My Learnings: #68
Based on years of consuming content from Bitcoin thought leaders like Jason Lowery and Jeff Booth, along with my own reflections, I've distilled two core ideas that capture Bitcoin's essence and transformative potential. Credit goes to Lowery and Booth for originating these concepts, though their influences remain unclear to me.
Bitcoin is fundamentally a software protocol that enables a decentralized, planetary-scale computer whose state is extremely difficult to alter and can only be changed through the expenditure of vast physical energy in the form of electricity. Its most prominent initial application is as a ledger tracking ownership, thereby establishing permissionless and egalitarian property rights for anyone with internet access. "Permissionless" means no approval is required to participate—you can engage at any time. "Egalitarian" ensures equal treatment by the protocol, irrespective of status, wealth, political ties, or location. Property rights form the bedrock of human rights; without secure ownership, individuals lack the means to store value or energy from their efforts, reducing life to mere day-to-day survival without future security. The decentralized aspect arises from a network of thousands—potentially hundreds of thousands—of computers running as Bitcoin nodes (maintaining ledger copies) or miners (competing to add the next block of transactions to the blockchain). Owned by diverse individuals and entities worldwide, this setup ensures no single party controls or can shut down the network, rendering it effectively unstoppable thus far. Changing the computer's state requires winning a computational guessing game to find a valid nonce, which demands immense electricity via specialized hardware like ASICs—bridging digital rules with real-world physics.
A crucial distinction is that Bitcoin operates as a protocol, not merely a program. Protocols tend to be winner-take-all, as Jeff Booth aptly notes, unlike technologies that often yield winner-take-most outcomes. Successful protocols include TCP/IP for internet communication, base-10 arithmetic for humans, and base-2 or base-16 for machines; fragmentation would render them ineffective. Bitcoin's overwhelming dominance and network effects position it as the unrivaled protocol for global digital property rights, unlikely to be displaced.
As of October 2025, the network's hash rate stands at approximately 1,100 exahashes per second (EH/s), where one exahash equals 10^18 hashes. This measures the collective guesses miners make each second to discover the next block. If each guess represented one second of time, the network's output per second would span roughly 2,500 times the estimated 13.8-billion-year age of the universe, illustrating the colossal scale defending the ledger. Interwoven with global power grids—pursuing cheap, stranded energy—and political systems, this fortifies Bitcoin's longevity.
The second major insight, primarily from Booth, highlights how Bitcoin mining acts as a perpetual, ever-present buyer of electricity at the global marginal cost of production. Miners flock to any low-cost or excess energy, allowing producers to monetize idle capacity that would otherwise incur losses. This on-demand consumption optimizes new and existing infrastructure, turning potential waste into revenue. For those familiar with manufacturing, where underutilized capacity threatens viability, this dynamic is revolutionary. Ultimately, it fosters abundant, near-unlimited electricity worldwide, elevating living standards for all.
Together, these ideas—Bitcoin as an unassailable protocol for property rights and a catalyst for energy abundance—make it one of the most profound advancements in human history, certainly within my lifetime.