Tuur Demesteer compares today's Bitcoin mining (in a setting with geographically variable cost of energy) to an energy transaction platform.I think that this conceptualization can be expressed as a Carnot cycle. This implies that it is the maximally efficient transfer between two joule-cost sources.The beauty of proof-of-work (which is the cheapest way of having a decentralized money) makes available a previously unattainable efficiency in World's energetic production/consumption system.Details of the argumentationLet us consider, for simplicity, a case with two energy production sources with unequal costs. E.g., cheap electricity available at a remote location (implying little demand and hard to transport), and a metropolitan area of expensive cost of production but high demand.Case without Bitcoin mining: Without demand, the power plants in the cheap electricity area get underdeveloped and underexploited (we do not ignore exporting: it is costly, and we consider it already exploited to its maximum profitable). Though not necessarily, these sources of energy are usually greener (e.g., Icelandic geothermal, solar in the desert, hydro in the mountains).With Bitcoin mining: Now the cheap energy area can mine bitcoins instead whenever it pays better. This freshly created wealth is frictionless transported to the expensive area, where it can pay for energy there (or any other goods based on it).If we consider the joule-cost as a temperature analogue, this is a Carnot cycle.The expensive-place -> cheap-place line in the phase diagram is always adiabatic (conserves entropy) as it relates to a transfer of value.Without Bitcoin, the cheap-place -> expensive-place cannot be adiabatic, as there is a cost to either transport the energy or serve a smaller demand. With Bitcoin: The cheap place can mine bitcoins and siphon their value at no cost to the expensive place, i.e., adiabatically.What are your thoughts on this? via /r/Bitcoin http://bit.ly/29izf68
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