In a recent social media post, Peter Schiff of Goldbug dismissed the theory that Bitcoin could be seen as a non-inflatable ledger for storing economic energy.
Can Bitcoin become a battery?
Schiff is responding to a particular narrative championed by MicroStrategy CEO Michael Saylor and other Bitcoin maximalists.
Thaler often argues that money is essentially “economic energy.” Working consumes energy.
Once you get paid, that energy is stored for later use. He argues that fiat currencies “leak” this energy and that gold is difficult to transport. Therefore, Bitcoin is “digital energy”. It is considered as a battery that stores economical products without loss over time and can be transmitted anywhere (almost instantly).
Saylor and other Bitcoin evangelists are not alone in their bullishness. In a recent podcast appearance, Tesla CEO Elon Musk described Tesla as a “currency based on fundamental physics” because of its inherent connection to energy consumption. Interestingly, Musk predicted that the very concept of money would eventually become obsolete. He envisions a post-scarcity world powered by AI and robotics.
rebuttal
At the same time, electricity cannot be extracted from Bitcoin. The energy used to mine Bitcoin is consumed at the moment of creation. It's gone forever. If the power grid goes down, holding 1 BTC will result in zero watts of power. This is precisely Schiff's argument. Therefore, there is literally no “storing” of energy.
By comparison, gold mining also consumes large amounts of energy (diesel, electricity). But Schiff argues that this is not wasteful, since the end products are physical metals needed for electronics, dentistry, aerospace, and jewelry. Energy was “transformed” into useful industrial products.
