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Governmental policies in money and energy underpin most of today\u2019s food shortages<\/a> and soaring prices<\/a> across consumer goods and services, at least according to bitcoin mining company Cathedra Bitcoin.<\/p>\n While the Bank for International Settlements (BIS), the central banks\u2019 central banker, blames<\/a> 40-year-high U.S. inflation levels on pandemic-induced supply chain bottlenecks, Cathedra has laid out an alternative view in its latest annual letter to shareholders<\/a>.<\/p>\n \u201cWe believe the root causes of these issues are quite simple: unsound money and unsound energy infrastructure,\u201d the letter reads.<\/p>\n Cathedra argues that much of the current mainstream line of thought<\/a> is influenced by a Malthusian<\/a> approach, which purports that progress is \u201czero sum\u201d and resources are finite, thereby leading experts and governments to tilt favorably for policies that judge human action by whether it disturbs the natural world.<\/p>\n However, the bitcoin miner subscribes to Prometheanism<\/a> \u2014 the belief that progress is \u201cpositive sum\u201d and human creativity and technology allow resources to be employed in novel ways that preserve the natural world while benefiting the human species. Prometheans evaluate human action by its ability to trigger human flourishing, a line of thought that guides all of Cathedra\u2019s business decisions.<\/p>\n Energy abundance is necessary<\/a>. While different energy sources bring different benefits and tradeoffs to the table, a cohesive plan to enable maximum energy throughput is a necessity for any nation to thrive. Short-sighted policies that subsidize intermittent renewables and shutter stable forms of generation lead to energy insecurity and higher energy costs, Cathedra outlines in its letter.<\/p>\n \u201cThis is the underlying logic of these \u2018net-zero\u2019 policies: make energy more expensive so that we use less of it,\u201d per the letter. \u201cIn fact, economists advising the European Central Bank view rising energy costs (\u2018greenflation\u2019) as a feature, not a bug \u2014 a necessary consequence of the energy transition.\u201d<\/p>\n While every human being needs energy to survive, rising energy costs asymmetrically favor those who thrive in society while punishing people with low incomes who spend much of their paychecks on basic necessities. The higher the energy price, the higher the price for every product and service and the higher the toll on economic growth<\/a>.<\/p>\n \u201cRising energy prices are a regressive tax on the least well-off in society,\u201d Cathedra\u2019s letter reads. \u201cEnergy is the key input for every other good and service in the economy, and over time accounts for all wealth in an economy. To the extent energy gets more expensive, so does everything else (including and especially food), making society poorer.\u201d<\/p>\n \u201cThis is the Malthusian approach to energy,\u201d it adds. \u201cExpensive \u2018green\u2019 energy that the elites can afford, while the unwashed masses bear the brunt of those rising costs.\u201d<\/p>\n The U.S. has spiraled into a deep push for renewable energy sources under the Biden administration. However, instead of allowing electric grid adjustments in the short-to-medium term by maintaining \u201cold\u201d power generation plants, President Biden\u2019s administration has opted for a complete overhaul.<\/p>\n Biden canceled the Keystone XL pipeline<\/a> on his first day in office over concerns that burning oil and crude could make climate change worse and harder to reverse. The pipeline would have channeled 830,000 barrels of oil per day from Canada to refineries on the U.S. Gulf Coast, and the move led to rising tensions between U.S. and Canada<\/a>. Biden\u2019s worries about climate change have also led him into a legal battle to pause new oil and gas leases<\/a>.<\/p>\n Similar U.S. efforts have occurred at the state level. Over the past two years, New York has banned fracking<\/a> and closed a nuclear power plant that supplied a quarter of the state\u2019s energy needs as it eyes hydropower. However, that maneuver is also meeting resistance as environmentalists argue<\/a> hydropower\u2019s inevitable flooding of some areas would lead to carbon emissions. Progress on other renewable energy sources, like solar, also have<\/a> been<\/a> hindered<\/a>.<\/p>\n \u201cThe result is more unreliable energy and less baseload generation, which ultimately raises the cost of energy across the board,\u201d Cathedra CEO A.J. Scalia told Bitcoin Magazine<\/em>, referring to governmental subsidies for renewable energy.