All money is physical. Even digital money. This is because at the core, digital money is just a unique arrangement of electrons stored on a computer somewhere in the world.
This is why it really frustrates me when I get the comment that “bitcoin is not backed by anything” or “bitcoin doesn’t exist in physical reality”. Nothing can be further from the truth.
Bitcoin is made possible not by shiny yellow rocks, or green pieces of paper, but by energy. When electrons flow through logic gates, or are arranged in disk storage in just the right way, they represent bitcoin.
In this article, I’m exploring a fun idea I heard on a podcast. Bitcoin is the 0th element on the period table.
Element Zero
Hydrogen is element 1 because it has 1 proton and 1 electron. Bitcoin is element 0 because it has no protons or neutrons, it is made of only electrons.
Bitcoin the Commodity
Bitcoin is energy money. It is commodified, and tokenized energy. When combined with human ingenuity, it is energy that can be moved anywhere at the speed of light, and deployed to take on a task. This harkens back a particular definition of money that I resonate strongly with.
Money is stored energy.
Henry Ford envisioned a day wherein the world money (at the time gold) would be replaced with a ubiquitous and abundant form of exchange; energy itself.
Ford believed that all wars were caused by bankers and gold. It doesn’t matter which nations are fighting with one another, it is central banks that are funding both sides.
So Mr. Ford gave the public the idea that if the control and manipulation of gold was removed, so too would the result of the manipulation (war).
Bitcoin is the energy based money that cannot be controlled. It is a commodity made up of pure energy. It is made of the raw material of the universe, and human action; energy.
The Disincentive for Violence
Why does this kind of money stop wars? Scroll back up to the quote about placing the power of a bank in the hands of humans. This is an irresistible power that no person or group of people is able to control. Bitcoin takes the power to be a bank away from the people.
Built directly into bitcoin is the ability to be your own bank. Banks were only necessary to protect the gold deposits of the people. Gold needed to be protected because it is a form of money that can be taken by violence. What happens when there is a money that cannot be taken by force?
Such a money creates a disincentive for violence. If someone were trying to steal my gold, they can just kill me and take my gold. My cooperation is not required in order for the attacker to get what they want.
If I was attacked by someone trying to steal my bitcoin, the scenario becomes slightly more interesting. The attacker requires my cooperation in order to take my bitcoin. If they kill me, I’m dead, they get nothing, and they will hopefully go to jail.
In an ideal situation, I’ve configured my bitcoin wallet such that I alone cannot unlock it (MultiSig). In this scenario, I am useless in the attacker’s pursuit to enrich themselves.
If we scale up this example to the level of war-faring nations, there is no bitcoin (money, wealth) to be gained as the spoils of war.
When a New Element is Found
Bitcoin as a sigil of peace is motivating enough for me to put all my time and effort into the proliferation of Bitcoin. Another thing worth exploring is the prospect that Bitcoin marks the discovery of something genuinely novel.
In an earlier newsletter, I talk about how Bitcoin marks the discovery of absolute value/scarcity (thanks Robert Breedlove for this idea). Calling Bitcoin Element 0 is an elaboration on this theme.
Following the discovery of a new element, is a stabilization period. Scientists must discover a stable isotope (version, configuration) of the element before it can be used in practical industrial applications. Otherwise, the element may be too volatile, and will collapse.
I’m obviously taking liberties with my analogy here, but the point I am making is that bitcoin is 13 years old and it will be some time before large scale use of the new element is integrated into industrial applications.
It was 1789 when Uranium was discovered. But it wasn’t until 89 years later that Marie Currie discovered and named the phenomenon of radioactivity. Radioactivity had always been a property of Uranium, but it was only observed and scientifically validated many years after its initial discovery.
47 years after radioactivity was discovered, we figured out how to build a bomb with Uranium. Later on we figured out how to use Uranium as an abundant and relatively clean source of power (energy). It is the seemingly small discoveries that lead to the most profound of inventions.
We first needed to understand gravity (Newton — 1687) before building airplanes (1903). We first needed to discover Uranium and radioactivity before unlocking abundant energy. We’re still in the process of discovering the full potential of Bitcoin, so who knows what secrets are yet to be unlocked.
Give Me your Thoughts!!
As always, thank you for reading. In some sense this article is a ridiculous idea. In another sense, I seriously believe the notion that we’ve stumbled upon a truly earth shattering innovation.
One of my all-time favourite pieces of writing is The Number Zero and Bitcoin by Robert Breedlove. It further highlights and connects the gravity of bitcoin as a contribution to human progress. I think it compliments this idea that Bitcoin is element 0, so please give it a read (or listen).
Regards,
Keegan
Substack Referral Program
If you like what you’re reading, and want to share it with others, I’m not offering you an incentive to do so. I’m using a service called subloops to manage a referral program for my readers. If you get 10 people to sign up for my newsletter, I’ll give you $10 worth of bitcoin. I’ll be building out other prizes in the future as well (such as free subscription to my premium letter for a year).