“Switzerland consumes about as much electricity as the Bitcoin network! It's an environmental disaster! We should ban the use of Switzerland immediately!”

Here’s why this proposal actually makes more sense than banning Bitcoin.

“If there is an escape, that escape will be used”, Christine Lagarde said. The president of the European Central Bank wants a regulatory framework for Bitcoin. She ought to have figured out that she can't do much about it at this point. This is one of the most common misconceptions about Bitcoin. That someone, somewhere can do something about it.

No one can do anything about Bitcoin, not Christine Lagarde, not Switzerland and not the UN.

There’s no one in charge of Bitcoin, and there’s nothing anyone can do about it.

These people ought to be a little more humble in their approach. A local ban on Bitcoin will make the users in that jurisdiction move to a more friendly one. The more friendly the place, the more that place will thrive from having a lot of Bitcoiners there. A restriction on electricity use might force the local miner to close his business. But at the same time, it will make the process more profitable for other miners elsewhere.

Satoshi designed Bitcoin to thrive in adversarial conditions.

Attacks against it will only fortify its immune system. An immune system made up of individual nodes all around the world. This system ensures that there will never be more than 21 million bitcoins available. Absolute digital scarcity. Unforgeable production costliness of a monetary good. Humanity has never had that before. Nation states and central banking have been around for eons.

What is a central bank and what does it do?

A central bank is a centralized institution that issues a nation state’s money. Usually in exchange for government bonds. Bonds that are a promise from the government to pay back the loan at an unknown point in the future. However, that money is owed back with interest. So for every $1 created, more than $1 is demanded to be returned. But because of the interest on the loan, there’s never enough fiat money in circulation to pay it back.

Fundamentally, the system must always owe more money as debt than there is money that exists. There is never enough fiat money in circulation to pay it back. This is always the case when banks conjure fiat money into existence.

Fiat money is debt.

The prevailing economic theory behind the mechanics of money, states that this is a good thing. It keeps people incentivized to spend their money. Fiat economists believe spending to be a good thing, since every trade produces a new good or service. And there’s no limit to how many times you can spend a 100 Euro bill, right?

Well, spending can be good for an economy but it doesn't have to be. An investment in something that can produce value in the future is a good thing. Wasteful consumption for consumption’s sake, is not. It’s the illusion of economic progress rather than actual economic progress. The damage central banking has done to the world is immeasurable. And every country in the whole world still believes its untruthful promises.

The scourge of consumerism

What we live in today is a world based on consumerism.

Wasteful spending at the expense of future generations. No wonder we have environmental problems. Production and transportation costs are lower than ever. The vectors all point in the same direction. Zero marginal costs. But fiat money already has a zero marginal cost and today's high prices are artificial.

The only thing that can give you a hint at how cheap everything is, is Bitcoin.

Its ever increasing purchasing power is a testament to how fooled we’ve been. The production of more junk is of almost no cost to the producers of that junk. It's costly to the consumer, but not as costly as not spending your money at all.

In a Bitcoin dominated world, we can all access the riches of the abundant future.

All we have to do is alter our time horizon. With Bitcoin, we can all get everything we want by saving money. It's that simple. But the real beauty of the system is that we’ll stop over consuming. Bitcoin’s dilution proof technology ensures that everyone stays disincentivized to spend. No one wants to let go of a monetary good that goes up in value over time. Everyone will be more careful with their money. This is what the world needs as well as what everyone in it needs on a personal level.

Bitcoin is a value battery

It's not the only way in which Bitcoin is good for the environment though. Most of the criticisms about its energy use focuses on the costliness of mining. But the critics are all missing the point. The energy cost for mining is what makes the system work. The miners are competing for a specific reward in the form of new bitcoins every ten minutes. The more miners that connect to the network, the harder the competition becomes. It gets more costly in energy terms.

But what is money if not energy?

Money provides humans with a tool for converting energy between different states. Your labor is a form of energy, as are the things you buy with the fruits from it. Furthermore, the cost of mining bitcoin is in direct proportion to its value. The more valuable bitcoin becomes, the more miners will come online. The more miners that come online, the costlier the mining process. The costlier the mining process, the higher the price of the recently found coins. It’s a positive feedback loop.

Money condenses energy. Bitcoin is the first and only tool we have for converting electric energy to monetary energy. Now what does this do to the energy market? First of all, miners will always search for the cheapest energy sources available. They all operate under an ever increasing incentive to cut their electricity costs. Renewable energy is the cheapest form of energy there is when it actually works. Right now, much of it doesn’t. It exists through artificial life support through government subsidies.

Bitcoin miners look for the real thing. To them, there’s no transportation cost to the electricity. Electricity is only transportable within a limited range from a power plant. But you can deploy a bitcoin mining rig anywhere. They don’t even have to be close to a human settlement. The ideal location would be a hydro electric plant by a waterfall in a cold country to cool the miners. The energy generated there wouldn’t need traditional means of transportation. It wouldn't need a power grid at all. The owner of the plant could instead store the energy in a value battery. Bitcoin is that battery.

Everything mankind ever invented saves someone time somewhere. That's why we invent stuff in the first place. You can exchange money for every other thing that was ever invented. This makes money the ultimate time saver. But only if it can keep its value over time. Bitcoin is the first and only type of money that can't have its value diluted by creating more of it.

The environment prefers Bitcoin

Now back to Switzerland. Or any other nation for that matter. What does a nation do? It leeches wealth from its population through taxes and inflation. It does this to pay for various consumer goods and services for its citizens. At least that’s what we're told by its propaganda machines.

In reality, the fiat monetary system always ends up rewarding those who know how to play the system. Not those that actually produce value for their fellow human beings. That is why taxes always go up, why inflation gets worse and why most people work more for less over time. It ought to be the other way around. Yet bureaucracy keeps on expanding to meet the needs of the expanding bureaucracy. Millions of people have jobs that contribute nothing to the advancement of mankind. Zero. Work for work’s sake.

Large institutions are inefficient, cruel and unfair, despite their often noble intentions. Democratic decisions are not moral. What the majority of a population thinks is for the most part unintelligent at best and pure evil at worst.

So, in conclusion, no one should strive to ban Bitcoin because of its energy use.

None of the energy used for bitcoin mining goes to waste.

It’s encapsulated forever in cryptographic amber. It makes way more sense to abandon nation states from an environmental perspective.