Bitcoin Mining Redux

Money in basic terms represents the amount of time and energy that you contributed to produce a good or service. Money stores the value of that expended energy for use at a later date. US Treasury Dollars are printed with no productivity contributed, they are issued as debt. The concept of more money is very deceiving, the economy gets a temporary stimulus boost by the influx of cash but its debt, debt we pay back via tax increases. Not so obvious effects of the additional cash are realized as inflated assets, inflated markets and decreased purchasing power.

Bitcoin miners are rewarded for the time and energy (electricity) they provide to verify transactions, create new blocks and secure the network. New blocks are created every 10 minutes and miners compete to find those blocks by solving complex algorythmic math problems. A transaction is verified when a random selection of miners reach consensus then the transaction is permanently recorded and stored in that block. Miners are incentivized to seek more sustainable cheaper sources of energy, cheaper energy = higher profits.

Bitcoin miners provide security for the network by running the Bitcoin software. The decentralized network of around 1 Million anonymous miners spread across the globe would each have to have their unique encrypted passwords hacked to successfully hack the network. Centralized networks use servers containing thousands of names and addresses, including personal data that is housed in only a few easily accessible locations that require only one hack to breach the network.

Opponents of government policy for financial institutions to require KYC “Know your Customer” ID verification claim that these “honey pots” pose an unnecessary threat to an individuals security by storing them in all in one location making the work for a hacker much easier. One hack can result in hundreds of thousands of customers personal info to be compromised. Not one terrorist, drug cartel, money launderer has been identified via KYC further making the case its used for surveillance of customer activity which constitutes an invasion of privacy. (I feel that the largest terrorist, drug cartel financial fraudster and war mongering organization has already been identified).