Ok, this comes up a lot and it’s an obviously valid point to question the sustainability of #Bitcoin but very few people properly grasp what happens when you play out the bitcoin project in the direction it’s clearly going. So, thread https://twitter.com/davidgerard/status/1358870766784294920

First off, I care about sustainability. I’ve designed and set up courses that teach sustainability to thousands of students in fashion industry in my previous life. I’ve dedicated quite a bit of time, research and teaching to it. So, HOW CAN I SUPPORT BITCOIN THEN??! Well, 2/

In my life before that, I was a physicist, so I have a reasonable understanding of thermodynamics and really that’s what Bitcoin will eventually come down to. The most thermodynamically efficient way of converting energy to money. 3/

This article rightly calls the Bitcoin mining game an arms race. It’s also fairly accurate to say that mining is a lot like a lottery. Every ‘hash’ is a ticket, which is just an arbitrary computation, if numbered low enough it wins. The more players the harder the game. 4/

That last bit is important. The ‘difficulty’ of the game increases the more hash power is competing for a block, which is adjusted upwards to keep block times steady and provide enough time for blocks to propagate to nodes in the network. And it’s got harder. A lot harder. 5/

The blue line is where the hash rate was in the article when it was written. Since then a HUGE number of players have joined the game. Why? Because it has been profitable to do so. For the most part (price dips make it even harder). 6/

But, it’s also got more difficult to play the game. When Satoshi mined the first block, difficulty was 1, now its 21.434 Trillion times harder. And it just keeps going. Bitcoin get’s more scarce, more in demand, more valuable and more players join. And it gets more difficult 7/

There’s two real ways to win this game: 1) have good mining equipment. Miners used specialised chips (ASICS) to do ultrafast computation. And 2) have very cheap energy. There’s other secondary stuff like location (cold is good), tech infrastructure, maintenance etc. 8/

1 - hardware) is coming to an end. Chips can only get so fast before we hit a technological dead, due to the hard limits of physics. So it all comes down to 2) Cheap energy. 9/

Now, the thermodynamics. If you’re wasting energy ANYWHERE, before you get it into your ASICS. You lose. Let’s say some oligarch gives you a free mountain of coal. You still have to shovel that coal into a furnace, burn it, move turbines, transmit it through wires etc 10/

The only way this game ends is by those harnessing the power we’ve got loads of. Solar energy. Mentally compare light hitting a solar panel plugged into a co-located ASIC and the guys moving a mountain of coal. Which wins? 11/

Now, the issue is the sun tends to go to sleep at night, throwing a spanner in the works for Bitcoin miners using solar and every second your miners go to sleep is dead money in opportunity cost (in its purest form). This has slowed the solar mining farm design down. But.. 12/

If only there was some mega genius who’s spent decades perfecting battery technology with an energy company and unlimited money who loves #Bitcoin AND harnessing solar energy https://www.popularmechanics.com/science/a31350880/elon-musk-battery-farm/ 13/

Yes #Bitcoin mining is intentionally wasteful, yes it’s not often been green. But, using energy IS NOT BAD, it’s how you do it that matters and the Bitcoin game will only be won by those converting photons to money. Zoom out and look at the long game. FIN