The concept of "storage of monetary energy".
31/08/2023 12:28 • MACROECONOMICSThe concept of "storage of monetary energy" is not a commonly used financial or economic term in books.
It is a new concept that is elaborated, or rather adapted exclusively for BTC, as if BITCOIN were an asset class in its own. Or possibly an hybrid asset class.
The term mainly refers to the union of two concepts.
The concept of "store of value" and the one of "energy optimization" NECESSARY to ENSURE THIS VALUE, thus making BTC NOT manipulable by any government or other entity, (there is no CEO, or manager), and most importantly, making STABLE , SAFE, CONSTANT and RESILIENT its technical functioning.
BITCOIN is seen by some as a RESERVE OF VALUE, thanks to its KNOWN AND PREDETERMINED scarcity (21 millions btc, minus any BTC lost forever over time), but it is also considered by others as a kind of COMMODITY, where there is the need for these BTCs to be mined and the transactions need to be continuously validated.
Within this mechanism, in order to "survive" in the MINING market, BTC miners are ENCOURAGED to develop increasingly performing and efficient strategies also from an ENERGY point of view.
They have to find the most efficient hardware, the best locations, and they also have to meet certain environmental parameters.
In summary, less efficient miners are naturally eliminated from the market.
SO, it is NOT true that BTC could be compared to any currency not anchored to nothing after 1971 (commonly called FIAT), but in reality there is something that physically gives it VALUE, and this something is the decentralized network of the blockchain of BTC and the mechanism that allows its constant operation 24/7 without interruptions, and therefore finally, also the energy necessary to make everything work.
The fact that there is a connection between energy, network, and value in monetary terms is a key concept to truly understand BITCOIN.
Clearly, the larger this "decentralized network" becomes, the more it becomes used, and the more value it assumes, as well as becoming even more SECURE.
To conclude, the concept of "monetary energy storage" shows how Bitcoin is a unique technological-financial innovation, which combines aspects of store of value, PHYSICAL and REAL connection with energy, and energy efficiency and of course decentralization.
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