Think Bitcoin™ Issue #40
Bitcoin Is the Most Important Issue for Both Millennials and Gen Zs (Most of Them Just Don’t Know It Yet)
Hey friends, welcome back to Think Bitcoin™ for issue #40. Hope everyone had a great holiday weekend. Special welcome to the new subscribers. I’m glad you’re here. As always, if you have any questions or comments, feel free to reach out. You can also find me on Twitter (@TheWhyOfFI) and connect with me on LinkedIn.
In this issue:
Long Reads: Bitcoin Is the Most Important Issue for Both Millennials and Gen Zs (Most of Them Just Don’t Know It Yet).
More Thoughts From Me: A thread on remembering that Bitcoin is a tool, not an end in itself
Content Round-Up: 2 podcasts, 2 articles
As always, if you find this newsletter interesting or useful, please share it with others who might find it interesting or useful, too!
Long Reads
Bitcoin Is the Most Important Issue for Both Millennials and Gen Zs (Most of Them Just Don’t Know It Yet)
In Deloitte’s 2022 Gen Z and Millennial Survey, they found that the top two concerns for both generations, respectively, were cost of living and climate change. About 75% of respondents reported a belief that the world is “at a tipping point in responding to climate change, but less than half are optimistic that efforts to protect the planet will be successful.”
The report also revealed that about half of millennials and Gen Zs live paycheck to paycheck.
The growing financial stress on these two generations is well-documented.
Per Deloitte, “around three-quarters of Gen Zs (72%) and millennials (77%) agree that the gap between the richest and poorest people in their country is widening,” which shouldn’t shock anyone.
These two generations, which make up a little over 40% of the U.S. population, are exerting increasing sociopolitical and cultural influence while, nevertheless, the problems they care most about are getting worse. And this is despite real accomplishments in terms of influence, a leftward shifting of the Overton window, and a groundswell of grassroots energy directed toward these issues.
So what’s the problem here?
The problem is that the solutions most younger folks are advocating for are not actually solutions. Perversely, many of these proposed solutions actually exacerbate the problems these young people (of whom I am one) so urgently seek to resolve.
Now, I don’t think we should blame or denigrate those who don’t really understand or even think about monetary policy or the state of money itself, and how these ideas are integrally related to many of our largest societal problems. I’m not here to argue that the youth must necessarily be grabbed by the lapels and harangued about the Fed. Because, despite being important, I don’t think this approach will be especially fruitful.
Put simply, I think rallying young people around a monetary policy is the more arduous path to bitcoin adoption. Rallying them around a more promising vision for the future, one in which their pressing concerns are credibly addressed (and addressable) will, in my opinion, be more productive.
So much of the monetary stuff is intentionally abstruse and complex. While most of us in Bitcoin enjoy geeking out about monetary policy and the plumbing of the existing financial system, the vast majority of eyeballs start glazing over pretty quickly after a few minutes of it. With respect to millennials and Gen Zs, it’s also not effectively meeting them on the level of their concerns.
But Bitcoin does uniquely address the issues these generational cohorts care most about, among them wealth inequality/cost of living and the climate. Any vision of a future that is better than the present necessarily involves a productive treatment or resolution of these two issues.
Because Bitcoin (and bitcoin mining) is situated so well to solve some crucial root causes of these problems, millennials and Gen Zs should be advocating for it with all their vigor and urgency.
Some of you are probably saying wait a minute, how the hell does bitcoin mining, a process that uses energy, actually help fight climate change?
Let’s talk about it.
We now know that methane is a much worse offender than carbon dioxide when it comes to its warming effect. Based on our new knowledge of how bad methane is, Inger Andersen, Executive Director of UNEP (the United Nations Environmental Program), said “cutting methane is the strongest lever we have to slow climate change over the next 25 years.”
Where does most methane come from? Primarily from three major sources: the oil and gas industry, landfills, and animal agriculture. With respect to the oil and gas industry and landfills, it’s the result of flaring natural gas, which just means burning it since it can’t be effectively or economically used (transportation costs for this natural gas is too expensive and no traditional user of electricity would want to co-locate near a landfill or an oil field). So they burn it using flare stacks. You’ve probably seen these before. They’re the poles with flames at the top.
