GOOD MORNING
PLEASE WATCH THIS AND REPLY !!!
THANK YOU
Benjamin
PLEASE WATCH THIS AND REPLY !!!
THANK YOU
Benjamin
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DislikedGood Morning Mr. Bruce(Benjaminis), sorry I could not reply your emails before, I am back now! I emailed you couple of times, PM you but you never answered my questions, not even here. Do you want me to post those questions here again?? Plz advise. thanks,Ignored
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President Donald Trump (left) rallies nearly 30,000 Pennsylvania voters on 20 May 2019 to secure election victory for now Republican Party US Congressman Fred Keller (center)
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One shudders to think of what America will become when it’s taken over by young communist women radicals
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To calculate the physical dimensions that the Bitcoin mining operations require, we need to propose a realistic layout for distributing the hardware in a manner that allows it to actually function. One cannot merely pack together transformers and S9 chips in the same way one can densely condense atoms of Gold.
The most efficient layout that would also be representative of best practices in Bitcoin mining these days is to conceptualize a wall of S9 mining hardware. We have been working with a total number of S9s of 3,899,284, so, in our calculation, we will assume the wall is 6 units high, resulting in 649,881 S9s stacked side by side. Once the S9 mining hardware is installed and racked, there is a need for at least 3 feet of clearance on the fan intake side and the exhaust side, and a 6 inch gap vertically between S9s for the power supply and cables, and a 0.6 inch horizontal gap between S9s (accounting for the space occupied by the racks and supporting posts).
However, if we want to determine the physical footprint, that is to say the square meters or square footage in terms of length times width, required to support this infrastructure, we have to logically map out where each transformer would physically sit amidst our “wall” of S9s. I can make a basic assumption that they sit at even intervals along the wall of miners. This would result in the 2,145 transformers of 2.5MW, each capable of supporting 1,818 S9 miners, stacked 6 feet high. In other words, for every 303 columns of miners, we would require a 5 foot safety gap, another transformer, another 5 foot safety gap, and then another wall of miners.
Bringing this all together, the resulting supercomputer capable of supporting the entire Bitcoin network would have the following dimensions:
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What we have now discovered is important and provides us with a new insight: Bitcoin requires physical infrastructure that, if condensed into one physical location, would require a building which was at least 2 meters high and 109,568 meters wide. As we can see, to merely house the physical infrastructure, which gives life to Bitcoin beyond the lines of code anyone could replicate manually, requires, at minimum, 15 million cubic feet or 437,327 cubic meters of volumetric space. Make no mistake about it, somewhere there are countless physical buildings housing all of this equipment. These buildings must be maintained through time if Bitcoin is to be sustained into the future, and their number will only grow if our current supply of Bitcoin is to ever increase.
How does this compare to Gold? While I am no fan of estimates of the total Gold stocks (for, as I mentioned, I believe it is a figure which is impossible to truly know, and the more important attribute is natural scarcity), in this instance, I believe it is instructive to rely on the general estimates of 171,000 tonnes.[18] With this weight of Gold, we are able to estimate Gold’s volumetric space. One of Gold’s key advantages over Bitcoin, here, is that it can be cubed by simply dividing the total weight by its specific gravity of 19,300 kilograms per meter cubed.
In contradistinction, one cannot cube Bitcoin, and my work above was extremely conservative in estimating the associated space and support structures required to power the Bitcoin network. The result is that all of the Gold in the world, 171,000 tonnes, would fit neatly within a soccer pitch, a cube of approximately 8,860 cubic meters in volumetric space, which, due to gold’s densely packed atoms would only measure just 20.7 meters on each side. I must admit that even I was surprised by how little space all the Gold in the world occupies relative to Bitcoins, even when considering that it possesses nearly 6 times as much weight (because in our quest to understand volumetric space, we are inquiring into all the Gold that exists vs. all the Bitcoin that exists). All told, we arrive at the insight that at the time of writing: all the Bitcoin-associated physical infrastructure already requires roughly 49 times more volumetric space and than all the Gold in the world would occupy. In this analysis bitcoin further benefits from the lack of visual illustrations in this paper. For example, the length of the Bitcoin cube is 109,568 metres or 5,293 times the length of the gold cube. Therefore, Bitcoin occupies more volumetric space than Gold.
