makes all the difference needed to solve the innovation valley of death problem.
Bitcoin mining can significantly increase the use of renewable energy (like wind), because Bitcoin miners are reliable buyers of last resort all year round no matter what. Check this 8-minute video to learn all about how this works:
Sources and further reading:
https://beincrypto.com/bitcoin-why-environmentalists-need-to-relax-its-better-than-you-think/
https://bitcoinmagazine.com/business/bitcoin-unlocks-ocean-energy
https://bitcoinist.com/bitcoin-miners-becoming-buyers-of-last-resort-for-clean-energy-report/
#4 Problem: Methane has 84x the “global warming effect” of CO2
Bitcoin - and Bitcoin only - can “eliminate 5.32% of all global emissions by 2045. This represents 23% of all global methane emissions: more than half the UNEP’s targeted reduction of methane of 45% by 2045.”
Source and full ESG study report: https://batcoinz.com/quantifying-the-potential-impact-of-bitcoin-mining-on-global-methane-emissions-4/. It’s summed up in this article: https://bitcoinmagazine.com/business/bitcoin-mining-can-prevent-climate-change
(For the record: personally, I don’t buy into the whole climate change hype. I think it’s all a scam to consolidate power. That being said, using energy that would otherwise go to waste to mine Bitcoin is never wrong.)
Bitcoin mining rigs can be set up anywhere (including remote locations), and use methane to mine bitcoin. This is already happening:
Sources and further reading:
https://beincrypto.com/bitcoin-why-environmentalists-need-to-relax-its-better-than-you-think/
#5 Problem: Fiat is backed by a “proof of war” consensus protocol (the fiat system incentivizes war)
Fiat money allow wars with no real cost to governments, which is why the century of central banking was the century of total war, said Saifedean Ammous, a professor of economics at the Lebanese American University.
“Under hard money, governments fought till they ran out of their own money. Under easy money, governments can fight until they completely consume the value of all the money held by their people,” wrote Ammous, a member of the Center on Capitalism and Society at Columbia University.
source: https://www.rt.com/business/452445-fiat-hard-money-wars/
Bitcoin - and Bitcoin only - disincentivizes war by reducing the potential return on investment of invasion (small or larger scale) by hiding wealth behind an encrypted digital “China wall”. War would also be much harder to finance on a global Bitcoin standard. Fiat is a vote for world war. Bitcoin is a vote for world peace.
War is the globally adopted Proof-of-Work social consensus protocol that nodes (countries) use to validate the legitimate state of property and its chain of custody. Militaries project force across time (i.e. energy) in a fundamental game of probability to trigger a capitulation event. This is functionally identical to Bitcoin PoW miners projecting energy to probabilistically trigger the end of each block.
The reward for militaries that succeed in probabilistically triggering capitulation, is that participating nodes (countries) will grant consensus to the military host’s claim over what the legitimate state of property is. Thus, the history of warfare (and its corresponding chain of custody) is literally just a PoW-backed blockchain. Ever noticed how the reserve currency (i.e. the globally-legitimized state of property) belongs to the country with the most powerful military? That isn’t a coincidence. Society instinctively values PoW as the “fair” consensus mechanism. [...]
Said another way, bitcoin adoption represents the opportunity to partition our current state of property (i.e. our existing economy) onto a “new” blockchain that would hot-swap our current PoW-backed social consensus protocol (war) for bitcoin PoW as a surrogate consensus protocol, and dramatically reduce the functional utility of militaries/war/violence. This makes global bitcoin adoption a potentially highly disruptive and powerful technology of US strategic deterrence…
No need for kinetic warfare when we finally have a perfect 1-for-1 functional surrogate to war where nation states can hash it out (pun intended). Bitcoin is digital violence. It obsoletes messy, analog physical violence and is the ultimate “peacekeeper” missile.
Sources and further reading:
https://www.amazon.com/CURSE-FIAT-MONEY-American-Revolutionary/dp/B08HTG66V6
https://cyberplayground.org/2022/04/24/jason-lowery-bitcoin-is-worth-every-watt/
#6 Problem: Electricity to heat buildings and water is expensive
Bitcoin - and Bitcoin only - provides a solution where households, div industries and office buildings stand to make profit while capturing the excess heat from Bitcoin mining to heat water tanks, pools, rooms and whole buildings.
In short, Bitcoin mining allows you to make money while generating large amounts of heat that can easily be captured and used for whatever:
Sources and further reading:
https://bitcoinmagazine.com/business/how-to-heat-your-home-with-bitcoin-mining
https://bitcoinmagazine.com/business/getting-paid-for-home-bitcoin-miner-energy
https://braiins.com/blog/controlling-home-temperature-bitcoin-mining-heat
#7 Problem: Spam and malicious attacks in cyberspace
Bitcoin - and Bitcoin only - can defeat spam and serve as a cyberdome defense system for all sorts of software.
The proof of work protocol is already effectively protecting all wealth stored in the Bitcoin network, and it can be used in clever ways to protect all sorts of things:
Sources and further reading:
https://mutuallyassuredpreservation.com/
https://cyberplayground.org/2022/04/24/jason-lowery-bitcoin-is-worth-every-watt/
Conclusion
As you understand from the above, Bitcoin is far from being only “magic internet money”. It solves extremely important real world problems in ways that no other innovations can, and it’s already doing it as we speak in many cases.
Please help spread this article far and wide, and comment below to give feedback.
I will update the article when new use cases are discovered, so please feel free to provide URLs to things you want to see included in this summary article.
Finally, if you want to quickly learn the fundamentals of Bitcoin, check this video and article/book:
https://vijayboyapati.medium.com/the-bullish-case-for-bitcoin-6ecc8bdecc1
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I really appreciate what you're trying to do with this article! There's a lot of work to be done, surely, and I think you can do a sort of series exploring the different aspects of what you're bringing up (human rights, POS vs POW, etc.).
On a sidenote (something you can consider including in this article, if you'd like!):
Bitcoin's especially unique from other altcoins because it's a platypus -- it's scarce like a commodity, splittable like a stock, can be a reserve currency, etc... it's fulfilling multiple needs at the same time, in a verifiable and SECURE way.
(From: https://www.forbes.com/sites/spencerbogart/2017/12/03/bitcoin-is-a-platypus-the-story-of-category-creators/)
All the best! Earned a new subscriber :-)