“In a world where the US money supply can go up 23% in a given year with no end in sight...” And yet real inflation rates have remained low and pretty much on target for decades. Why don’t we see 23% inflation? You can’t take the money supply alone and assume inflation. That’s only 1/4 of the equation that determines prices. Expansionary monetary policy is implemented as a response to otherwise DEFLATIONARY adverse events, to prevent a downward spiral. The end in sight is the end of whatever crisis it was used for. The fed then announces a new interest rate. Etc. A % increase in the money supply alone, without context, doesn’t tell me whether it’s an excessive number and I should be worried.
Is there somewhere where I can get good data on where the electricity for Bitcoin mining comes from? The article itself says this:
> And the electricity the Bitcoin miners use overwhelmingly comes from polluting sources.
No, the reason bitcoin has increased in price is speculation of future increases.
Basically every asset is up considerably since the US government decided to spend $12 trillion and increase the money supply by 23% in one year. I'm sure its completely unrelated
It's important to note that the cost of energy its priced to is more or less the global lowest cost of energy. No one mines Bitcoin in Los Angeles during the summer. Bitcoin is a way to convert cheap or excess energy anywhere in the world into money, much of it renewable or energy that would go to waste. And most mining is centralized in a few locations for this reason. So doing a simple energy calculation is dishonest.
> The two essential features of a successful currency are that it is an effective form of exchange and a stable store of value, says Ken Rogoff, a professor of economics at Harvard University in Cambridge, Massachusetts, and a former chief economist at the International Monetary Fund (IMF).
> He says Bitcoin is neither
This made me chuckle. The reason the price of bitcoin (and hence the energy cost of mining) is going up is that people have lost faith in the monetary institutions. In a world where the US money supply can go up 23% in a given year with no end in sight is a world in which you can't trust your savings. We had a global pandemic and stock market is up 30% from pre-covid. This is insane. And people aren't dumb. They're just waiting for the other shoe to drop. In the meantime some find Bitcoin to be an effective hedge.