How Bitcoin is creating our new reality
“Time is money,
Money is time
But how do we print money if we can’t print time? “
You and I work for money. Money is supposed to reflect the value of our time and energy, which becomes increasingly scarce and precious as we age. However, our money buys us less and less every day, which means that silver becomes less and less scarce and valuable as we age.
Time and money go in opposite directions. Why? Because unlike time, our money can be manipulated by the privileged few, disproportionately harming the rest of society, especially non-asset holders during times of inflation.
Time is the most precious resource because no one can create more of it; he treats everyone the same and no one can cheat time. Bitcoin brings these qualities to money by creating its own sense of time.
“Time is a concept
varies in space,
so need a new clock
to strum your own bass.
Time differs in space, which means that two working clocks can point to different times due to time dilation – think of the (fictitious) planet on “Interstellar” where one hour equals seven years on Earth. In order to allow consistency and coordination across space, Bitcoin creates its own sense of time by using blocks instead of seconds. Time stamping, in the real world of Bitcoin, is the act of constantly recording transactions at a block height.
“Time is a process
in the real past
by the present.
The process of Bitcoin is like the process of time. Time moves the unknown future into a known past through a sense of “now”. Bitcoin moves unknown future transactions into a recorded past on the time chain by the action of the time stamp in the present. Once a transaction is confirmed and time stamped with a proof of work, the block of transactions is broadcast to nodes across space and added to an undisputed record of history, and there is in the real world of Bitcoin forever. . This is how Bitcoin creates and strengthens its own autonomous reality.
The arrow of time dictates that we can only go forward, not go back. It means that history cannot be rewritten and the past cannot be changed. This immutability is an important characteristic of Bitcoin and of time. In Bitcoin’s lifetime, no one has been able to change the history of the time chain, unlike the Ethereum team that rolled back a $ 60 million transaction in 2016, or the trust banks. who faked their books. Whatever the reason, the act of rewriting the past sets a precedent that it can be redone, thus undermining steadfastness. This is a particularly important problem to be solved in the digital domain because the digital value requires validation of originality, i.e. the first and oldest version of something is the original version and therefore no longer precious than its digital copies. To establish the originality of something, we have to know its place in history – what comes before and after.
Time stamping gives digital technology a permanent place in history. In the context of digital transactions, the first confirmed version is the original version and once something is spent it cannot be spent again. If the digital past can be changed, double spending of the same token can occur, compromising the validation process by distorting the sequence of events. This distortion undermines digital scarcity and the value of digital creations. If we can change the past, nothing digital can be sacred and we are back to square one. This is why steadfastness is important.
“700Ks in they can’t catch up
Bigger, heavier, more solid bedrock.
“History is written by the victors and we brought the receipt.”
Now take this concept of originality and digital value and apply it to the Bitcoin protocol itself. The original version of Bitcoin is the one that still works today. Those who tried to fundamentally change Bitcoin created alternate versions of Bitcoin, and by all measures failed to overtake the original Bitcoin.
Some people see this lack of change as a weakness, but on the other hand, in a world where change is inevitable, steadfastness is a breakthrough. It’s easy to create a newer, brighter form of money with ever-changing governance in the hands of new leaders – it’s been done throughout history. However, it is almost impossible to create money with the steadfastness and fairness of the most precious resource on earth – time. This is what Bitcoin has achieved. Bitcoin did what it set out to do with the longest experience in the field. Unless you can go back in time and recreate this path dependent result, you are not going to create a “new bitcoin” let alone be able to put in more work than has been done in Bitcoin’s track record. over 700,000 block height, and counting.
“Here is the meaning of a fair game –
Put in more work and you will be added to the main chain.
“There is no profit in cheating,
Only a clown suffers losses while trying to win.
The act of validating transactions and writing history down the time chain requires work in the form of energy. Energy is the cost that deters bad actors from attempting to manipulate the system, because the amount of energy needed to simply double the expense outweighs the profit from doing so. Everyone faces the same deterrent. Everyone has a fair chance to earn the same reward for securing the network. Everyone must work to earn their share. Everyone plays by the same rules.
In contrast, our current system requires very little effort on the part of those with high existing stakes to continually benefit from the system. Large asset holders are more creditworthy and benefit from privileged access to new capital to accumulate more assets to hedge against inflation, etc. This virtuous circle for some is a vicious circle for others. Those who are poor in assets find it difficult to access capital to accumulate assets and often bear the brunt of inflation without protection. They are forced to take more risks compared to their existing wealth, in order to increase the likelihood of increasing their wealth.
“Hard money, real cost,
“When money is time, high quality reigns. “
When money is fiat, it is a melting ice cube that must be spent or invested, otherwise you risk losing purchasing power over time. When money is time, it becomes a store of value with a real opportunity cost for every action. Anyone who holds money in the form of bitcoin by default owns the world’s most valuable asset.
Individuals are better able to understand tradeoffs with money because we have a common denominator of time to measure across everything – from burgers to housing to energy to wages, across space and time. This means that we are encouraged to be more thoughtful in our consumption and to choose high quality goods and services that can stand the test of time, because time is precisely what we give up in order to acquire something else. We are moving from a mindset of growth at any cost to a mindset that takes the opportunity cost into account in a thoughtful way. By creating money from time, Bitcoin fundamentally changes human incentives and the future of humanity.
“Tick tock next block,
The time chain does not stop.
Kudos to Gigi Der, Robert Breedlove and Saifedean Ammous for their wisdom on Bitcoin, fiat and time. Special thanks to my partner James Viggiano for his thoughts on the article.
This is a guest post from Tip Piumsomboon. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.