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their cadence since the launch of the Bitcoin network and the introduction of proof-of-work pal consensus numerous arguments have been made and fiercely debated at its core proof of work power is an incentive mechanism designed around the consumption of energy in exchange for a reward from securing a global distributed data ledger so long as securing this ledger the blockchain rewards someone with economic value that is worth more than what they put in the incentive works a wise person once said show me the incentive I’ll show you the outcome this deceivingly simple incentive has birthed new industries e.g crypto mining and has the potential to trigger knock-on effects for global energy systems and markets as proof of work consensus mechanisms mature traditional paradigms advocated in energy systems engineering energy economics and energy financial markets e.g power trading project financing green finance purchase power agreements could fundamentally change this article explores some of the context and significance for these changes split across three sections section 1 understanding the very basics of proof-of-work panel and mining section 2 power and energy systems engineering and energy economics section 3 implications for energy markets understanding the very basics of proof-of-work and mining to set the appropriate context for the rest of the article it is important to understand the very high-level basics of proof-of-work panel and crypto mining the basics of the proof-of-work process is to convert energy something which is globally distributed and available in various formats / quantities into a digital liquid and mobile form of economic value represented in the form of a cryptocurrency / token example Illustrated for the Bitcoin network the phrase proof-of-work refers to the fact that work in the form of energy consumption which has real costs is expended and converted into another form of economic value Bitcoin or other institutions that participate in the proof-of-work process are called miners miners run specialized hardware / equipment to solve a cryptographic puzzle e.g sha 256 in the Bitcoin network those that can configure their mining operation to solve the puzzles and the fastest time while incurring the least amount of costs will have profitable businesses this is not dissimilar to other types of energy in manufacturing eg in the oil and gas industry except that the final economic load being manufactured is digital therefore so long as people ascribe a nonzero value to the tokens being mined e.g bitcoin there is an economic incentive to mine refer to an earlier article on non-sovereign assets for white tokens may have nonzero value miners do not necessarily need to believe in the principles of the block chains they are helping to secure through mining in fact they can be 100% agnostic and mine the block chains that the market deems to be most valuable e.g the mined tokens that the market will pay them the most for in many ways this is the beauty and elegance of proof-of-work this property and incentive could have profound implications for those who study and work in the energy sector all away from exploration and production refining and distribution to energy financial markets and policy power and energy systems engineering and energy economics back in university a majored in chemical engineering in my final year I took a course called energy systems engineering which would proceed to have a major impact on my life the point of the course was to design and analyze energy systems that could technologically supply sufficient energy to meet the round-the-clock demands of customers of a given market while also being economically and financially viable the basics of energy systems engineering matching supply and demand by configuring the optimal energy iMix matching supply and demand in a nutshell the key to understanding the complexity of energy systems rolls around matching the profile of energy supply how much energy can be produced in a given physical location at a given point in time versus the profile of energy demand how much energy does a community need in that same location at a given point in time the energy mates based on what technologies and methods are available reflect a complex optimization exercise in addition to supply and demand other real-world constraints can be overlaid including but not limited to things like environmental factors e.g burning coal releases more co2 versus burning natural gas versus running a wind farm build / decommissioning factors e.g building a nuclear power plant requires building 100-year financial reserves for future teardown life cycle operation factors e.g different types of ongoing servicing / maintenance required for upkeep of different technologies from carbon-based to carbon free one of the main focuses of many energy systems engineering exercises today is to try and maximize the use of renewable carbon free sources political developments like that EWTN’s sustainable development goals / SDGs and the Paris climate agreement have further supported this however the challenge with achieving this often boils down to the inherent economics arising from renewable energy production the challenges most commonly cited are twofold one most renewable energies either are to intermittent and/or to two geographically limiting as a result the economics alone may not always incentivize development depending on where you live in the world to solve this problem a number of solutions have been proposed from government subsidies and purchase power agreements to technology R&D to develop better energy storage each have their own pros and cons the common thread across these solutions is that none can immediately address the issues we face at the scale needed at least not yet further complicating the matter is the high degree of global political coordination required to even take baby steps Ford given the urgency as estimated by some to change our energy system there is a risk in relying on global political consensus to drive progress proof of work is a potential market driven bridge solution a potential bridge mechanism to kick-start the longer-term solutions could be to leverage proof of work based mining mechanisms proof of work presents new potential pathways for the energy sector to monetize energy production and unlock it from its historical physical constraints in particular max Kia Sauron bitcoin cynic Warren Buffett he’s a complete failure appearing for an interview with blocked max Kia sir explosion throwing shade at the crypto community Kia sir did not hold back I think he feels insecure without the bailouts of 2008 without the access to free money from central banks without stock buybacks that were up until recently illegal Warren Buffett’s performance would be close to zero Warren Buffett as trashed Bitcoin in particular and the budding crypto economic sector in general calling Bitcoin rat poison squared just last year CCN reported buffett aiding and abetting crime kia sir also suggested that Buffett’s investments in Wells Fargo amounted to aiding and abetting an enterprise with a history marred with criminal misconduct he’s the largest investor in Wells Fargo when they engage in serial criminality as they have been doing in the last few years he says nothing so he’s aiding and abetting crime he’s a criminal the guy is overrated he’s a complete failure since 2000 Wells Fargo has been forced to pay fourteen point seven billion dollars in penalties for committing a host of violations 2018 stock buybacks nearly double across the S&P 500 u.s. public companies spent a record-setting nine hundred thirty eight billion dollars on buybacks during 2018 according to The Wall Street Journal in 2017 companies port just 519 billion dollars into buying back their own shares companies are buying up their own shares at a bristling pace source Market Watch Goldman Sachs the surge came on the heels of the Republican tax cut bill which is projected to launch the federal debt one point nine trillion dollars higher the next decade thereby implying the taxpayers effectively fronted the cash for companies to repurchase their own stock buffett joins the buyback party in november berkshire hathaway incorporated repurchase nine hundred twenty eight million dollar worth of its shares analysts noted that the oracles move suggested there were very few opportunities for buffett to deploy capital in productive ways quoted by The Wall Street Journal chief investment officer at Wedgewood Partners incorporated in st. Louis said what the buyback signal in a very big way is that Buffett’s shortlist of putting perspective billions to work either in private businesses or equities outside of Apple are nil the nine hundred twenty eight million dollars buy back marked Berkshires first major stock repurchase since 2012 when the firm scooped up about 1.3 billion dollar worth of stock from Berkshire shareholders 2019

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