The history of money counts about 5000 years and has seen various, at times bizarre, manifestations of monetary instruments. From shells to tulip bulbs, to silver and gold, to, finally and unfortunately, paper money, the evolution of the universal means of payment has reflected what at a certain historical period of time held an intrinsic value and as such could be exchanged for goods and services.
One fundamental feature that unites all historically known forms of money is scarcity. What is used as money should be, in layman terms, hard to come by. Gold is without a doubt hard to come by and holds value without visible deterioration for the longest periods of time. However, in 1933, the gold standard was abolished by executive order #6102 that required US citizens to exchange their gold holdings for US dollars for fear of a ten-year imprisonment. US dollars could theoretically be exchanged back to gold until 1971 when President Nixon dealt a final blow to the gold standard canceling the direct US dollar convertibility to gold. He promised, however, that the US would at some point return to the gold standard. Alas, that promise never materialized.
Since that time, the world’s monetary system has been at the whim of governments, i.e their central banks that print fiat money . Thus, the key feature of money—scarcity—is no longer there. The unbridled minting of fiat money leads, among other things, to crippling inflation and financial crises. However, a momentous event took place in the midst of the 2008 financial crisis when Satoshi Nakamoto released an open-source software project. Bitcoin was born.
The advent of Bitcoin heralded a new era as Bitcoin’s monetary policy is enforced by the impenetrable cryptography of blockchain, making it a finite resource, the money with absolutely limited supply, the epitome of absolute scarcity as only 21 million bitcoin units will ever exist and no incremental units will ever be produced. Bitcoin’s scarcity surpasses that of gold or any other monetary medium for that matter.
After bitcoin, many other cryptocurrencies have been launched, each bearing its distinctive stamp; some, like Ethereum, have become mainstream, others did not survive. In the wake of cryptocurrencies arrival, a whole demographic of modern-day crypto financiers has emerged, mainly fintech professionals who staunchly believe in crypto assets, their future, and the potential to upend the world of finance, and, by consequence, oppose fiat money.
Cryptocurrencies are ‘mined’, not in the way gold is mined but crypto mining involves huge energy consumption. Bitcoin and Ethereum mining together consumes as much energy as Indonesia, a country with a population of 273 million. That said, minimizing energy consumption or using green sustainable energy for mining has come to the forefront of sustainability advocates.
Samir now serves as a Chief Strategy officer for Bit Digital, a dynamic bitcoin mining company, where his primary mission is to turn Bit Digital’s mining into a sustainable operation. Samir was able to help ensure the company’s to a majority carbon-free operation. As a result of the transition, the Wall Street Journal dubbed ‘the great mining migration’, thousands of computers were moved from China to the US and powered many of them with a renewable energy source.
We will continue closely monitoring efforts on the way to making Bit Digital’s mining operations yet more sustainable.