Gold is, thus, More Value Dense than Bitcoin
Through our inquiry, we have established that Bitcoin requires a tremendous amount of physical weight and volumetric space to exist. In so doing, we have falsified the notion that a Bitcoin is purely digital or virtual, seeing such claims and misinformed assumptions to be nothing more than a misunderstanding of thermodynamics. Our insights can now provide us with an even deeper understanding of Bitcoin’s potential to serve as a long-lasting Money, measuring toil and incentivizing merit-based action into the future. Here, our focus is to merely compare Bitcoin’s attributes as Money to those of Gold.
We have now seen that Bitcoin is not only heavier than Gold in volumetric weight (1.69 kilograms per 1 Bitcoin), but also occupies at least 49 times more volumetric space and far more two-dimensional space (5,293 times). With these insights, we are able to proceed into the most important comparison as it relates to Bitcoin functioning as a Money that is demanded into the future, as Gold has done so effortlessly for thousands of years: Value Density.
An estimate of value density must aim to achieve two things: 1.) Ascertain how much metabolic energy per volumetric space is embodied; and 2.) How long will that metabolic energy last in its most perfect embodiment. Here, it should become clear that an estimate of value density changes our methodology from pausing time and simply comparing how much Gold vs. Bitcoins exist today, to an estimate of how well does the energy embodied in the Bitcoin cube last through time compared to the energy embodied in an equivalent Gold cube. Therefore, we must now adjust the weight and size of our Gold cube from estimates of the total Gold out there (which are irrelevant), to match precisely the weight of Bitcoins outstanding, a figure for which we have arrived at a conservative estimate.
Here a skeptic may once again jump in, asking why comparing the weight of Bitcoin equipment has anything to do with the weight of Gold. The answer lies in the fact that the associated weight of Bitcoin equipment reflects the proof-of-work embodied in Bitcoin, which is itself a reflection of the historic metabolic energy that went into its initial creation. The same is true for the weight of Gold, which represents the historic proof of work that went into the mining of the Gold. Said differently, we have two corporeal weights occupying varying volumetric spaces, that represent a historic expenditure of energy. Which one does a better job of maintaining that energy embodiment through time? Answering this question will unveil to us the relative value densities inherent in Bitcoin vs. Gold.
Let us begin by representing the 29,995,871 kilograms of associated Bitcoin infrastructure equivalent in the 437,327 m^3 cube we discussed in the previous section. This same cube of 29,995,871 kilograms of Gold would fit neatly in a 1,520 m^3 cube. We now have two physical cubes, both representing the same embodiment of metabolic energy (weight), but the Gold cube, as we can see, is far more efficient at storing this energy. Due to Gold’s specific gravity, the Bitcoin cube requires 287 times more volumetric space to represent the same physical weight.
This certainly came as a surprise to me, and in many ways this fact alone should be enough to settle the value density argument. However, the aims of this paper are to compare Bitcoin to Gold, and since that is my mandate, I have to point out another critical issue relating to value density vis-a-visthe Bitcoin cube’s basic capability to embody the energy through time. The problem is that if one truly considers the survivability of the Bitcoin cube weighing 29,995,871 kilograms and housed within 437,327 m^3 through any meaningful period of time into the future, one runs into an unshakeable reality: The Bitcoin cube requires a sustained amount of metabolic energy expenditure in order to perpetuate into the future, while the 1,520 m^3 cube of Gold does not. Mindful of our intent to be intellectually honest, we must try to understand what aspect of the Bitcoin cube is, at the least, “self deleting,” or essentially “melting” as a result of this continued energy requirement. This phenomenon is a real tax on any long-term owner of Bitcoin who believes it to be a store of value—before any analysis of custody, transaction, or other fees levied on the service layer of the Bitcoin ecosystem.
Again, I shall remind the reader that our task is to avoid the usage of nominal, abstract measures such as dollars. This is a first principles inquiry into the thermodynamics underlying two moneys: Bitcoin and Gold. We know the Bitcoin cube requires at least 5,361 MW of additional energy per annum to perpetuate into the future while the Gold cube can just sit there effortlessly while continuing to remain Gold. Our task, then, is to evince this 5,361 MW of energy in the form of physical weight and volumetric space. In so doing, we will have a clearer understanding of the visual analogy of a Bitcoin cube relative to a Gold cube as it relates to Value Density.
