The problem with fiat currencies as a unit of account is that it is powered by faith and manipulation, rather than being an actual reflection of value generation.
If you've followed some of my recent writings, you'd have come across instances where I talk about how units of measurements are so different from so-called units of accounts on the note that the former is quantifiable and the latter is not, given that it is based on faith and belief.
This is essentially what makes economies of the world centralized and moving by a predetermined pattern. So we cannot fix the system on the fiat level, we simply must create a new system and that is “crypto”.
There's a quote that says “We cannot solve our problem with the same thinking we used when we created them”.
Can't tell who said it.
That said, this quote supports a lot of things that we've been discussing lately. Things like “layer 2 blockchains”, which are supposedly built to scale the layer 1 but the ultimate setback here is that this layer 2 is built directly on top of layer 1 which really just subjects it to the same problems the layer 1 has been facing.
By thinking the same way, we created more of the same problems.
Why am I talking about this? I'm simply trying to point out that if we lean on the fiat system as our unit of account with crypto, we fail at establishing actual freedom.
Bitcoin Mining As An Economic Force
I've once talked about a futures contract based on bitcoin mining difficulty or something related, but since I lacked the knowledge at the time to go into details, it was merely a thought thrown out there.
That said, it was essentially a way of leveraging chain activities as a basis for some finance gamification and the reason I'm talking about it now is because it is still on that note “leveraging chain activities” that we could build the world's new unit of account.
For a second there, I thought about some recent conversations with brianoflondon on the lightning network becoming a KYC’d network and I've seen reasons to believe it. Should write a different post on some of my speculations there.
Going back to Bitcoin, proof of work may just become the world's savior, in that it would serve as a determinant for Bitcoin's value within the economic system as a unit of account.
This post is a result of recent news on Bitcoin being adopted as a unit of account in Próspera, Honduras.
Less than two years after adopting Bitcoin as legal tender, Próspera, a special economic zone in Roatan, Honduras, has officially recognized Bitcoin as a unit of account — meaning it can now be used to measure the market value of goods and services.
The development was sprearheaded by Jorge Colindres, the acting manager and tax commissioner of Próspera ZEDE (Zone for Employment and Economic Development) on Jan. 5.
In a Jan. 7 post on X (formerly Twitter), Colindres said the motive was to offer more financial freedom to individuals and businesses operating in the area.
Of course, this article said nothing about joule or any unit of measurements, it was simply focused on “bitcoin” which at this point I'd called the “output” of work done.
Work done is defined in joules, sometimes Newton meters, essentially the same thing.
Joules is the SI Unit for work done, same with energy(remember we are talking about bitcoin and that mf uses a lot of energy) and the SI unit of power is watt, which is really Joules per second (J/s).
So you see, everything boils down to joules.
I'm no physicist(yet), nor an economist, but if we ought to lean on crypto as the new standard for national currencies, the Joules will be a proper unit of measurement to beat against every economic development in the space.
Based on surface knowledge, miners' unit of measurements within bitcoin is J/TH, which is joules per hash, or terahash(TH).
This, amongst other on-chain metrics could aid the ecosystem build on Bitcoin as an effective unit of account void of centralization and definitely not self inflating.
The application of this, is definitely a whole different story to cover, but the basis is on joules, which is the defined cost(work done) of each bitcoin mined. Remember that economic growth is really a reflection of “work done”, so that makes what is being done with bitcoin, viable for measuring against activities within the ecosystem.