July 6, 2022

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Bitcoin Environmental Tailwinds – 006

This is about Bitcoin’s environmental tailwinds.

Now, you might say “Max, hang on wait a minute- don’t you mean environmental headwinds”?

Well, Elon Musk just sent a tweet about it, saying it was bad for the environment. Let me catch you up on a little history. What’s happened in the last few months has blown away to the point where now the environmental concern around bitcoin is a massive headwind.

I should say that until this year- I have never ever included an environmental section on Bitcoin.

Bitcoin’s never given a damn about the environment. It came into the focus this year because of Elon Musk- and what transpired over the next few months was incredible. It looks like Bitcoin has a new third promise- to basically solve the world’s environmental issues. And you’ll understand that very shortly.

Click here to check out Max Wright ( A.K.A “Contrarian Dude” ) on Youtube!

So, a little bit of the history here. Elon Musk tweets out that Bitcoin is bad for the environment. That it’s creating a lot of pollution. There’s a little bit of merit to what he had to say- I didn’t think it was a lot of merit but a little bit. For this reason, 40 percent of Bitcoins mining power (what we call hash power) is in China.

Now let’s go back for a few definitions.

“The mining power or the hash power? What are you talking about, Max?”

Remember, Bitcoin is a decentralized computer network. My computer can be running Bitcoin software, your computer can be running Bitcoin software, people all over the world can be running Bitcoin software- and they’re just running the software.

They’re doing what’s called “mining”. They are providing the computing power to run the entire world network.

That is why bitcoin is always online, 24/7. The whole world over. It’s the most robust network the world has ever seen, because there are millions of computers all around the world contributing power to that network.

So much that- by orders of magnitude- Bitcoin is the largest computing network in the world. It’s not even close. Orders and orders of magnitudes, it is the most powerful.

Which is one of the reasons it is the most secure. The amount of computing power on the planet doesn’t exist to fight it, because there’s just so many people that are supporting the network.

Those are those are concepts for another day. So, we’ve got this computing power. 40 percent of the computing power is in China. Why? China doesn’t really give a damn about the environmental concerns. It doesn’t. it just doesn’t care. It uses the dirtiest of dirty coal to create electricity and then it subsidizes it for its people.

Some of the cheapest electricity in the world was in China, hence there was a lot of mining power in China. This because the miners just go to wherever there is cheap electricity.

Because, by a significant margin, electricity is the largest cost factor in contributing to the network. The hardware costs very little, what’s much more important and much more expensive is the electricity. Hence, cheap electricity and a lot of mining power in China.

The Chinese communist party, they are totally threatened by Bitcoin. “How will we steal from our people? How will we trap our citizens and their wealth here?”

See, one of the ways they do that is it’s very hard to get out of China, if you’re a citizen of China. The ones who do manage to get out they have to leave their wealth back at home, they can’t take it with them. It’s only the very high-end people who are granted that privilege, who are friends of the Chinese communist party.

The average “rank and file” struggle to get out of the country. They can’t get their wealth out. If they did get themselves out- they couldn’t bring their wealth with them.

Bitcoin solves that problem for them. It is a fight against tyranny. A very powerful one. And China freaked out- they tried to shut it down.

Now, if there were no other good solutions, it wouldn’t have worked. The mining would have just gone underground, in China. But there are lots of good options around the world. So, what happened?

Almost, you know with a very short span of time (I’ll say overnight) but really in a very short amount of time; all the bitcoin mining power just got turned off in China. And over the next few months, they start sending these mining machines all over the world.

Because there’s plenty of other people who would take them and because it’s a very good thing that you want in your country. You’ll understand more about why in just a minute.

Quick side note- can you imagine what would happen if 40 percent of the power in Wall Street was knocked out for two months? Markets would tumble. Businesses would be destroyed. It would be absolute carnage.

This was the largest migration of computing power in the history of the world and the bitcoin network didn’t skip a beat.

It didn’t stop working. It worked perfectly, for all users 24/7, the whole time. It was really a shining moment for Bitcoin history about just how robust it is and how impossible it is to shut down.

It doesn’t matter if you shut down 40 percent of the network in one day. It doesn’t matter. It just doesn’t matter. The network continues. You can shut down 80 percent- it’ll still work. It is a very powerful, robust system- but that’s a side note.

Okay, environmental issues. So, now the mining power gets distributed all over the world and these “mining rigs” (that’s what they call them), they’ve got the guys who do it at a professional level. There are big computing things -it’s significant hardware.

