Tails You Lose

Every passage, on the record.

1. 00:00Claim

   There is an attack on mining, an attack on energy usage from individuals who have a stake, an incentive to prop up the legacy system. They have benefited from the system as it stands now, from the ability to access cheap credit for extended periods of time while you slowly siphon away the energy of the unwashed masses.

2. 00:38Claim

   Those individuals have a huge incentive to put Bitcoin mining into the category of negative energy usage that should be stopped at all costs, and we're still at the stage in Bitcoin where there's so much misunderstanding about what the energy usage means inside the network and how it is actually facilitating a more valuable commodity.

3. 01:09Event

   It just seems like it's top of mind at the moment with a Wall Street Journal, or New York Times, sorry, article about Bitcoin mining.

4. 01:09Reference

   Pierre had a fantastic video just showing how ridiculous the accusations were, not only were they misinformed, but just from a first principle sort of look at exactly what's happening with the energy that is being used.

5. 01:09Claim

   Telling someone what they can and can't use energy for, when they are willingly, voluntarily purchasing it from the market itself, is dangerous: it sets up a precedent where a number of things can come into question as to whether or not they are quote unquote good uses of energy, and how silly and dangerous that slippery slope actually is.

6. 02:11Claim · condensed

   The name Bitcoin mining automatically has some sort of negative connotation, because it brings to mind traditional physical mining, whether gold or any other precious metal, and the amount of damage that can occur when it comes to mining.

7. 02:42Idea

   The Bitcoin system, when we talk about mining and the energy that goes into the system to produce the hashes, is actually building a wall around itself. That's what Bitcoin is doing, and it's doing it for security reasons. It builds the wall in the informational realm rather than the physical one.

8. 03:15Analogy

   You can easily understand how useful energy is when it is transformed into a wall in the physical world. You are forcing individuals who would like to gain access to whatever is inside that wall to expend the energy to either overcome it: climb it, scale it, blow it up, knock it over. That is what you are doing when you build a wall in physical space.

9. 03:46Claim

   In the informational realm, when you build up this wall of encrypted energy, you are forcing an attacker who would like to tamper with this immutable ledger, the thing that makes sure everyone is playing by the same rules. The bigger the wall, the more useful Bitcoin is, because it is able to build trust within the participants, which leads to more exchange, which leads to more specialization, which leads to more energy reserves for the extended order.

10. 03:46Quote

    The bigger the wall, the more useful Bitcoin is.

11. 04:26Claim

    The bigger the wall, the harder it is to scale, the harder it is to overcome, the more energy is going to be necessary to overcome it. Just like in the physical world, you would never accuse someone of wasting energy by building a wall if they had something they wanted to protect.

12. 05:08Claim

    Energy is hard to get. In the physical world it's very hard to build up energy reserves, because there are physical laws to the universe, and one of them is that you cannot fake energy reserves: you actually have to have the energy to transform energy in the first place.

13. 05:38Claim

    It's difficult for individuals to grasp that the energy being plugged into the ASICs to run the SHA-256 algorithm, which produces the hashes, is actually building, constructing a wall in the informational realm.

14. 06:16Analogy

    What if we could electrify the process of wall building in the physical world? We would remove the only thing that slows or impedes our ability to build walls, which is the human aspect, the physical aspect. If we removed the human element, of course we could build it faster.

15. 06:50Claim · condensed

    We are removing impedance in the process of the creation of real energy moats, energy moats being just something that ensures we are forcing attackers to expend a certain number of energy units. The electricity used for Bitcoin miners emits zero CO2 themselves into the atmosphere.

16. 07:23Quote

    The most pristine ledger that, for at least the first time in known history, introduces an economic constant, very similar to physical constants.

17. 08:05Idea

    It is the TASOE, the loop that finally closes around the energy reserves of the extended order, is Bitcoin. That's the idea. That's what we have here. That is what has been created. That is what emerges from the system.

18. 08:39Claim · condensed

    The attacks always come down to the same argument, that proof of work's drawbacks are high energy consumption and the potential for centralization as mining becomes concentrated in the hands of many large players, and this has been debunked over and over again.

