Value is a strange thing. What do humans really value? Food? Housing? Clothes? Well, of course those things have intrinsic value as we need them to survive. But to have an economy you can’t rely on food or other items required for survival as once they’re spent, they’re spent forever. We need something which can be spent for good but produce something which can stay in circulation forever, or at least for quite a long time. We also need something that cannot be easily destroyed, cannot be forged and is easily identifiable as the item in question. Most importantly, we need something which humans identify as truly valuable. Thus, this something should also be able to be used for other purposes, without removing value from the a potential byproduct which may have the qualities mentioned and can be used as money.
For centuries, this concept has found refuge in precious, or rather let’s call it rare, metals. Silver, platinum, gold and many others, with the most valuable being gold. Gold actually can fit most of the above qualities. However, gold is not really being used for anything other than semiconductors and possibly in very few other endeavours. Also, what’s more a problem with gold, is that for as long as we’ve been using it as money, it’s been sitting in large vaults doing literally nothing, just backing up paper money. It’s as if we could just imagine that we have it. On the other hand, using it as coins or carrying it around in any raw form is not convenient.
These reasons have lead us to the concept of cryptocurrencies. The creator of Bitcoin has opened us to a new realm of possibilities, by doing the unthinkable. He or she, have managed to create a means of taking the kilowatt and storing it in a digital form. The kilowatt, or electricity if you’d prefer, can be a form of currency that fulfills all the conditions mentioned in this writing. Nobody can dispute the fact that energy is currency. However until recently, there was no easy way to store it to buy other things with, in an effective way. I mean sure, you can trade gas, oil, plutonium and any other material which has the potential to create energy. But this is the first time in history that we can use electrical consumption as a byproduct to be stored and used as a currency that fulfills all the required conditions to make it be considered valuable.
Remember, as dollars used to be backed by gold, cryptocurrencies are backed by kilowatts. The real beauty of this though is that we don’t need to have the kilowatts sitting around doing nothing. We convert some of them to cryptocoins in order to use them and we use others to run our fridge.
The more efficient and cleaner methods we employ to generate electricity in the future, the more valuable our bitcoins will be.
