What a week! The cryptosphere is buzzing. Did a single tweet Elon Musk made the price of Bitcoin? Or have weak hands handed their coins to strong hands at a discount? Although Elon’s motivations are involved, and probably have nothing to do with the environment, the CEO of MicroStrategy came to the rescue. In a recent tweetstorm, Michael Saylor explained to the world the wonders of proof of work as a consensus mechanism.
Before we even begin, let’s check Saylor’s credentials. According to Wikipedia, “He graduated from MIT in 1987, with a double specialization in aeronautics and astronautics; and science, technology and society.”And this extremely qualified person States, “Proof of Work Architecture is an engineering masterpiece that anchors the system in the real world, providing seven layers of security.“
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These layers fall into the following areas: energy, technology, politics, finance, mining, space and time. And Taylor proceeds to break them down one by one. But before getting to the heart of the matter, let’s think about the phrase “Anchors the system to the real world. ” What is the link between the supporting documents and the material reality? And if what makes them valuable isn’t energy, what is? What is the value of these coins?
BTC price chart on FTX | Source: BTC/USDT on TradingView.com
Energy wasted according to Saylor
What people like Elon and his bosses forget is that well-placed economic incentives are the gas that makes Bitcoin work. And there is a huge incentive to move mining operations to places where energy is cheap. And energy costs less where it is abundant, or even wasted. Who better than Michael Saylor to explain this?
This is what happens when you act smarter than you are in a space full of the smartest people in the Maher room. @billmaher
– Indiana Hodl (@IndianaHodl) May 9, 2021
The “seven levels of security”
- Energy: “Miners can monetize any form of energy, anywhere on earth, in any quantity, at any time, at the highest price.“According to Saylor, energy suppliers around the world will be competing for the business of these miners. This is already happening. The system slowly settles into place.
- Technology: If the market demands clean and energy efficient energy extraction equipment, there is a huge incentive for manufacturers to supply them. And the miners, “must continually upgrade equipment to remain competitive, creating huge barriers to entry and exit, stabilizing the network while bringing Darwinian discipline and vitality.“
- Politics: We have already discussed geopolitical arbitrage in tax matters, but what about the mining sector? Don’t countries and states have an incentive to bring a booming business to their shores? After all, “Miners are the last clean, high-tech exporter to generate hard currency.“
- Financial: It’s no secret that Bitcoin is the best performing asset in the history of the planet. Say it’s a “attractive investmentIs an understatement. That means “investors and their banthe miners are thus recruited as powerful political and financial allies ”of the miners because they are the main customers of their product.
- Mining: The miners themselves “become powerful advocates of the network,” with a “special interests to defend“He. As this story unfolds, the miners will become a dominant force in the world.
- Space: All of the above “lead the geographic decentralization of the mining network.“It’s Bitcoin’s best defense against any attack, it’s everywhere and nowhere at the same time. In addition, the mining network is a step removed from the asset itself.
- Temporal: Breaking down all these layers of security will take a tremendous amount of effort, but, perhaps more importantly, it will take time. According to Saylor, between two and four years. Which does, “any attack is very difficult, expensive, slow, difficult to conceal, unlikely to be successful, and allows time to react.“
Related reading | MicroStrategy Acquires Additional $ 15 Million In Bitcoin
Conclusion and summary
We will leave this section to Michael Saylor himself:
Summary: The #Bitcoin The Proof of Work architecture anchors the cryptoasset network physically and politically in the firmament of reality, leading to fierce competition in the market to decentralize, enhance and secure the network, thus ensuring vitality and integrity over time.
– Michael Saylor (@michael_saylor) May 13, 2021
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