I am going to be extra nice to Bitcoin here by using the most energy-dense, non-theoretical fuel employed in the actual generation of electricity today: Coal. The energy density of Coal is roughly 33 megajoules per kilogram of weight. Knowing this, we can calculate that the 5,361 MW of energy demanded by the Bitcoin cube twenty four hours per day, seven days per week, and three hundred and sixty five days per year, would result in around 46,962,360 of MW/h. Bringing in the energy density of coal into our calculation results in an annual demand of 5,232,141 tonnes of coal to maintain the current Bitcoin cube.[19] It is surely disappointing to discover that, even when using the cheapest and most energy dense of fuels (coal), we can see that billions of kilograms of additional volume of fuel must be extracted, transported, stored, converted to electrical energy, and distributed to the Bitcoin cube of hardware each year. This helps us visualize that this tax on the network is very much real, certainly not virtual, and certainly not weightless. Unfortunately, it introduces another important insight: there is an inherent decay through time for the Bitcoin, or in options parlance: “theta bleed.”
In summary, we have established that Gold is far more value dense than Bitcoin, showing Bitcoin to be a terrible embodiment of metabolic energy through time and calling into serious question its integrity as a store of value that may incentivize merit-based action in the future.
Bitcoin requires more energy than Gold to exist in the present and to perpetuate into the future. Importantly, this insight has nothing to do with Bitcoin’s current market price. It would not matter if Bitcoin rose by 49 times in value because all of our calculations were predicated on thermodynamic units of weight and volumetric space rather than abstract, nominal units of mathematics. This annual requirement in the form of additional energy, weight, space, and other resources, must be taken into account when comparing Gold to Bitcoin because, as I explained in the introduction, the cube of Gold does not require any additional resources to continue to exist as Gold while Bitcoin requires more weight, more space, and a never ending supply of billions of tonnes of energy just to exist as anything more than lines of computer code.
Bitcoin Needs Gold to Exist, Gold doesn’t need Bitcoin to Exist
Thus far, we have established that once the metabolic energy has been expended to mine Gold from the earth, its natural properties guarantee that no further metabolic energy will ever need to be expended in order to maintain Gold’s constant, physical state. By contrast, we have seen how Bitcoin, once “mined,” requires the constant expenditure of metabolic energy in order to continue to exist through time.
Beyond this basic difference, unfortunately for Bitcoin, there is yet another fundamental difference between these monies: whereas Gold does not need Bitcoin in order to exist, Bitcoin cannot exist without Gold. The very computer chips used to “mine” Bitcoin must conduct electromagnetic energy at 300,000 km/s–the speed of light–if they are to be effective. The only material conductor in existence which is capable of handling that capacity is Gold. Therefore, in order for Bitcoin to be “mined” at all, Gold is an inherent prerequisite.
In contradistinction, no Bitcoin has ever or will ever be required in order to extract Gold from the earth—nothing more than a pan or a pickaxe are required to begin that process. This fundamental difference points not just to the primacy of Gold over Bitcoin (we can't have the latter without the former), but to the clear absurdity of using something which can, in and of itself, serve as a perfect money (Gold) to create a manifestly inferior monetary substitute (Bitcoin). Put simply, by using Gold this way, we are taking something which perfectly realizes the intended outcome and using it to create something that does not.
Conclusion
The purpose of this paper was to dispute claims made by Grayscale via their DropGold campaign. Personally, I have been disappointed by the lack of response from the Gold community in this regard. While balancing my executive position in three companies, a busy travel schedule, and countless personal responsibilities, I have made an effort to spend several hours each day over the past two weeks to draft this paper. I did so because I felt it was in the public interest to crystallize this critical dismantling of Grayscale’s campaign of misinformation.
While there have been some cursory attempts by members of the Gold community, these have lacked the rigor necessary to truly speak to the essence of the issues with the Grayscale campaign. Some Gold investors, for example, rushed to point to the notion that Grayscale charges 2% per annum to merely hold Bitcoin, while the Gold ETF’s charge just 0.5% each year. To me, these analyses, while helpful, missed the more foundational issue at hand, which was that before making any comparison of nominal fees, one should first compare the true properties of both Gold and Bitcoin. The real issue isn’t that Gold EFTs are cheaper than what Grayscale has to offer. The issue is that Gold is naturally better.