So, they start realizing something very important. That there is this beautiful, a beautiful problem in the world of the environment and in renewable energy, actually.

So, here’s this problem. Environmental energy and the renewable energy. So, we are talking solar. We are talking wind. You know, when the wind dies, there’s no energy. When solar dies if there’s no sunlight and there’s a problem, right?

As of today’s technology, when the sun is shining, when the wind is blowing and when it is created at a time when people need it then renewable energy is already more profitable than the old fossil fuel versions. The problem is that the fossil fuel versions you can flip it on and off with a switch and you don’t waste resources when people don’t need it. Because it’s very expensive to store that that kind of energy.

The type of energy you need to create for a city, you can’t store that amount of energy. You have to create it and people have to use it instantly or else it gets wasted.

So if it was possible that there was this other energy and someone else was willing to pay for the energy- when the city didn’t need it, when they’re asleep, when during the off-peak times, if somebody else was there to buy all of the energy that wind and solar and all the other renewable energies, thermal, all of it – if someone was there to buy that right when everybody else is asleep and no one else can use it, if you can do it at scale then all of a sudden renewable energy is now 24 hours a day, seven days a week, 365 days a year- it is now more profitable than the fossil fuel versions.

In fact, it would be worth it to just massively over produce the amount of electricity that the people need. Even in the peak, like the busiest part of the day. It’s like okay, the first 20 percent of electricity it can be renewable but the remaining 80 percent it’s only just at the peak time of the day, right?

You must turn it on for a few hours and then it must be turned off. For that, it’s very costly, you must go with fossil fuels for that portion of the energy the peak levels. But if someone was there to buy all the other energy at the rest of the time, it would be profitable for renewable energy sources to just massively over create and just produce enough energy for the peak energy consumption PLUS another 20 percent.

What happens is- the Bitcoin miners are those people.

So, during the peak hours, the Bitcoin miners, they might turn their rigs off and they can just buy like the 20 percent of the electricity, but during the off-peak times they can buy 80 percent of the electricity.

And suddenly, they’ve created a 24/7 market for energy production. I can’t tell you how huge this is this is; it’s monstrous. This is suddenly Bitcoin has a third promise that it certainly didn’t need.

It’s first two promises are incredible- but it now has a third promise. It promises to massively accelerate the move towards renewable energies. We didn’t have to pass any laws. We didn’t have to get congress to steal money from one taxpayer to give to their buddies to go and research technology to do this.

The technology right now is already more profitable than fossil fuels. If there is someone there to buy it during the off-peak times and the Bitcoin miners can suddenly fill that gap.

Because in the world of Bitcoin mining- the physical machines that do the Bitcoin mining is a very small partial portion of your cost. It’s the buying of the electricity that is your very high percentage cost.

So, to buy the machines and let them sit dormant for a few hours a day during peak hours that’s very acceptable if you get to get off-peak energy for the whole rest of the day. There are still the other like 16 hours or whatever it is and so basically what we are seeing is this all over the world.

This this is just from the other day- August 31st.

Excess hydroelectricity from the Clyde Dam in New Zealand will be used for Bitcoin mining. The magic word here is “excess”, right?

What they are talking about is all the off-peak energy. Because it was just getting wasted as a result. There was no point in them creating more electricity from this dam, but because of this suddenly there will be, we are about to live in an energy abundant world.

My prediction, my anticipation is that our human usage of electricity is going to become rather insignificant to how much we produce.

Because it’s going to be free to produce it, right? It’s going to be profitable- it will be better than free. It’s going to be profitable to produce. It’s going to be profitable to produce an excess energy. Where every single one of us the poorest people on the planet are going to get subsidized by bitcoin to uh get cheaper energy.

This is just mind-blowing. As if Bitcoin didn’t need MORE tailwinds- it now solves another massive problem for some people. Some people don’t care about the environmental issues. Some people do.

Certainly, every government in the world seems to care about it. So, this is just literally mind-blowing. The environmental issues have never been a part of a Bitcoin presentation ever- until this year, this annoying thing from Elon Musk (two months of negativity) and then it turns out Bitcoin is our greatest hope of 100 percent green energy in the very near future.

Without any coercion, without any Paris climate accords, without governments getting involved (they’d only heard it anyway none of their things actually helped) and all of a sudden, the free market’s just going to solve this problem. it’s mind-blowingly exciting.

Click here to check out part 7!

Click here to check out Max Wright ( A.K.A “Contrarian Dude” ) on Youtube!

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