The Significance of Economic Velocity
It’s Earth Day, so we’re going to discuss just how green Bitcoin was meant to be. Bear with me, friends!
BSV stands out in the crowded field of blockchains with its distinctive approach to scaling: no block size limit, and heavily optimized version of the original Bitcoin protocol. This design choice is not merely technical but foundational, enabling BSV to handle more transactions per block—akin to trains that carry more passengers per journey.
In short, being green is about efficiency. Get as much as possible out of whatever energy goes into a task!
Here comes an analogy: If BTC is a train that can only carry around 2,500 people per trip, then BSV is a train that can carry millions of people per trip. That’s more efficient, right?
Imagine spending billions of dollars per day on wasted energy just to protect the wealth of the few aristocrats who can afford to use the system! That’s BTC.
This increased capacity is crucial for enhancing what economists like Ludwig Von Mises have emphasized as critical for the health of an economy: the velocity of money.
The velocity of money—a measure of how quickly money passes from one transaction to another—illuminates the economic efficiency and vibrancy of a system. Mises, a prominent figure in the Austrian School of Economics, argued that higher velocity is indicative of a more dynamic economy. By potentially increasing transaction throughput, BSV aims not just for technical performance but for an economic impact, striving to be a blockchain that supports robust economic activity. This is in stark contrast to the desire for BTC to become less productive as it absorbs value by doing nothing.
Economic theories supporting BSV’s approach
One of the cornerstone ideas from Ludwig Von Mises concerning economic policy is the emphasis on the velocity of money. Mises highlighted that the frequency with which money changes hands is a vital aspect of a healthy economy, and this is a major reason why big blockers support such a system. It is also why I have criticized heretics like Saifedean Ammous for his completely backward attempts to turn BTC into an asset that has anything to do with Austrian economic theory. It doesn’t. Austrian economists were advocates for spending hard money as a measure of health in an economy. They understood the efficiency of sound money in making commerce more free, more liquid and more attainable for everyone.
Technological and efficiency advancements
BSV’s strategic decision to invest in being able to increase block size until the whole world can use the chain for commerce fundamentally transforms its approach to scalability and efficiency. Unlike BTC, which expends considerable energy to produce 1MB blocks, BSV’s design allows for the creation of much larger blocks using a proportionally less amount of energy.
While ASIC hashing rigs are central to the mining process, their energy consumption is not directly correlated with the size or number of transactions in each block. Instead, they are just a measure of mining difficulty, so there’s no practical reason why hash rate should be high on BTC except to say that it is wasteful. However, larger blocks like those of BSV do not require exponentially more energy in hashing, which is a significant point of distinction from BTC.
Societal benefits and trade-offs
BSV’s ability to process large blocks full of valuable, economically impactful transactions efficiently not only demonstrates its technological prowess but also its potential to drive substantial societal benefits. The scalability of BSV could dramatically increase transactional throughput, making it a viable backbone for global financial transactions. The opportunity here is incalculable. Imagine replacing Mastercard (NASDAQ: MA), Visa (NASDAQ: V), Swift, FedWire, etc… All with Bitcoin for near-instant, near-free commerce for everyone on earth! This capability aligns well with the broader social good, akin to other essential services that consume significant energy.
Just as society accepts the energy consumption of hospitals because of the crucial services they provide, BSV’s energy usage can be viewed through a similar lens. While it consumes energy, the economic and social utilities it provides justify this expenditure. The network’s ability to enhance economic velocity—facilitating quick, large-scale transactions—mirrors the critical operations of other vital infrastructure that supports societal functions.
Conclusion
With its ability to scale to the size of global commerce, BSV is not just pushing the boundaries of transaction capacity but also redefining the standards for energy efficiency in digital transactions while giving hope to the global poor to be able to connect to the world’s digital economy.
This innovative approach leverages the principles of economic velocity, as highlighted by economists like Ludwig Von Mises, to ensure that every kilowatt of energy is utilized to its maximum potential. By enhancing the number of transactions per block, BSV distributes the energy cost over a greater number of transactions, thus increasing the economic output per unit of energy consumed.
The societal benefits of BSV are clear: it offers a scalable, efficient solution that could serve as the backbone for a new global financial system. As technology advances and more sustainable transaction processing practices are adopted, BSV stands to further diminish its environmental impact. We invite further research, discussion, and engagement with BSV as a sustainable technology in the blockchain space so that we can ultimately challenge and disrupt the global market for instant payments and cash: a multi-trillion-dollar opportunity for disruption. The potential for BSV to contribute significantly to a greener and more efficient global economy is immense, and exploring these possibilities is not just beneficial but necessary for the future of finance and technology.
Watch: IoT & blockchain integration critical to solving climate change
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