By addressing this more fundamental issue, I was able to objectively analyze the merits of Bitcoin in the present, proving the claims made by Grayscale that Bitcoin is weightless to be preposterously wrong. Building on this understanding, I was able to show that Bitcoin is very much a physical entity, one which is indeed heavier than Gold. Introducing volumetric space, I was able to show that the weight embodied by Bitcoin means it is also far less value dense than Gold. Lastly, I was able to demonstrate that the continued energy demands of Bitcoin as manifest in the corporeal world, are a real tax on its ability to embody energy into the future. This showed that not only was Bitcoin clunkier than Gold, but that this introduces serious questions about its ability to sustainably serve as Money in the future.
Here, the argument moves beyond the comparison of Bitcoin to Gold into a comparison of Bitcoin to anything corporeal. This is a separate project to be taken up by other curious minds, one which will likely show that even Oil or Copper, which have rates of diminishing utility of ~2-3% per annum, are likely more efficient stores of value than Bitcoin due to their value density and first order properties. In this way, Bitcoin is a melting abstraction requiring ever more hardware and ever greater amounts of energy just to perpetuate its own existence. I have sufficiently shown this to be a literal weight which can be viewed to be increasing the size of the Bitcoin cube relative to Gold (inflating it), thereby decreasing the per capita ownership of Bitcoin in much the same manner as a negative interest rate does in modern economic theory. Even before any debates about a hard cap of 21 million coins, transaction fees, how miners can be incentivized into the future, and so on, the Bitcoin community must first address this acute question of how Bitcoin owners will pay for the annual existential requirement on the part of this melting abstraction to consume energy and add physical equipment and infrastructure. This question must be answered thermodynamically, because the physical world has real thermodynamic limits while the mathematical world circumvents these realities by using the intellectual hack called “infinity” to create virtual worlds which are artificially exempt from thermodynamic realities.
After demonstrating that Bitcoin was an inferior Money, I also drew attention to the irony in advocating for the comparative superiority of Bitcoin over Gold when the 4 million Bitcoin mining chips require Gold in order to engage in computations for any sustained period of time. The amount of Gold here is irrelevant, and this argument is largely beside the point, which is why I didn’t spend too much time on it. However, the primacy cannot be disregarded, and helps reconcile a lot of the other arguments I put forward throughout the paper.
It is, therefore, my hope that I have sufficiently falsified the DropGold campaign as a misinformed attempt to promote bad information to unknowing investors while arguing for Gold’s manifest superiority to Bitcoin as Money.
It is my final hope that the Bitcoin community will embrace this research and a shared understanding that the Gold and cryptocurrency communities should be working together rather than against each other as we march towards the inevitable demise of the fiat currency system.
Ultimately, what this paper reminds us of is that there is nothing new under the sun. There is no better designer, no better architect, and no better measure of toil and motivator of merit than a product of the first order laws of nature. Human abstractions can try to build a better mousetrap, but these are merely paradigms that fail when correctly pierced by sound meditation and analysis of our natural world.
[1] https://medium.com/grayscale-investm...d-9e6909528af6
[2] https://www.etftrends.com/core-etf-c...-2-growth-ytd/
[3] https://grayscale.co/q4-2018-digital...stment-report/
[4] https://dropgold.com/
[5] See https://en.wikipedia.org/wiki/History_of_bitcoin
[6] https://en.wikipedia.org/wiki/Good_Delivery
[7] https://www.thoughtco.com/how-many-e...-nature-606635
[8] Here, I use the term “non-clannish” to describe any cooperative society wherein there is no innate demand for one human to cooperate with another for their continued survival. In a clannish society, where individual human agents are held together by bonds of shared trust and/or kinship, basic, human qualities such as love and altruism are sufficient to foster cooperation between one human and another—a parent’s will to feed their children, a younger, more healthy person’s drive to care for older, ailing kin, and so forth. When networks of human cooperation grow more complex than these direct, familial cooperative societies, non-clannish human cooperative societies are born, and by nature of the increasing personal distance of one individual human agent from another in such societies, money must be introduced as an impetus for inspiring cooperation that stands as a substitute for the altruism and other human drives that foster cooperation on the smaller, clannish scale.
