Original | Liu Jiaolian
It’s June again. As BTC ( Bitcoin ) temporarily hovers around 66k, Jiaolian convened a meeting of Planet VIP members to review and look forward to the future (see {6.16 Internal Reference: Mid-year Private Board Meeting Held, In-depth Discussion on Value Closed Loop}).
At the meeting, Jiaolian analyzed the foundation of BTC's value and the essential difference between it and the "sheep's head" (i.e. meme ) widely used by Altcoin and meme coins, such as "fair launch" and "decentralization". From this, it was extended to explore why BTC is irreplaceable as a value storage and "measurement". Furthermore, Jiaolian put forward different views from the mainstream on the future development direction of the so-called blockchain technology, or smart chain.
If you think through this, you will be able to see through the following common misleading rhetoric in the industry:
1. Look at this coin, it adopts "fair launch", no pre-mining, no front-running, no internal allocation, everyone starts together, and starts minting at the same time, it is truly 100% generated by the community, as fair as BTC! In this way, it is "very valuable".
2. This chain uses the advanced PoS (Proof-of-Stake) consensus mechanism, which is not only greener and more energy-efficient than BTC PoW (Proof-of-Work), but also has research papers proving that it is safer and more decentralized than BTC PoW! Therefore, it is "100% valuable", even "more valuable" than BTC.
3. Look at this memecoin, the total amount is limited, there will never be additional issuance, the smart contract code is hard-coded, and it is verified on the chain. No one can tamper with or issue additional coins, and it will directly reach the final state of BTC when the additional issuance ends in 2140. Going further, it may not only have a limited total amount, but also a more powerful "burning and destruction". This time, not only will there be "no additional issuance", but there will also be "continuous deflation", which is more "hard" and "scarce" than BTC! In this way, it is "extremely valuable" and is an invincible existence that is "to the moon".
There are many more, too many to list here.
You will find that the characteristics of these rhetoric are all borrowed from a feature of BTC (its charm), a factor worth imitating, and then extracted into a "meme", and then publicized that the things they promote also have this same "meme", thereby achieving the ultimate goal of using the "meme" of BTC as a "sheep's head" to sell the "dog meat" of the shit coin they promote, and "cheating" the BTC or stablecoins in the other party's pocket.
In Jiaolian’s view, the starting point of BTC’s value, or the source of its value, is not these characteristics, these memes, or these charming aspects, but the PoW (Proof of Work) behind all of this.
Or to put it more concretely, it is the energy consumed by PoW. From the perspective of some people’s subjective value judgment, it can also be said to be “wasted” energy.
Yes, the value of BTC lies precisely in the “waste” of energy in its production process. It is a kind of “waste” value.
Is it hard to understand? Actually, it is not hard to understand if you change your perspective.
All human behaviors inevitably consume energy. Making steamed buns consumes energy, building cars consumes energy, launching rockets consumes energy, and even watching videos consumes energy...
But why don’t we define this energy consumption as “waste” energy? Because this is just a value judgment made from a human perspective.
In the eyes of a pig, the energy consumed by humans in watching videos and launching rockets can undoubtedly be called "waste".
In the eyes of Sun Wukong, who is flying in the clouds, the energy consumed by humans in building cars can definitely be called "waste".
In the eyes of gods or immortals who can live forever without eating grains, the large amount of energy consumed by humans to grow wheat and steam buns is also quite "wasteful", destroying the cosmic environment, accelerating the increase of cosmic entropy, and moving faster towards cosmic destruction...
From the perspective that the product, namely BTC, cannot be eaten, cannot be worn, and cannot satisfy any of people's physiological and psychological needs, BTC is indeed more likely to be subjectively regarded as a "waste" and a "net waste".
However, from the perspective of cooperation and division of labor in human society and the development of human civilization, this huge "net waste" is actually a very necessary and valuable waste!
Because, when human society's economic activities become more and more close, human civilization develops to a higher level, and human's control over energy (the measure of cosmic civilization is the rate at which civilization utilizes galaxy energy) continues to develop, human society's complex economic activities, as mentioned earlier, each economic activity is "wasting" the energy of the universe in exchange for some product that is useful to mankind and meets human needs. It will inevitably call for a standard, pure "waste" to compare and measure the "waste" of energy in all these economic activities, thereby guiding people to evaluate and grasp the relative value and exchange relationship of each product (commodity) in free exchange activities.
This scale of energy consumption is the measure of economic value. Just like "meter" is the measure of length and "kilogram" is the measure of weight, BTC is the measure of all economic value.
Previously, Jiaolian shared an article titled "Five-Minute Bitcoin Popular Science (Cartoon Version)" (2024.4.27). Friends who have forgotten can click in and read it again. It mentioned that in the early days of human civilization, people used carefully polished shells as currency. The principle is that polishing shells requires labor, and when shells are exchanged for other labor products, such as fish or grains, it serves as a unified standard for evaluating and measuring the time and labor consumption of all other productive labor.
