Digital currencies are formed of energy. Every eCoin is, in essence, nothing more (or less) than captured electricity. Inasmuch as the energy required to “mint” an electric dollar is trapped, never to be re-released into the world as actual power, the value of it is measured against what its captive energy otherwise could have powered.
One Bitcoin takes 145,000 kWh to create. Each subsequent transaction, fractional or otherwise, then requires around 200 kWh. Zap zap goes the cash register.
We turn food into fuel (see: corn into gasoline), so why not electricity into money?
⚡️ ➔ 💲
Current is now currency.
Like water into wine, that is one weird trick, man!
In order to pay for the energy (i.e., electricity) required to create and maintain digital currencies, EVERYTHING you do online (say, texting an eggplant to your partner, or hitting a thumb-up on Footbook), and pretty much every step you take IRL, will have to become a monetized block-chain micro-transaction.
The only things that might cost you nothing are your own bodily functions. Even then, while taking a dump will always be free, flushing it down will come with a per-flush microcharge. The days of the extra “courtesy flush” are probably numbered.
Welcome to the fusty future.
In a digital currency world, most people populate the lower of two classes (a la the Black Mirror episode where underground plebs ride bikes all day to power a sunlit upper class world). If you’re lucky, you’ll gain the ability to convert your kinetic presence in the physical world into personal grid energy, and thereby gain the ability to acquire or “mint” your own currency as you move (current-cy, as it were). With enough luck, you may graduate to the Premiere League before your body gives out.
Most of us, however, will be stuck in a constant battle to break even on the energy we consume, leaving us in a lifelong self-perpetuating energy deficit (an “electric debt” if you will). You’re essentially today in the precursor of that world every time you are forced to watch an ad online.
Lol maybe 10 years out, the cheapest electricity plans will project ads from lightbulbs on walls and ceilings as they turn on. The video will be compulsory, but fancier dimmer switches will offer simultaneous volume controls (these ads will not be silent) and perhaps a skip button.
The upside is that there’ll be no need for bluetooth speakers when your lighting system is also your stereo system. As lights flicker to full brightness on the low-end plans, however, the end of fixture power-up cycles will come with sonic branding for utility companies that you can’t mute.
🎵 “ConEd lights the wayyyy!” 🎵
Right now, if you make enough scratch (or have enough credit), you can do and go pretty much whatever and wherever you please. What happens to your mobility, however, if the only way to make money is to be a net-producer of energy, even on the most micro-economic level?
Most labor today does not produce energy, and is worthless to the future, where the means of energy production will be consolidated in a tight set of tiny hands.
IRL movement is easy to restrict by capping the amount of energy anyone can self-generate. The underclass will be the literal “power-less,” and their movement, online and off, will exist only to support the lifestyle and longevity of the “power-full.”
Up to now, the point of any marketplace transaction was to trade a service or a good for another service or good of equal value. “Money” was invented to mediate these exchanges, to provide a concrete, standardized measure of the relative worth of anything, so that trade is fair.
The “value” of today’s fiat money, however, is in what it buys, not in what it’s made of, i.e. “backed by.” You can thank the mass abandoning of gold and silver standards in the 70s for this.
From energy’s POV, in terms of material worth, a $100 bill and a $1 bill require exactly the same amount of physical resource (paper, ink, electricity, etc) to create. They are “worth” exactly the same on paper, because they are made of the same literal paper.
What happens, though, when energy becomes the currency? What if instead of your selling your skills and talents on an open market to the highest bidder for a fixed amount of money (that is, a “salary”), your labor and skills and efforts are valued only against how much energy you return to the system at the end of the day?
Plenty of people save money. It’s not easy, but with discipline, savings accrue. It’s much harder, however, to become an energy supplier, no matter how much power you try to save.
ConEd doesn’t bank any electricity you “conserve” for you to draw down later. That’s one of the great ruses of the energy delivery systems under which we operate. Don’t get me wrong – you’re doing the right thing by the Earth by consuming with more efficiency and intelligence. You’re not, however, “saving” energy by jacking your thermostat up to 80 on a 90-degree day. The energy you don’t use today isn’t free for your consumption tomorrow.
You save money, of course, by using less electricity. At the same time, though, if everyone turns off their lights all at once, ConEd makes no revenue. In this way, energy monopolies add up to one big fat perverted paradox. And nothing changes if the energy’s “cleaner,” as long as it’s still just one company flipping the master switch.
The future’s kinda bleak when you realize that Bitcoin turns Consolidated Edison into the Federal Reserve. God help us all, indeed.
