--- title: “Energy Harvesting and Capital” description: “The relationship between physical energy expenditure and the accumulation of wealth.” tags:
- economics
- energy
- capital
Energy Harvesting and Capital
TL;DR
Real wealth is stored energy. Capital is the result of harvesting energy today to increase productivity tomorrow.
The Concept
In the physical world, work requires energy. When Crusoe catches fish, he is “harvesting” energy from the environment. When he saves that fish, he is storing that energy for later.
Capital Accumulation
Capital is anything that increases the efficiency of energy harvesting.
- A fishing rod is capital because it allows Crusoe to harvest more fish (energy) with less effort.
- A net is even higher-order capital.
Why This Matters for Bitcoin
Bitcoin’s Proof of Work (PoW) is a mechanism for anchoring digital value in the real world’s energy expenditure. By requiring energy to create Bitcoin, the network ensures that the digital ledger reflects a “work” that cannot be forged. It turns electricity into a digital form of stored energy (Capital).