Today, we have evolved into the era of fiat currency.
Readers may ask, why can’t this thing used as currency be produced at zero cost or low cost, such as paper money, meme coins, or PoS coins, but must be something like shells in ancient times, gold later, and BTC today, which "wastes" huge manpower and energy to produce?
Because only the energy consumption that is a fait accompli (historical), physically irreversible, and naturally objective (materialistic) can be compared with other energy consumption processes. In God's eyes, all the money that is printed without "wasting" energy is given a fictitious value by humans (corresponding to a certain amount of energy consumption, but in fact there is no such thing), and through coercive means, it is a so-called "equivalent exchange" (in fact, it is not equivalent at all) with other products that actually consume energy. This is really the biggest "eye-catching trick".
The production process of BTC, a pure energy "consumption" or "net waste" that does not produce any practical value, can condense into a product BTC. This product is the most suitable measure for comparing and measuring the value of the products of all other energy "consumption" or "waste" processes.
Therefore, the "net waste" of BTC is not a waste, but a value. Just as Satoshi Nakamoto said, "not having bitcoin is a net waste."
Before the advent of the information age, there was a famous statement: Money is not naturally gold, but gold is naturally money.
After the advent of the information age, we can perhaps make the following argument: Currency is not naturally BTC, but BTC is naturally currency (a measure of value). The key point is the word “natural”.
The surface value of legal tender is not so much its accounting value as it is its violent value of "forcing" people to accept it.
Therefore, why is it impossible for BTC to be replaced? (Unless it destroys itself and makes a major mistake in its own evolution, such as abandoning PoW and switching to PoS, haha)
Because the "consumption" or "waste" of energy is a one-way process in thermodynamics, it is irreversible and cannot be recovered once it has been poured out. Most importantly, it is huge!
The amount of electricity consumed by the world to produce BTC each year exceeds the electricity consumption of many small countries. The real money spent exceeds the military expenditure of many small countries and all the top 30 countries in the world. Hundreds of billions of dollars are "wasted" every year. For data on this aspect, please refer to the article "Bitcoin's "Defense Expenditure"" published by Jiaolian on May 19, 2024.
As long as BTC does not collapse, the rational choice for human society is that there is no need to abandon the "waste" of BTC, start over, spend hundreds of billions of dollars, spend more than ten years, and "waste" huge energy just to create a substitute that is not much better than BTC, at least not as good as BTC is better than gold.
In comparison, how difficult is it to abandon a memecoin and start over, and how much does it cost to turn a "waste" into a real "waste"? In the eyes of Jiaolian, it is very small, very small, really too small. It is usually unlikely to exceed 10 million US dollars.
In comparison, how difficult is it to abandon a PoS chain and start over, to create a forked chain, and how much is the cost of eliminating and "wasting" the old PoS chain? Jiaolian thinks that it is not very large. Usually it will not exceed 1 billion US dollars. It is less than 1/10 of BTC's "net waste" in a year.
So, why is a copycat a copycat and a meme a meme? Even if they imitate BTC very closely, very vividly, or even seem to be "better", if you look through the phenomenon to the essence, the cost of all these imitations is very small, and you will completely understand that all these superficial articles are just paper-made flower frames, deceiving ghosts, and worthless. At least, the value is far less than what its promoters claim.
As for the so-called surpassing BTC, outperforming BTC, haha, whoever believes it is a fool. - Unless it can really prove that the "net waste" it causes every year is much more than what BTC "wastes"! And this is almost impossible! BTC has been criticized and suppressed for its "net waste". Can you create an unproven thing to "waste" much more energy and real money than BTC? Which country or region can allow such a thing to exist and develop?
The conclusion is obvious: BTC is irreplaceable.
After thinking through the above problems, let’s go back to the surface and return to the “meme”. In fact, all the “characteristics” are just means to preserve the value created by the “net waste” of PoW so that it will not dissipate or disappear.
That’s right. PoW is the root of value. Other things, such as token issuance formula (model), decentralization, etc., are all means to preserve these values for the longest time. PoW (proof of work) is the soul of BTC.
The starting point of BTC value is PoW, which absorbs negative entropy from the natural universe, and after a series of cleverly designed means to avoid value dissipation and make the shelf life infinite, such as constant total issuance, decentralization, etc., it finally reaches the end point and is loaded into the value storage symbol BTC. This is the closed loop of BTC value movement.
(Official account: Liu Jiaolian. Knowledge Planet: reply “Planet” to the official account)
(Disclaimer: The content of this article does not constitute any investment advice. Cryptocurrency is an extremely high-risk product and there is a risk of it returning to zero at any time. Please participate with caution and be responsible for your own actions.)
