Andreas spoke on Day 1 with the overall theme being Bitcoin mining. Being a former banker and economist myself, the mining dissertation was far less interesting than his foray back into the economics of Bitcoin (You can see the entire speech below, and see for yourself.) He did have a unique futuristic take on where the mining industry is going, as far as scaling up in overall efficiency from here. New ASIC chips and electric efficiency will only move so far forward in the next couple of years. The mining systems themselves will have to be that much more efficient to mine and achieve Bitcoin against intense global competition.
“I predict that we’re going to see mining power surpass the current state-of-the-art in data centers and start approaching the state-of-the-art of nuclear reactors. Meaning that if you want to generate that type (100X increases) of thermal load, you’re not looking at a 10 KW air-cooled rack in a data center. You’re looking at a 100KW (mining processor), submerged in mineral oil, in a cooling bath, which is really nuclear technology. That’s where you’ll see the next generation of efficiency (in mining.)”
The economics of Bitcoin currently is much more of a salacious subject when it comes to digital global currency. In the U.S., which is in effect the current leading edge of Fiat-based economic dominion, the U.S. Bond market is tanking, unemployment is skyrocketing, the amount of inflation is unprecedented, federal interest rates have been at 0% for almost a decade, and the stock market is at an all-time high? This is not just problematic and unsustainable; it’s stupid. It is a corrupt, flawed, Keynesian economic model ridden until it’s square wheels fall off. Two wheels have fallen, and the third wheel is wobbling as we speak. This road to ruin is waiting for a tipping point to collapse the global economic market, in an unprecedented debt-based bonfire of self-destruction. The only question is when does the house of cards, really IOU’s, collapse under its own weight?
I’ve known this for years and have explained it in other articles. Andreas explains the upcoming financial tumult, with the ramifications for Bitcoin’s future, this way. (This came from the Q & A session after his speech, following a question ‘What is the best case scenario for the transition away from Fractional Reserve Banking when Bitcoin hits “Critical Mass”‘
“Our generation is currently experiencing a historic event. An event that has not happened in the last three centuries. A currency war and race to the bottom, of absolutely unprecedented scale! Never before in the history of currencies have 21 central banks fixed their interest rates at 0% and kept them there for almost six years! Never before has a central bank offered negative interest rates, and then been followed by six other central banks! You’ve got to understand that sometimes it’s not about Bitcoin succeeding. It’s about Bitcoin surviving while the entire world economic system collapses, in ashes, around it!”
This view is shared by many who are hoarding Bitcoin for the future; for after “The Collapse”. That’s why I say don’t worry about the US Dollar value in 2015 because when the global economic market does eventually correct itself, you won’t be able to compute Bitcoin’s value in dollars. By then, dollars won’t have a global value to speak of. That’s why the low Bitcoin price right now is a great thing, because you can buy low, and benefit when the rest of the market finally figures out what we already know. Be thankful you have the opportunity to take advantage of Bitcoin’s price today if you understand the economics of the global market. At the end of the day, that’s the bigger picture. That’s what really matters.
Bitcoin will be around long after the US Dollar has left the stage. Rome is slowly, quietly burning, but you will have an electronic gold that can carry you through what happens next. The gravity of this global economic situation cannot be understated. Just ask Andreas, who not only understands Bitcoin inside-and-out, but the macro-economics of it all.
“The question about “What will happen with Bitcoin next?” is really the small question. The big question is “Where we go when the era of central banking dies?” because it’s about to die.”
Watch the entire Day 1 of the MIT Bitcoin Expo 2015 below (His section begins @ 34:00)
Is Andreas right or wrong? Is Bitcoin a digital lifesaver here to carry you through the economic turmoil approaching economic markets worldwide? Share above and comment below.
Last modified: March 10, 2015 15:24 UTC