[9] The Holy Bible: King James Version, Quatercentenary Edition (Oxford: Oxford University Press, 2010), Ecclesiastes Chapter 6, Verse 7
[10] http://demonocracy.info/infographics...gold/gold.html
[11]https://books.google.fr/books?id=WfUtAgAAQBAJ&pg=PA205&lpg=PA205&dq=Bitcoin+designed+to+mimic+Gold&source=bl&ots=bnTSEPW7AB&sig=ACfU3U39rU2kHtiaoB1tVL8Tiw4ZT5fjnA&hl=en&sa=X&ved=2ahUKEwjK2ur3iqDiAhXcAGMBHfgSDOEQ6AEwDnoECAgQAQ#v=onepage&q=Bitcoin%20designed%20to%20mimic%20Gold&f=false
[12] //medium.com/@roysebag/the-natural-order-of-money-and-why-abstract-currencies-fail-aad5f9f8cf89">https://medium.com/@roysebag/the-natural-order-of-money-and-why-abstract-currencies-fail-aad5f9f8cf89>
[13] I conceptualize all human cooperative societies to be comprised of two basic segments, the Primary Cooperative, which produces the basic metabolic energy surpluses on which the society as a whole depends, and the Secondary Cooperative, which produces non-metabolic goods and services which are not mandatory to the continued survival of the individual members of the society. When economists talk about a “service economy,” what they are really talking about is that segment of a cooperative society that performs services which may be subjectively desirable but which are not objectively required for continued survival.
[14] https://www.theguardian.com/environm...ricity-by-2025
[15] https://digiconomist.net/bitcoin-energy-consumption
[16] I would like to thank Aydin Kilic for his assistance with these estimates.
[17]
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Innocent British citizen Svetlana Lokhova (above) strikes back against Trump coup plotters…
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…that leaves top Obama Regime spy chiefs blaming each other for this vile crime.
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Joseph Mifsud revealed to be top Western spy trainer giving lectures in America—including just days after President Trump took power (above, lower left)
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American traitor Stefan Halper (above) soon to be served justice by President Donald Trump and innocent British mum Svetlana Lokhova
Monetary policy has gone from being a tool to support reforms to an excuse for not implementing them.
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We must remember that the euro is not a global reserve currency. The euro is only used in 31% of global transactions, while the US dollar is used in 88%, according to the Bank Of International Settlements (the total sum of transactions, as the BIS explains in its report, is 200% because each transaction involves two currencies).
Bond yields in the Eurozone are artificially depressed and give a false sense of security that is completely clouded by extremely low interest rates and excess liquidity.
Everything is justified because “there is no inflation” and yet there is, and a lot. Not only in financial assets (huge bubble in the aforementioned sovereign bonds), prices in the Eurozone have increased by 40% since 2000 while productivity has barely increased.
Cheap debt must never be an excuse to increase it, but an opportunity to reduce it.
All this generates excessive complacency and accumulation of long-term risk.
The ECB ignores tail risk and accumulation of imbalances and expects liquidity to generate the levels of growth and inflation that have not been achieved after two trillion euro of expansion. Meanwhile, the risks of debt saturation rise.
Governments all over the eurozone identify low yields as some kind of market validation of their policies, when markets are artificially inflated by the central banks’ policies. This placebo effect has led many countries in Europe to abandon the reform impulse, and many believe that the solution to low growth is to return to the wrong policies of 2008.
Low yields are not a sign of credibility and low risk, but of financial repression and fear of a weaker macroeconomic environment in other assets.
The problem of the Eurozone is that it has relied entirely on the placebo effect of monetary policy to strengthen the recovery, focusing on a single objective, to make public spending cheap to finance, whatever the cost. This perpetuates structural imbalances, the perception of risk is clouded and the economy becomes less dynamic while long-term risks rise.
The ECB finds itself in a monetary trap. if it normalizes policy, the mirage of low yields will disappear and governments will react against it. However, if it keeps the policy, there is an increasing risk of repeating a Eurozone crisis without any tools to address it. That is why it must raise rates now and stop repurchasing maturities while markets remain optimistic.
Unfortunately, instead of proposing supply-side measures and curbing the excessive taxation and stagnating effect of government spending, many analysts will recommend more spending and more liquidity as solutions that will make the economy even weaker. The main problem with the accumulation of debt at low rates is that it has the same effect as a real estate bubble. It disguises real liquidity and solvency risk, because borrowing costs are too good to be true.
And they are not true.