You use a certain amount of energy computing blocks. How do you get back or redirect that energy? Isn't it mostly lost as heat?

If your datacenter produces currency, that currency belongs to the datacenter owners and operators, not the electric grid operators. You could spend currency importing additional fuel but that was true regardless of what task the datacenter was doing to produce currency. You could be renting out cloud storage or crunching numbers for LLM chatbots.

Is Bitcoin mining the most efficient way to turn electricity back into some form of currency? I doubt it. One compelling alternative is turning air and water into ammonia, which can be used to fertilize crops or burned as a fuel for mechanical or electrical output. Or you could perform those other datacenter tasks.

Moreover, Bitcoin is convertible into electricity at variable rates, not a fixed rate. I can't buy Bitcoin now and have any confidence about how much or how little electricity it will buy in 5 years. Supposedly this is the great weakness of fiat - that my fiat dollars will buy an unknown amount of real goods.

I suspect this unknown is the chief appeal of Bitcoin. Bitcoiners seem to hope that Bitcoin will increase in trade value vs real goods, while they (and I) believe fiat will tend to decrease in trade value vs real goods.

If you think Bitcoin will continue to increase in trade value vs real goods forever, why? Whatever wonderful mathematical properties it has can be duplicated in other cryptocurrency. Do you think all cryptos matching or exceeding the current properties of Bitcoin will go up in value forever?

The consumed energy, of course has already been consumed. The supply that is aimed at that source of consumption is what can be redirected. This is supply that would otherwise be curtailed in one way or another. Rather then curtailing or ramping the supply, you throttle down the mining. There is no other industrial scale consumer of electricity that can be throttled up and down or completely shut off that quickly. You can’t just shut down a data center full of servers, or take cloud storage offline at moment’s notice.

Yes the bitcoin minted by the data center belongs to the data center, but some must be distributed to cover the coast of electricity. And so long as the data center is paying the bill, what does the producer care? They never need to interact with the bitcoin.

We know definitively, that the fiat dollar will buy less in five years, by definition as an inflationary currency. We know that for the entirety of its history, that there are no 2 points on a bitcoin price chart in which it has bought less five years later. Granted it has a short history; In which it has out competed that vast majority of other currencies in the world.

Why will it continue to go up in trade value vs real goods?(I’ll give that one it’s own separate answer, its kind of a big one.) As long as bitcoin continues to be useful and people want to use it. But why can’t any other cryptocurrency duplicate what bitcoin can offer? Firstly the security of the network. The network has more compute power than any other network in the world, more then all the supercomputers, or anything else, by orders of magnitude. You absolutely can not recreate that, on any realistic time frame, or port that over to another network. Same with the nodes, it is genuinely globally decentralized, and you can’t just port those nodes over to another network.

Why go up forever?

(I cheated in this one. I was struggling putting conceptual understandings into concise statements, so I used chatGPT. So, totally fair if you want to harange me for not being able to defend my arguments....🤷‍♂️)

From an economic standpoint, Bitcoin's potential for perpetual price appreciation can be attributed to fundamental principles of supply and demand, coupled with the network effect. Bitcoin's supply is capped at 21 million, creating a scarcity dynamic. As more individuals and institutions adopt Bitcoin, demand increases. Scarcity coupled with rising demand generally leads to price appreciation.

Furthermore, the network effect amplifies this dynamic. As the number of Bitcoin users grows, the utility and value of the network increase exponentially, attracting even more users and, consequently, more demand. This self-reinforcing loop has the potential to sustain long-term price growth, especially as Bitcoin continues to penetrate global financial markets and challenge traditional stores of value. Therefore, theoretically, Bitcoin's price could ascend indefinitely as long as these dynamics persist.

the energy dynamics of Bitcoin mining add another layer of complexity and potential for long-term value appreciation. The Proof-of-Work mechanism, which secures the Bitcoin network, requires miners to expend energy to validate

transactions and create new blocks. This energy expenditure effectively "backs" each Bitcoin, imbuing it with a tangible form of value akin to the labor and capital invested in extracting precious metals like gold.

The energy cost sets a kind of "floor" for the value of Bitcoin; as long as people are willing to expend energy to mine it, it will have intrinsic value. Moreover, as the network grows and more energy is expended, the security and robustness of the network increase, making it even more attractive to potential users and investors. This, in turn, feeds back into the supply and demand and network effect dynamics, creating a multifaceted system that could theoretically drive Bitcoin's value upward indefinitely.