Dana Blankenhorn

The True Cost of Bitcoin

If America’s enemies wanted to bury this country under energy costs, it could do worse than to have invented Bitcoin.

Greed has made Bitcoin the world’s energy sink. Bitcoin uses as much energy as the country of Argentina. Most of this new Bitcoin is being produced in China, leaving most of the country dependent on coal. It’s not just China being hurt. A Bitcoin miner in Montana, a former patent troll, is keeping a local coal-fired power plant operating. 

The waste doesn’t stop there. It costs about $25 million of electricity per day to run the Bitcoin network.  The current estimate for Bitcoin energy consumption this year is over 100 Terawatts.  And it’s not just Bitcoin. Every cryptocurrency is an energy hog. 

Some cryptocoin advocates, like Ethereum inventor Vitalik Buterin, admit the truth. He wants to change Ethereum’s algorithm so it uses less electricity.

But Buterin is in the minority. Most Bitcoin advocates claim what I just wrote is a myth. It’s supposed to use a lot of energy, at first, they claim. The existing transaction networks also use energy. Bitcoin’s use will drop once it replaces every other currency. Oh, and if you’re using hydropower or “excess” power from otherwise unused sources, what’s the harm? 

This is bullshit. Bitcoin isn’t a currency. Currency values remain relatively stable during a trade, otherwise they’re useless. Bitcoin is an asset, a global index of fear and greed.

Range Anxiety

Wall Street doesn’t know this, but the electric car market is in deep trouble. 

The problem is “range anxiety.” Zoom in on this map to see where we are now. The problem is acute, even in California.

Today, most electrics are used close to home. You buy a 240-volt plug, you snuggle the car up close, and you recharge it at night, just as you do your phone. Fine if you have a house. But not everyone lives in a house.

Some apartments have opened charging stations in their garages, and there are lots of on-street 120-volt and 240-volt “free charging” places. But you can’t scale the business that way. Free chargers quickly get full as electrics cease being a curiosity. And how long are you going to give electricity away? Third (and perhaps most important) wall current takes all night to deliver a fill-up. Most stations today are delivering wall current.

Resources and the New Era: What the Best Futurists Got Wrong

This coming year represents the start of a new era.

It’s an era defined by technology, as much as the previous era was defined by resources.

I’ve written here many times that the gating factor for technology is human capital. The more trained, empowered, and willing human minds you can bring to bear, the more you can grow. Contrast this to the resource era, where the key to growth was control, over the land and what lay on or beneath it.

The politics of 2020 were defined by the clash of these two economies. It was expressed throughout the culture. But the market made its verdict clear, and it was a true landslide.

Biden’s Solar Problem

Assuming Joe Biden wins Tuesday, he has a problem.

If he doesn’t win, America and the world have a bigger problem, one I don’t think we can overcome. So, let’s assume the world goes on for a moment.

Joe’s solar problem is something the computer industry faced around the time when I was becoming a reporter, in the late 1970s. Until then, computers were capital goods. They were either leased or purchased over time with loans. Even my first PC purchase, in 1982, was with a loan.

Loans and leases built a business model that was smashed by the PC era. Both loans and leases carry huge external costs and margins. My Massapequa neighbors had nice houses and cars. Their fat sales or engineering salaries were paid for by IBM customers, who compared the cost of having IBM handle their problems to the cost of doing things manually and signed their names to lines that were dotted.

In 1981 IBM didn’t just start selling a PC. It became a computer products company. It licensed the likeness of Charlie Chaplin, who had died in 1976, from his estate. It used the rose he offered his amour in City Lights, painting it a bright red. Then it distributed the PC through computer stores, who placed it on shelves alongside the printers and other peripherals. By the 1990s you wouldn’t think of hiring a “computer specialist” to sell you stuff, unless we were talking about a networking expert who got his own hands dirty.

The Common Good

Without an overwhelming victory for democracy on November 3, I’ll be glad to die.

Trump is the ultimate expression of a basic misperception, that private goods matter more than the public goods, that national well-being matters more than global well-being, that fences and borders can isolate and separate us.

This is especially true when it comes to the environment.

My children face a bleak future unless current climate trends are reversed. But the U.S. can’t change it alone. Every country must do its part.

The ice caps’ disappearance means many cities around the world are doomed. New Orleans is doomed. Miami is doomed. New York City is doomed. So are Calcutta, Mumbai, Shanghai, and Kuala Lumpur. Sea level rise means these places will soon be underwater.