19. 09:13Claim

    The higher energy consumption is exactly why proof of work is a good thing. The more energy, the better the system performs for the extended order.

20. 09:13Reference

    The questions we have to ask are as simple as those laid out by Thomas Sowell, which are three questions: number one, compared to what? Number two, at what cost? And number three, what hard evidence do you have to support your position?

21. 10:15Claim

    We don't have to worry about ledger control getting centralized under proof of work, because that is the design preference in a proof of work system, sorry, in a proof of stake system. We don't have to talk about the fiat system separately, because the fiat system is a proof of stake system.

22. 10:15Quote

    The fiat system is a proof of stake system.

23. 11:19Quote

    It takes energy to make energy.

24. 11:54Prediction

    As energy itself becomes cheaper through the advantages Bitcoin mining offers, the explosion of new energy transformation will be like nothing we've ever seen, creating significant efficiencies across the board for every member of the extended order.

25. 12:31Claim

    With proof of stake systems, the costs are more obscure and far larger. There is significantly less energy used to operate a proof of stake consensus, but that's because it is doing a very different thing: validators with enormous control over ledger entries and validations, based on the number of tokens they control.

26. 13:09Quote

    It's a digitized version of fiat with the privileged few having control over the great unwashed masses.

27. 13:39Claim

    This is costly to the extended order, far greater than the energy that goes into proof of work, because it doesn't allow for near as much prosperity, innovation, or advancement in energy transformation. The centralized power results in a large reduction in productivity as mismanagement and inefficiencies lead to gross mishandling of energy reserves.

28. 14:12Claim · condensed

    The extended order suffers from a system that provides less accurate price information to the market, which leads to energy misallocation, and that is compounding, because when energy bleeds out through inefficiency you lose not just that energy but all the multiples that would have been unlocked had it been properly stewarded.

29. 14:47Quote

    Every country that has low energy usage has worse living conditions than the alternative.

30. 15:18Claim · condensed

    The evidence for why energy spent on erecting the biggest security wall ever conceived is worth it: Bitcoin is lower cost and more efficient than the current system, more inclusive, easier to navigate and operate, more distributed and more energy efficient, and it cannot be corrupted or tampered with, with a known supply and total transparency.

31. 15:51Claim · condensed

    Proof of stake could work, and it has worked up until now, but it worked until there was a better alternative. We are at the end of a proof of stake cycle, as more and more of the extended order's control points are transferred into the informational realm.

32. 16:22Analogy · condensed

    Power can control through restrictions at a very local level, and it gets easier and easier to go from local control down to user level control, as accurate as a Social Credit Score, a la China, where you need to say five nice things a day about the state before you can buy your bus ticket home.

33. 16:22Quote

    You need to say five nice things a day about the state before you can buy your bus ticket home.

34. 16:55Claim · condensed

    If there are people in charge of the ledger, you have to appease them, because if you don't, it's ruin. You cannot ensure they won't change the ledger at any time for any reason, and you don't have a choice, you don't have an exit.

35. 16:55Analogy

    We need to treat the extended order like a tool itself. We need to make sure it has all of the best of the ingredients that make up the health of the system when combined, and one of those pillars is energy access and transformation.

36. 17:30Open question

    I don't want to go into too much detail here, so I've done that in past episodes. But it's just a refresher to go back and think about why there are these attacks on Bitcoin and what they're actually saying.

37. 18:01Claim · condensed

    The energy that goes into the Bitcoin system is actually making it stronger, ensuring more trust and protecting all users indiscriminately, not just a single special user. Every single hash that goes into the system builds the wall that much higher.

38. 18:31Claim

    Because the system is permissionless, anyone can just start doing it no matter where they are, which means the market incentivizes individuals to be at the top of their game, because if they are not, someone else will be.

39. 19:01Claim

    If someone is going to try and attack the system, they quickly realize they are better off joining it, especially if they have a more efficient way of doing it, because no one else can try and take over the system without access to that same energy.

40. 19:01Quote

    So it's tails you lose, or heads I win. That's the system that Bitcoin creates.