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Why Bitcoin Uses Energy and the Importance of Pegging Money to Energy
Bitcoin uses energy because, like gold, it requires energy to produce in order to maintain its value storage capability and prevent hyperinflation. Unlike fiat currency, which requires no energy to produce but often experiences hyperinflation, Bitcoin has taken the principle from gold and applied it in a digital form. By expending energy through Bitcoin mining, the supply of Bitcoin is secured from dilution via inflation. The integrity of a money and its ability to store economic energy or purchasing power into the future is directly proportionate to the energy necessary to produce it. This principle is derived from the fact that energy is uncounterfeitable, as stated in the second law of thermodynamics. To create a money that cannot be counterfeited, it must be pegged to energy itself, which is what Bitcoin has achieved.