The idea is you burn as much of the methane as you can, because then it’s converted into carbon dioxide, which, though also obviously not good for the atmosphere, is significantly less harmful than methane (per the Environmental Defense Fund, methane has more than 80 times the warming power of carbon dioxide over the first 20 years after it reaches the atmosphere). These flare stacks are pretty efficient at burning methane, but not 100%, so some methane still escapes (about 8%, according to the data we have). Enough to be very, very damaging.
There isn’t a lot of financial incentive to convert the natural gas to electricity, though (as opposed to flaring it), because you need to set up a bunch of transmission towers, and these are very, very expensive. You’ve probably seen these before, too. They look like this:
So if transporting it is out of the question, what about converting it to electricity and using it on-site? Well, there aren’t a lot of major users of electricity co-locating on-site with oil fields and landfills. And who would want to?
So, traditional thinking says there’s no financially sensible way to convert the natural gas to electricity, which makes flaring it as efficiently as possible the most environmentally friendly solution.
Traditional thinking does not take into account the unique characteristics of bitcoin mining, though. Bitcoin mining operations can co-locate at oil fields and landfills. The natural gas can then be converted to electricity to run the bitcoin mining machines. This is much, much more environmentally friendly than flaring. Significantly less methane gets released into the atmosphere. And the best part is that there’s actually financial incentive to do this, because miners earn bitcoin.
Since oil fields and landfills account for a huge amount methane, bitcoin mining, as the best and only technology capable of financially incentivizing a co-location at these sites, is uniquely positioned to reduce the amount of methane released into the atmosphere.
Daniel Batten has done great work explaining all this, and he’s done calculations quantifying how much warming bitcoin mining could prevent if implemented widely at these sites.
Take a look at all the landfills in America:
What’s incredible and bears repeating is that bitcoin mining is the only technology that is currently ready for implementation and provides financial incentive to do so. It is extraordinarily difficult to imagine a more effective (and incentivized) user of electricity willing to co-locate at a landfill or an oil field. Sure, a perhaps more ideal solution, if we were thinking exclusively about the climate, would be creating less refuse or wide adoption of plant-based diets. But these are behavioral shifts that are simply not going to happen anytime soon. And with respect to plant-based diets, spirited debates about the health implications of such a shift persist. Bitcoin mining on the other hand, is ready now and requires no immediate behavioral transformation or coercion.
In addition to reducing methane emissions, which is hugely impactful for combatting the effects and the speed of climate change, bitcoin miners also help incentivize (and make more efficient) the build-out of renewable energy. Energy grids have to balance supply and demand of energy, which gets tricky the more renewables are being used because renewables like wind and solar can be unpredictable and produce the most energy often at hours when energy demand does not match it. Supply/demand mismatches lead to occasions when energy is negatively priced, which is obviously not optimal when it comes to building out the infrastructure for more renewable energy.
What is needed is an energy consumer that can operate anytime, power down or up anytime on a moment’s notice to absorb excess energy supply from renewables, and fill in the gaps of supply/demand mismatches. This helps to economically incentivize build-out of renewables. Bitcoin mining is able to do this more effectively than any other industry.
These are radically condensed explanations of how bitcoin mining can be used as a powerful tool to fight climate change, but the overarching point is no other technology is as effective and as immediately actionable.
Influential millennial/Gen Z climate activism organizations like, for example, the Sunrise Movement, should be fighting for the growth of bitcoin mining, and anybody with a sincere interest in addressing climate change should be doing the same.
With respect to wealth inequality and cost of living, I’ve written extensively before about how a manipulable and inflationary monetary system devalues the currency and, by doing so, punishes regular wage-earners while rewarding asset-holders. As a result of the yawning wealth gap this monetary system creates, many younger people are drawn to redistributive policies, debt jubilees, and helicopter money solutions, each of which is a band-aid for a bullet wound. Believing severe wealth inequality is inherent to capitalism, they are also increasingly interested in alternative economic systems.
But extreme wealth inequality is not the inevitable result of capitalism. It is the result of a fiat system in which those closest to, and exercising the most influence over, the rules of the monetary network reap the most benefits. When we flood the economy with new money, which we’ve done more or less since 2008, the money goes first to the most creditworthy institutions and individuals, e.g., the wealthy, who then pour them back into assets, juicing the prices of those assets, which are disproportionately owned by the wealthy. Meanwhile, the increase of the monetary units in the system makes the existing ones worth less, which effectively transfers wealth from wage-earning savers to wealthy, capital gains-making asset-holders.
