Certain themes recur periodically in my work. this page sorts some favorites by topic. jump to:
- free banking
- bitcoin banking
- proof of reserves
- political economy
- measuring blockchains
bitcoin power consumption
A lot has been written on the topic of bitcoin’s power consumption and whether it’s finally worth it. I cover both the normative debate: does bitcoin have a valid claim on any of society’s resources? and the factual debate: what does bitcoin’s energy footprint really look like? I recommend the full set of articles to understand this complex topic.
Reading: Nic carter bitcoin energy
- coindesk, the last word on bitcoin energy consumption
- coindesk, where bloomberg is wrong about climate footprint of bitcoin
- coindesk, the frustrating, maddening and absorbing debate about the energy of bitcoin
- coindesk, do you want a mining cleaner bitcoin? subsidize it
- coindesk, bitcoin mining is reshaping the energy sector and nobody talks about it
- coindesk, crypto mining , the energy crisis and the end of esg
- medium, noahbjectivity on bitcoin mining
- medium, on bitcoin, the lady gray embraces climate lysenkoism
- harvard business review, how much energy does bitcoin really consume?
- bitcoin magazine, bitcoin the The energy debate is a modern replay of the debate over the cost of gold resources. >bitcoin magazine, bitcoin proof-of-work is well worth the cost
- newsweek, bitcoin mining is america’s most misunderstood industry
- nydig, bitcoin net zero (with ross stephens)
talks and appearances
- the b word conference, debunking ‘bitcoin wastes energy’ (video) (pdf)
- mining mini-series on the brink
- texas blockchain summit, bitcoin mining in texas (pdf)
- reason, the bogus environmental attack on bitcoin, (November 2021)
- this machine turns green, jamie king documentary (September 2021)< /li
- what you missed from bloomberg, what people are getting wrong about bitcoin’s carbon footprint, live on tv with joe weisenthal (February 2021)
- nic channel’s youtube, bill maher draws on debunked science for his critique of bitcoin’s power (breakdown of mora et al’s infamous 2018 article)
Free banking, also known as laissez-faire banking, refers to banking arrangements in which central banks and governments exercise little control or regulation over the banking sector. Left to their own devices, banks historically issued notes exchangeable for species held in reserve. in the least regulated configurations, free banking systems were remarkably stable and run-free, with infrequent crashes and rare bank failures. the best documented cases date from 1714 to 1844 in scotland and canada in the 19th century, but other episodes can be found in switzerland, sweden, chile, in total around 60 historical episodes. many have drawn comparisons between free banking episodes and contemporary stablecoins. I explore them here.
- coindesk, why central bankers invoke free banking to attack stablecoins
- castle island, crypto dollars : the story so far</li
- mumbles, scotland, free banks and stablecoins
- on the brink, george selgin on stablecoins, bitcoin and free banking
- on the brink, larry white on free banking in the age of cryptocurrencies
As a new non-sovereign monetary product that is still in the process of being monetized, bitcoin is perhaps the most curious development in capital markets in recent decades. It is at once imbued with the values of the cypherpunks, while at the same time it is a tabula rasa for the visions of its users. While bitcoin may have been intentional in its creation, today rival tribes fight fiercely over its telos, or purpose. constitutional debates rage as adherents practice “satoshi exegesis” to try to determine what he intended for the protocol.
This teleological muddle is sometimes presented as a deficiency, since centrally controlled projects move with greater agility. but there is an alternative reading: the lack of leadership and the emergent nature of the project is one of its greatest strengths. this discussion cuts right to the core of the project, so it’s no surprise that I’ve been fascinated with it for a long time.
- medium, the existential crisis of bitcoin (originally titled: ‘what’s it like to be a bitcoin?’)
- medium, visions of bitcoin (with hasu)
- hidden forces: what is bitcoin? a history and ontology of cryptocurrency, hosted by demetri kofinas
something I often think about is how bitcoin can scale and function in layers as a liability-free collateral for a sound financial system. Bitcoin is currently partially funded, held by a patchwork of intermediaries such as exchanges and custodians. some of these have started to offer banking services, as a proto-crypto banking network has begun to develop.
