Cool Breeze wrote: ↑Sat Apr 29, 2023 9:11 amThe reason this criticism is incorrect is because GOLD is backed by energy, it's just the result of it. The BTC network is backed by energy AND solves the problem of trust/decentralization.
Vince shows that in his subsequent points, which is weird that he opens with something questionable. All work is ENERGY. BTC is the best asset to preserve human energy and labor, transmit it, and disallow other elitists ruling over for you from stealing it. It is one of the greatest human innovations of all time, if not the greatest.
While it is true that energy is used to mine gold, and energy is used to "mine Bitcoin", it does not mean the same as "Bitcoin is backed by energy". Everything we make in the world uses up energy. This is not really some special feature of Bitcoin.
If somehow it took 1 megawatt-hour of energy to make 1 BTC, then we could have a link between the price of energy and the price of Bitcoin. But that is not how it works at all. The difficulty of mining only depends on how fast the blocks can be stamped. If it is less than 10 minutes the difficulty goes up. If it is longer than 10 minutes the difficulty goes down. Bitcoin mining algorithm gives stability in the time it takes to make the next block, about 10 minutes. This has worked very well and for lots of years it is about 10 minutes for the next block. But the mining does not give any sort of value stability like mining gold does. It does not tie the price of BTC to human labor or any unit of energy, the way mining gold does.
Again, yes I think Bitcoin solves what may be the most important problem in our world today, how can we keep score and transmit value in a way that governments and banks can not steal it. It probably is one of the most important human innovations of all time. Yes, when governments and banks can't steal people's money so easily, the world will be better. But it is still wrong to say "Bitcoin is backed by energy".