The solution to this problem is not to continue to expand the money supply and hand newly created units out to more people. It’s to fix the money itself. And, as money that cannot be manipulated, this is what Bitcoin does.
This is a transitional time in history, and I think most millennials and Gen Zs can see and feel that on some level. They are rightfully deeply concerned with issues that, if left wholly unresolved, will continue to tear at the social fabric until a breaking point is reached. In light of this dire prognosis, it’s of paramount importance that these issues be dealt with intelligently and with the most potent tools.
Bitcoin mining is the most powerful tool millennials and Gen Zs have. Most of them just don’t know it yet. So it’s our job to make sure they do.
More Thoughts From Me
Content Round-Up
1. “Bitcoin for Fairness,” an episode of the What Bitcoin Did podcast with Anita Posch. Few people are doing more for Bitcoin on a daily basis than Anita. In this episode she talks about her recent work in Africa and her nonprofit, Bitcoin For Fairness.
2. “Inheritance Planning and Bitcoin Custody,” an episode of the Blue Collar Bitcoin podcast with Justine Harper, who is VP of business development at Unchained Capital. Many of the most common questions I get about Bitcoin relate to custodying it. In other words, where and how should one custody his/her Bitcoin. If you are someone looking for a in-depth discussion on this issue from an expert, check out this episode.
3. “Bitcoin Lightning Network vs Visa and Mastercard: How do they stack up?” This is an article from Coin Telegraph on the Lightning Network, its throughput, and how it compares to payment technology like Visa/Mastercard.
4. “A Collection of Bitcoin Values,” an article by Jack Ronaldi in BTC Times. In this piece, Ronaldi outlines ten values and principles that underlie his support for Bitcoin. In the media and in certain political circles, it’s depressingly common for Bitcoiners to be maligned, treated monolithically, or labeled “shadowy super coders.” But Bitcoiners actually believe quite passionately in many of the values Bitcoin skeptics purport to believe in. If you’re someone who thinks Bitcoiners are a little nuts and predominantly fringe, I’d recommend you check this piece out.
My favorite is value/principle number ten, which is optimism. The most under-appreciated and misunderstood value of many Bitcoiners is their optimism. In Ronaldi’s words:
“Be optimistic about the future. People lacking optimism in their vision will not persevere in the face of extreme uncertainty and multiple setbacks in their quest to help make the world a better place. Without optimists, how can we hope to build a better future?
A lot of skeptics will call us pessimistic on liberal democracy, I see it differently. I see us as optimistic on a new system. A system that more closely abides by the democratic ethos of the people, by the people, where the control of one of the most important layers of society, the monetary layer, is put into our hands.”
Tweet(s) I’m Thinking About
From Steven Lubka:
I’ve written and spoken a lot (including in this very issue) about how it’s common for those who affiliate, in whole or in part, with the political left, to identify many of the same problems with our current economic system as Bitcoiners but propose an entirely different program of solutions. These proposed solutions from the left are predominantly redistributive in nature and, as I’ve argued before, mislocate the source of the problem. Mislocating the source of the problem guarantees a failure to solve it. Steven sums this up so succinctly in this tweet and its accompanying graphic.
As always, thanks for reading! If you enjoyed it or found it useful, share this newsletter widely and freely!
“Civilization is in a race between education and catastrophe. Let us learn the truth and spread it as far and wide as our circumstances allow. For the truth is the greatest weapon we have.” -H.G. Wells
See you in two weeks,
Logan
SUPPORT
Send bitcoin to my Strike
SOCIAL
DISCLAIMER: I am not investment advisor and this is not investment advice. This is not, nor is it intended to be, a recommendation to buy or sell any security or digital asset. Nothing in this newsletter should be interpreted as a solicitation, a recommendation, or advice to buy or sell any security or digital asset. Nothing in this newsletter should be considered legal advice of any kind. This newsletter exists for educational and informational purposes only. Do your own research before making any investment decisions.
© Copyright Logan Bolinger, Think Bitcoin LLC
Appreciate the time and effort you took to explain bitcoin mining, its energy use and role in helping to combat climate change!