Digital currencies aren’t just financial instruments. They are perfect social instruments. They’re an even better vice around your balls than taking cosa nostra cash to open a bingo hall.
Even the IRS has got nothing on a CBDC.
The tax code at heart is a behavioral code. Marriage penalties, mortgage interest deductions, investment loss-carry forwards, child credits, etc. are each designed to encourage or discourage people from doing specific things (staying single, buying a house, having children, selling stocks, etc).
A Central Bank Digital Currency pulls the codes of conduct upstream. Where the current taxation system rewards or penalizes things you already did, a CBDC mandates your behavior ahead of your choices, because it can deny forward transactions based on your movement, beliefs, morals, and worldviews.
The IRS, for all its power, cannot keep you from, say, buying as many houses on the open market as your liquidity or margin will allow. A CBDC, however, can look at your lifestyle, determine that you don’t eat enough kale or that your selfies just don’t rank, and disallow your real-estate investment.
“We’ll, hello,” says the Computercoin. “Your vegemite sandwich speaks my language.”
In a world where you can’t trade your skills for money, what will your skills be “worth?” What can you trade yourself for?
The rise of OnlyFans is starting to make sense.
In the near future, you are only “worth” the amount of energy you can create (which, fwiw, is the net amount after subtracting the amount of energy you consume).
In a digital currency world, every marketplace transaction is in the energy business. Every move you make needs to be in service of creating energy, to make more currency, to create more energy.
Control the energy, control the currency. Control the currency, control the energy.
⚡️ 🔄 💲
Beyond that, the scary about digital currencies isn’t that they track everything you buy, it’s that they track everywhere you go. And just as easily as they can deny a transaction, they can fix you in place.
The difficulty and time taken to produce digital currencies also can fix the amount of currency in circulation, creating value through scarcity, but their ability to limit movement is what makes authoritarians drool. By fixing people in place, a CBDC can fix the number of economic and social classes, and limit mobility, up or down, or out of town.
People with enough, say, Bitcoin, will not only have enough money to buy the energy to make more Bitcoin. They will also be the only people with unrestricted freedom of movement.
That deli with the best turkey club sandwich may be 100 feet outside your designated purchasing zone.
“Your coins are no good here, son.”
ClubHub won’t even be allowed to deliver it to your residential sector. You’ll eat the turkey club you can, not the one you want. Eventually, with no reference point, you won’t know the difference.
Lol Enron was the first attempt at a disintermediated currency based on energy.
Electricity sales had for decades been the job of local utility companies, operating as monopolies and selling power at regulated rates within their service areas. (Enron) conceived a different model in which power could be sold by generators or middlemen to big corporate users or utilities in faraway regions, at whatever price the market would bear.
The “smartest guys in the room” thought a true decentralized financial exchange could be created within a free-market system. Back then, however, there was no way to account for that in an SEC filing, and boy did the smarty pants pay the price.
Of course, casting the Enron disaster as an “accounting scandal” buried the decentralized elephant in the room. No shit they had to invent their accounting as they went. There was no precedent, and no way to fully assess the value of what they created. What they sired, though, was the first disintermediated currency based on the commodity that drives modern human existence. Enron’s “exchange” threatened every economic underpinning of today’s multipolar world.
Ring familiar, doge?
Governments took note, of course, that a fully deregulated energy system can act the same as a fully regulated energy system. In each case, prices can be made to skyrocket or plummet on whim in order to encourage or suppress the generation of more energy. Downstream consumers lose in each scenario, but whoever controls the supply chain of energy, from drill to pump, from substation to socket, wins the ability to dictate the rhythm and flow of all life. Every transaction in the universe can be judged on its energy consumption.
When you pay for your Subway foot-long with a digital currency, you are not paying for the sandwich. You are paying for the energy required to produce every component of the sandwich. In a digital currency world, no price is fixed, because the costs to produce those components fluctuates moment-to-moment. Enjoy that foot-long whenever you can afford it, because it will never cost the same amount twice.
…(Energy) is not like bananas or copper. Electricity is a precious resource; it’s, to some degree, a public good. We couldn’t have the modern economy without electricity; I can go without bananas for a while.
There was no blockchain in the Enron era. The quantum computing power we have now to sustain the chains, though still in its dawning state, was pure theory.
If blockchain tech had existed in the 90s, Enron would be considered to finance what Tesla today is to transportation, and Jeff Skilling would own Twitter.
So yeah, in a few ways, Bitcoin is Enron’s revenge. Maybe it’s no coincidence that CBDCs are all the rage on the heels of Skilling’s recent release from prison…
In any event, as Warren Zevon told David Letterman, “Enjoy every sandwich.”