Meanwhile, the methane of the Siberian tundra is bubbling to the surface. Fires in the Amazon and West mean the Earth can no longer breathe. The “habitable” part of the U.S. will be cut by two-thirds within 50 years. The oceans are warming so that, along with overfishing, all that’s left will be jellyfish.

In past bouts of global warming, when the ice caps disappeared, nature adjusted. Cooling trends returned and nature came back. With man-made global warming, there’s no natural reversal. It takes 80 grams of energy to melt a gram of ice. Once the ice is melted, 80 grams of energy take its temperature to 112.

Better Days Are Coming

When you hit bottom, when you are at the end of your rope, when you're in true despair, you can’t imagine getting out.

America is at the bottom. We’ve found that what we said about ourselves was tissue thin. The economy has collapsed around our ears. Death is all around us.

But better days are coming.

We can beat COVID-19. We know how to do it. Other countries have done it. Europe and much of Asia are opening, coming out of their cellars, living again.

The key is cooperation.

That’s all it takes. Wear a mask when you go out, or a face shield. Try to stay home. Wash your hands. Stay away from other people. Love thy neighbor.

The virus travels on the droplets you expel when breathing. It travels fastest when you sneeze, but even those droplets don’t travel much further than 6 feet. If 95% of us cooperate with each other, then the rate of transmission will drop below 1 and we’ll be back on the downward slope again.

Toward a New Normal

A new, post-pandemic normal is coming into view.

It looks different from the world we left.

Presidents and Governors won’t decide when states open back up. Consumers will. Most Americans believe what medical experts are telling us.

That’s not what we’re seeing from Trump, or any other Republican. This willful ignorance is going to get people killed.

The most logical program is to practice social distancing for a year or two, until the pandemic has passed, and vaccines are widely available. Meanwhile, all industries that depend on crowds will have to build new business models. When sports come back, it will be to empty, or near-empty, stadia. Movie theaters and malls are gone. So are restaurants where people sit close together. So are cruise chips and casinos. Bailing them out is throwing money down the drain.

Meanwhile, the Federal Reserve has dramatically expanded the money supply, handing out cash to keep the economy going now. The money will remain after the storm has passed. Further money supply increases will be needed to repay today’s debt. The pandemic has whipped deflation. The worry now is the value of money.

The economy is getting through thanks to the Internet. The Internet lets us continue to work from home. The Internet lets us order the goods we need to get through this. The Internet is telling us what’s what and what’s not.

The 1918 “Spanish flu” pandemic happened two years before the first radio broadcast. It makes a difference. (To learn more, I recommend Pale Rider  by Laura Spinney.)

Blessings of the Pandemic

The economy has tanked.

We are all in our homes, scared out of our minds.

But there are blessings amid the ruins.

The air is cleaner. The water is cleaner. It is quieter. Animals have come out of hiding around the world. People have re-learned the value of family. Science matters again. Community matters again.

There were pictures posted, early in April, of Venice with water you could see through, of LA without smog. Those were retouched. Things aren’t that good.

Still, they’re immeasurably better than they were.

The climate crisis doesn’t have to destroy that progress. Unless we have a death wish.

After the War on Oil

As the war drums beat post-war planning isn’t given a second thought. (To the right, the Air-Gen, which pulls energy directly from the air.)

We can do better. We need to do better regarding the War Against Oil.

Make no mistake. The War Against Oil, which I first wrote about over a decade ago, is behind our current crises. Saudi efforts to destabilize the Middle East are funded by oil. Russian efforts to destabilize the U.S. are built on oil. Trump is all about oil.

But oil is losing. Oil is doomed. The coronavirus, COVID-19, proves it. The International Energy Agency now sees falling global demand for oil at the end of the year.

We should have seen this coming. While Democrats were arguing about “banning fracking,” the frackers were flaring off more natural gas than ever before. Even with that, they couldn’t get $2/mcf for it. The UAE recently said it found a giant pool of gas, close to its export terminals. Texas gas is losing what markets are left.

Elizabeth Warren on Tech Street

Ronald Reagan was not oil’s first choice in 1980.

John Connally was first. George H.W. Bush was second. Oil accepted Reagan and, through Bush, won political power for a generation, power it still has in the face of tech’s need for human capital.

So it is that we come to the 2020 game. Tech has been in the economic driver’s seat for 12 years, but in the political back seat for three. Tech has suffered for this. Its priorities have been ignored. It has been scapegoated by an Administration working in the interests of oil.

Technology is Democratic. It’s not a question of who tech prefers. Tech needs a seat at the political table, it will have a seat at the table, and that table will be Democratic. Assuming, of course, that democracy survives.