What a week! The cryptosphere is in turmoil. Made a single tweet Elon Musk brought down the price of Bitcoin? Or have weak hands ceded their coins to strong hands at a reduced price? 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 get started, 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 levels of security.“
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These layers are found in 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. How do Proof-Of-Stake coins relate to material reality? And if the thing that makes them valuable isn’t energy, what is it? 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 layers 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 fighting over the business of these miners. This is already happening. The system slowly settles into place.
- Technology: If the market demands clean energy and energy efficient mining equipment, there is a strong incentive for manufacturers to supply it. And the miners, “need to continually upgrade equipment to remain competitive, which creates huge barriers to entry and exit, stabilizing the network while bringing Darwinian discipline and vitality.“
- Politics: We have already spoken of geopolitical arbitrage when it comes to taxes, but what about mining? Don’t countries and states have an incentive to bring a booming business to their shores? After all, “Miners are the quintessential clean high-tech exporter, generating 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 investment“is an understatement. It means”investors and their banThe kers are thus recruited as powerful political and financial allies âof the miners because they constitute the main clientele of their product.
- Mining: The miners themselves âbecome powerful advocates of the network,” with a “strong interests to defend“This. 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.âIt’s Bitcoin’s best defense against any attack, it’s everywhere and nowhere at the same time. In addition, the mining network is at a stage of the asset itself.
- Temporal: Breaking down all of 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 old. Which does, “any attack that is very difficult, expensive, slow, difficult to conceal, unlikely to succeed, 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 #Bitcoins 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. time.
– Michael Saylor (@michael_saylor) May 13, 2021
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