Why Mining Makes Bitcoin Unstoppable
Bitcoin’s got its issues. But it is not competing with perfection.-Dan Kaminsky
There is a lot said around proof-of-stake v proof-of-work; mainly that proof-of-stake is “inevitable” for any serious chain going forward. Energy FUD has always been tossed at Bitcoin. With all the new chains released in the last two years, almost none of them use proof-of-work for consensus. But despite its flaws, it could be argued that the aspect of mining Bitcoin is really its secret weapon, and makes its long term success as hard, sound money all the more likely.
Aside from the argument that proof-of-work is generally more decentralized, which is basically true, the main reason that mining makes Bitcoin unstoppable is simple: the sheer amount of tangible resources and capital allocated towards mining. You cannot just put that toothpaste back in the tube. Just take a look at any mining facility someone may post on twitter, the scale is industrial–it is awe-inspiring to see the just how much time, thought and effort is put into the mining of Bitcoin.
When China went from all the hash rate to none, and the network came out on the other side in Texas, Florida and elsewhere without a scratch, it validated proof-of-work, and it validated Bitcoin wholly and completely. Proof-of-work for Bitcoin is an industry. Part of the lure of Bitcoin is because of its thermodynamic properties via mining. This “energy” is not wasted by Bitcoin–in fact, it actually promotes energy efficiency. There is also something called “controllable load resource” that nullifies the ESG junk, which you can read more about here.
Every day we see more and more Bitcoin mining companies going public, adding to the massive ecosystem that makes the network so strong. There is human capital and physical capital–unwinding all this would be actually far easier if Bitcoin was say, proof-of-stake. To unwind what Bitcoin has become is nearly impossible due to the massive physical resources allocated and exercised to mine it. And because of the genius that is known as “difficulty adjustment” in the Bitcoin code, mining can fluctuate rapidly and deal with massive stressors on the network like say, a country as big as China banning it overnight without any problem at all.
As one author put it for NASDAQ, “Ultimately, Bitcoin will absorb the majority of the store of value energy on the planet because it has the hardest monetary properties. Salability, fungibility, censorship resistance, and proof-of-work. Proof-of-work being the most important of these, because it satisfies the first law of thermodynamics, and therefore guarantees that the third law of thermodynamics brings the majority of the monetary energy existent into the network.”
The monetary energy created through mining is something that has been lost in the world. The incentives in our system are perverse–central banks distorted the actual cost of capital through interest rate manipulation, and thus monetary value is warped. Bitcoin does fix this. “Bitcoin is just funny internet money”–you don’t hear that one as often. This is because when you take a look at the massive industry mining has become, people realize Bitcoin exists in the third dimension, and is definitely “real”.
If there is to be a hard, sound money, of course there will be an energy transfer to create it. If there wasn’t, it’d just be another scam, with no truth behind it. Mining is truth, it is physics. Bitcoin will be unstoppable because of physics.
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Text source: CryptosRus