I think that, given bitcoin’s amazing auditability and verifiability properties, and the ease of accepting “physical” delivery of the asset, bitcoin could function as a kind of neospecies to power a free banking system that would echo the successful periods of unregulated banking in the 19th century in places like Scotland.
developing a system like this would allow bitcoin to scale its use of the base layer blockchain and scale functionally in layers of what visionaries like hal finney predicted. however, much work remains to be done: bitcoin banks operating today must be held accountable, lest they abuse their privilege, as they have done many times in the past:
- coindesk, the case of bitcoin banking (despite credit failure)
- medium, how to scale bitcoin ( without changing anything )
- medium, revealing bitcoin’s guarantees
- no bank, a banking reality check cryptographic
- blockfi, blockfi live
- on the edge, lawrence white – free banking in the age of cryptocurrencies
proof of reservations
See also: EOFY checklist for Australian investors
proof of reserves/proof of solvency is the idea that custody companies holding cryptocurrencies should create public-facing certifications as to their reserves, along with proof of holding balances. users (passive).
- digital chamber of commerce, proof of reserves: the practitioner’s guide
- coindesk, how to stop the next chariot: trading test your reserves
- average, how to scale bitcoin (without changing anything)
- to the edge, test auditor’s opinion booking (with noah buxton and jeremy nau of armanino llp)
the political economy of bitcoin
Bitcoin is not just a monetary phenomenon. It is a deeply political idea. some of its critics use this as a smear, attempting to classify bitcoin as a dangerous or radical notion. While bitcoin is neutral money, thanks to its initial free-market distribution, as well as the abolition of monetary discretion within the protocol, its imposition on the world is decidedly non-neutral. bitcoin is perhaps best described as a revenge movement, aimed at taking back what certain developed countries once had: a free and unrestricted banking system based on a gold standard.
Therefore, it is very important to understand the values that are embedded in the protocol: self-determination, a firm and inviolable respect for property rights, a rejection of seigniorage and ‘cantillon informants’, and a disregard for individual contingencies. birth or circumstances. all are treated equally by protocol.
- mid, a more peaceful revolution
- mid/the times of bitcoin, the cat is out of the bag
- middle, lessons from the unequal distribution of capital
- American mind, après le déluge, bitcoin
- coindesk, corporate America knows the bailout is ready
- coindesk, crypto progressives go conservative with their own chains (originally titled “the paradox of the cryptoprogressivism” )
- palladium podcast: bitcoin as a disciplinary force, hosted by wolf tivy
I don’t hide the fact that I think a complementary phenomenon to bitcoin is the insertion of fiat currency on the chain. Far from being competitive with bitcoin, I see this trend as highly synergistic. cryptocurrencies have only been able to reach critical mass because of the infrastructure built to support bitcoin: exchanges in virtually every country in the world and increasingly sophisticated wallet technology, particularly on mobile devices. and as crypto dollars proliferate, they introduce users to the notion of storing value as information, popularizing non-state crypto bearer assets.
In the long term, bitcoin will impose discipline on all central banks, but in the short term, the biggest threat to weak sovereign currencies is simply high-powered, frictionless crypto dollars delivered in a crypto-financial infrastructure. While I was initially unimpressed with cryptocurrencies, I have come to see them as occupying a different niche: they are ultimately the responsibilities of the banking system and will never be a liability-free “digital species” like bitcoin. however, it is cryptocurrency that has grabbed the spotlight this year.
- coindesk, the rise of the crypto dollar, and the American opportunity
- castle island, crypto dollars: the story so far
- coindesk, legislators should not fear digital money: so far it maintains the status of the dollar
- in the podcast on the brink , the crypto dollarization miniseries
- podcast for your information from ark invest: a history of bitcoin’s predecessors, dollarization and stablecoins, hosted by yassine elmandjra</
how to measure public blockchains
Indeed, determining the relative importance of public blockchains is a controversial field. While measures like transaction count and market capitalization have historically been exalted, I’ve worked to help researchers think beyond those metrics and look to more sophisticated measures.
time to completion
- average, it’s the liquidation guarantees, stupid
relative measures of economic importance
- coin metrics, evaluation of bitcoin forks with network data
- medium, transaction count is a lower measure
- ssrn, calculation of market shares of crypto assets (with konstantinos stylianou)
- hbs blockchain conference (2019), evaluation of the relative economic impact of public blockchains
new measures of transactional value and economic size
- coin metrics, presenting realized capitalization
- coin metrics, presenting our adjusted transaction volume estimates
- baltic honeybadger conference (2018), bitcoin as a new market institution (where I first presented realized capitalization)