Bitcoin...

"THE" Thermodynamic Savings Account

Thermodynamic Savings Explained

Introduction:

I find value to be a fascinating concept and an even more fascinating practice. When governments claim power & tax increases, they are actually claiming they are better at resource allocation than you are(free markets disagree). There’s an idea that's been making waves in the world of digital currency.

Have you ever heard Bitcoin described as "thermodynamics savings"? This term was coined by Michael Saylor, the CEO of MicroStrategy and a big advocate for Bitcoin. But what does it mean? Let's break it down .

Understanding Bitcoin:

Bitcoin is a type of digital or "cryptocurrency" that operates independently of a central bank. It's created (or "mined") through a cryptographic process where powerful computers solve mathematical problems. The total number of Bitcoins that can ever be mined is capped at 21 million, which makes it a finite resource.

Thermodynamics and Bitcoin:

Thermodynamics is a branch of physics that deals with the relationships between heat and other forms of energy. One of the fundamental principles of thermodynamics is the law of conservation of energy, which states that energy cannot be created or destroyed, only transferred or changed from one form to another.

When Michael Saylor talks about Bitcoin as "thermodynamics savings", he's referring to the idea that Bitcoin, like energy, cannot be created out of thin air. The process of mining Bitcoin requires a significant amount of energy, and this energy is then "stored" in the Bitcoin itself. In other words, the value of Bitcoin is backed by the energy and computational work that goes into creating it. Very similar to the cost to have fiat printed, gold mined, and raw materials converted into products, except it’s cryptographic instead of mechano-chemical.

Bitcoin as a long term Store of Value: (Savings)

What does this mean for you as a potential Bitcoin saver? It means that Bitcoin acts as a "savings account" for energy. When handled properly your Bitcoin is beholden only to your private key. When you buy Bitcoin, you're essentially buying a piece of the energy that was used to create it.

Because the number of Bitcoins is capped, this energy can't be diluted by creating more Bitcoins(unlike fiat and $USD). This makes Bitcoin the most durable, transferable, and secure store of value. But it’s features are an upgrade from gold and other precious metals because it’s cheaper and easier to transfer. Alongside your ability to “self-custody” your private key, where storing or transferring millions in gold becomes prohibitive.

Conclusion:

The effective use of Bitcoin as "thermodynamics savings" is a fascinating way of looking at this digitally architected ledger(just like a banks ledger). The “thermodynamic savings” idea highlights the unique properties of Bitcoin and its capabilities as a store of value. As with all investments, it's important to do your own research and understand what you're buying. But hopefully, this explanation has given you additional perspective on the world of Bitcoin.

Check out Inverse Jim Cramer SJIM 0.00%↑ for Giggles, and MSTR 0.00%↑ if you’d prefer investing in a BTC investment company.

Questions you can ask GPT to learn more about Bitcoin:

1. "Explain how Bitcoin mining works and why it's important for the Bitcoin network."

2. "What are the key differences between Bitcoin and Ethereum, and how do these differences impact their use cases?"

3. "Discuss the concept of 'halving' in Bitcoin and its impact on Bitcoin's value."

4. "How does Bitcoin's blockchain technology ensure the security and integrity of transactions?"

5. "What are the advantages and disadvantages of Bitcoin as a store of value compared to traditional assets like gold?"

6. "Explain the role of 'private keys' in Bitcoin and why they are crucial for security."

7. "Discuss the concept of 'decentralization' in Bitcoin and why it's considered a key feature of cryptocurrencies."

8. "What are 'smart contracts' in the context of cryptocurrencies, and how do they differ between Bitcoin and Ethereum?"

9. "Explain the concept of 'proof of work' and 'proof of stake' in cryptocurrencies. How do they contribute to the security of the network?"

10. "What are the best practices for securely storing Bitcoin and other cryptocurrencies?"

I have provided the answers below.