Bitcoin miners are the monumental architecture of this century.
The defining characteristic of monumental architecture is a significant, human-made structure publicly employed by a society. Architecturally, the structure conveys a sense of awe, strength, and wonder.
Monumental structures typically require a lot of (historically coerced) human labor. The message sent by these structures is no coincidence. They send a "costly signal" to potential aggressors. Conspicuous consumption was the point. [1]
A handwritten thank-you card means more than a text; it is an example of a costly signal. It demonstrates that a certain level of effort went into the outcome. The intent is for monumental architecture to send a similar message.
The best way to avoid destructive violence is to prevent it from commencing. The most efficient strategy is deterrence. An intuitive sense of relative strength helps to avoid pointless conflict.
Monumental architecture historically has served as a signaling system for communicating the strength of society; it is the ultimate costly signal. An incredible amount of labor, cooperation, engineering, experience, and resources go into building monumental architecture—resources many societies cannot afford to allocate. It was the "flexible load" of the time. As long as excess energy (labor) was available, there was an infinite appetite to build. Monumental architecture is an intuitive and visible signal that a society can mobilize its populace to redirect its power if threatened.
Today, the hashrates of societies send a similar signal. It represents a public metric for a society's ability to harness energy efficiently, a universal key to sustaining life. At these mining facilities, the inanimate workers (ASICs) have replaced the historical use of animate labor. Coercion is no longer necessary; the work is consensual.
A society's hashrate represents energy levels they can allocate towards security. It also represents energy available for productive uses like manufacturing, desalinating water, producing green hydrogen, or stabilizing the grid if and when economically viable, like during emergencies, natural disasters, or periods of change and growth.
Moreover, as the game theoretic competition for a society to increase its hashrate continues, we will collectively build a greater margin of safety by increasing our flexible load. Through this process, we will acquire new knowledge, learn new skills, and improve our ability to harness more and more energy at a diminishing cost, much like ancient societies did.
Historically, building monumental architecture had positive externalities like teaching us to work more efficiently. Many skills were gained and refined by designing and building monumental architecture. The building process perpetually tested engineers, architects, and artisans to make larger, more efficient, beautiful, detailed, and resilient buildings.
Similarly, as the mining industry and incentives evolve, our brightest minds have begun to leave Wall Street to work on productive problems that benefit humanity, like harnessing, storing, and delivering energy.
Progressing energy technology is essential because energy security is the cornerstone of life. We tend to take what we have for granted until it is lost. Energy security is an excellent example of this cognitive bias. Energy security is yet to be universal, and still, those who feel secure today may not be guaranteed energy in perpetuity. Recent grid failures are evidence of this. Energy security for all is required for us to tackle increasingly exciting and challenging problems.
Buckminster Fuller observed that we tend to do the right things for the wrong reasons. He called it "emergence-by-emergency," meaning we have always needed an emergency or threat to mobilize our creativity. Destructive actions sometimes have positive externalities. [2]
Historically, the threat of war resulted in revolutionary technology like shipbuilding, refrigeration, GPS, nylon, penicillin, telegraphy, and jet engines, to name a few. Fuller understood the profound potential of a new incentive structure to advance humanity from "killingry-to-livingry" or to do the right things for the right reasons.
Bitcoin is the incentive structure that makes livingry more profitable than killingry. This new accounting system distributes the productivity gained through innovation and creative destruction to all of humanity. We can seek disruptive innovation in our own businesses when we all have an equity stake in the underlying universe.
There is evidence that this is how nature works. Nature is one of the best problem solvers—it has had the privilege of time to work out the kinks.
The environment is constantly changing, yet nature always prepares for the unexpected. Nassim Taleb provides the following example in the Lucretius problem, "The fool believes the tallest mountain in the world will equal the tallest one he has observed." Nature knows better. [3]
Taleb continues:
The former chairman of the Federal Reserve, Fragilista Doctor Alan Greenspan, in his apology to Congress, offered the classic "It never happened before." Well, nature, unlike Fragilista Greenspan, prepares for what has not happened before, assuming worse harm is possible.
It is a mistake to assume that the past will represent the future. Fuller liked to say, "Nothing about a caterpillar indicates it will turn into a butterfly." Nature deals with uncertainty by maintaining a margin of safety through energy reserves.
For example, our bodies reserve various fuel sources that we tap into depending on our needs. An adequate amount of fat is an essential part of a healthy diet. Our bodies store some energy sources we can rapidly deploy for immediate needs (carbohydrates). In contrast, others are stored for extended periods and only accessed after our body depletes other sources (fats). Our bodies have figured out an economical way to sustain a margin of safety. [4]
Similarly, deciduous trees will shed their leaves as they head into dry and cold weather to survive the harsh winter. They reallocate their energy into their roots as the environment changes. This behavior is similar to Bitcoin miners shedding some hashrate so the electrical grid can manage the added stress of a snowstorm. [5]
We can examine the cellular level for further evidence of this happening in nature. Adenosine triphosphate (ATP) is a molecule found in all living things and is considered the "energy currency" of the cell. When a cell needs the energy to do work, it releases one of its three (tri) phosphates and becomes Adenosine diphosphate (ADP) + 1 phosphate. The energy holding that phosphate together is released and available to do necessary work for the cell. [6]
ATP = ADP + Pi + energy
Our bodies manage a margin of safety by shedding some fat.
Deciduous trees manage a margin of safety by shedding leaves.
Cells manage a margin of safety by shedding phosphates.
Societies manage a margin of safety by shedding hashrate.
The Bitcoin hashrate is nature's way of providing demand response for our unpredictable environment without the devastating consequences of inflation.
Satoshi Nakamoto set an engine of global incentives into motion, and the outcome of a worldwide race for hashrate will, in turn, build out energy infrastructure by concentrating our brightest minds on constructive, rather than destructive, innovation. For the first time in history, we have begun to do the right things for the right reasons. The momentum is palpable, and there is no turning back.
Sources:
[1] Tainter, Joseph A. 1988. The Collapse of Complex Societies.
[2] The many works of R. Buckminster Fuller. www.satoshistudio.org
[3] Taleb, Nassim. 2014. Antifragile: Things That Gain from Disorder.
[4] Eberle, Suzanne Girard. 2014. Endurance Sports Nutrition. Third Edition.
[5] Conners, Deanna. 2017. Why do trees shed their leaves? www.earthsky.org
[6] NAU Online. Why The Body Needs Food.