The definitive guide to Britain's success in the twenty-first century
We all have mad ideas after several pints. Imagine one drunken evening someone is delivering their new idea to create a new type of world digital money:
“Ok, so its simple, we setup a computer that runs a really difficult problem to solve, like finding a prime number within a range of very large numbers. Each time we find such a new prime, we call it a ‘new coin’ in our new computer currency. This is great as the currency is stable as few new bitcoins can be found as it is so difficult, takes too long and uses masses of computing power.”
Brilliant idea Ian, so if it catches on and people want more of this new currency what happens?
“Easy, people just setup new computers running the prime number problem, and wham bang, you have more new coins.”
So, lets get this right, you want to create a system for a new currency based on using massive computing power to create the new money?
“Yep, exactly”
What’s the point?
“Well because it is difficult and costly to find new coins (new primes) then the currency is effectively stable and will never devalue itself by someone or some country creating more of it overnight.”
OK, Ian, so lets say this new currency takes off and becomes really useful for buying, selling and valuing everything, what is the cost of creating new money to meet the growth in wealth in the world that happens naturally?
“Ah ha, haven’t really thought that one through yet, mmm… costs for increasing the currency will be high, so yep not ideal.
Ha, ha Ian, you have just created a bonkers system for new money for the human race, one that means we actually spend a chunk of our wealth completely unnecessarily creating a money system that doesn’t represent anything anyway, after all, money is just a made up tool for us to use to help trading.
By the way this would create an unnecessary new energy drain just at the time when we need to reduce energy or at least use it sustainably.
And …oh, hold on, what happens to your new world computer currency when we crack the quantum computer in a few years?
“Ahhh, hell! The model breaks, primes a’ plenty” all control lost, everyone loses all their money! ...Look I’ve had a few pints, I got a bit too clever”
Why not just have a world bank and base the new money on number of people in the world, pretty stable, and it grows naturally?
“Yea, that’s sound better”
Cheers, Ian
...Good job we didn't go down that bitcoin dead end then!
CST
Worldwide, bitcoin mining consumes an estimated 128.84 terawatt-hour (Twh) per year of energy.
This is more than entire countries such as Ukraine and Argentina, according to the Cambridge Bitcoin Electricity Consumption Index, a project of the University of Cambridge.