<\/p>\n \u201cIn the absence of these government incentives, capital and entrepreneurs would pursue ventures that satisfy genuine consumer preferences,\u201d he added. \u201cRenewables would be forced to compete with other forms of generation on their own merits, and renewable energy entrepreneurs would have to develop long-term, profitable, sustainable business models that don\u2019t rely on the largesse of government.\u201d<\/p>\n Nearly all energy sources will present environmental challenges in one way or the other. Cathedra advocates for \u201clow-entropy\u201d options, which it says are needed to maintain order and advance the development of civilization.<\/p>\n \u201cThe story of civilizational progress is one of humanity improving its ability to harness highly ordered sources of energy and therefore our capacity for shedding entropy,\u201d Scalia said. \u201cA half century of government subsidies and declining interest rates has steered capital towards high-entropy renewables, jeopardizing our ability to preserve order in the future, thereby bringing us closer toward thermodynamic equilibrium (read: civilizational collapse).\u201d<\/p>\n \u201cWith its immutable monetary policy, Bitcoin preserves the information contained in prices and will allow humanity to flourish through more efficient, decentralized allocation of resources, improving our ability to resist the influence of entropy in the physical world,\u201d he added.<\/p>\n The current global fiat monetary standard, based on bilateral agreements between the U.S. and oil-producing countries in the \u201cpetrodollar\u201d system<\/a>, backs the U.S. dollar as the world reserve currency through energy and debt. However, central bank monetary policies of recent have started to crack this foundation, Cathedra said.<\/p>\n \u201cA half-century of irresponsible fiscal and monetary policy has pushed sovereign and private sector debt to the brink of unsustainability and fragilized financial markets,\u201d per the company\u2019s letter. \u201cThe once steady foreign demand for treasuries is evaporating, forcing the Fed to begin monetizing U.S. deficits at an increasing rate. The U.S.\u2019s share of global GDP is waning, and the role of the dollar in key trading relationships is diminishing. Even the once-mighty U.S. military \u2014 on whose supremacy the entire petrodollar system was predicated \u2014 shows signs of degeneration.\u201d<\/p>\n To this bitcoin miner, Bitcoin is the answer to fix record-low interest rates, supply chain disruptions and asset price and consumer price inflation.<\/p>\n \u201cWe believe the next global monetary system will be built atop Bitcoin \u2014 with bitcoin the asset and Bitcoin the network working together to offer final settlement in a digitally native, fixed-supply reserve currency on politically neutral rails,\u201d the Cathedra letter reads. \u201cBitcoin uniquely enables this value proposition, and game theory and economic incentives will compel nation-states to take notice amid the collapsing monetary order.\u201d<\/p>\n The company notes that competition to Bitcoin may emerge, promising even more control, which would appeal to Malthusian leaders. However, Cathedra remains \u201ccautiously optimistic\u201d that the U.S. will favor Bitcoin over dystopian technologies like a central bank digital currency (CBDC). However, the U.S. government doesn\u2019t seem to be leaning that way.<\/p>\n Biden signed an executive order<\/a> (E.O.) on Wednesday tapping \u201curgent\u201d development of a Federal Reserve CBDC<\/a>. The E.O. outlines federal efforts to research and develop specific guidelines for the use of bitcoin, alternative cryptocurrencies and a possible digital dollar as the country seeks to remain at the core of the global financial system.<\/p>\n \u201cThe U.S. is ceding control of the unipolar, dollar-based monetary system; 50 years of irresponsible fiscal and monetary policy has made this a certainty,\u201d Cathedra President and COO, Drew Armstrong, told Bitcoin Magazine<\/em>. \u201cThe only choice we have at this point is how to respond. If America wants to extend its economic leadership in a post-Bretton Woods III monetary order, the path of least resistance would be to lean into its dominant position in the Bitcoin industry.\u201d<\/p>\n \u201cOur macro views on energy and money inform everything we\u2019re doing at Cathedra,\u201d the letter reads. \u201cChief among them is the belief that sound money and cheap, abundant, highly ordered energy are the fundamental ingredients to human flourishing. Our company mission is to bring both to humanity, and so lead mankind into a new Renaissance \u2014 one led by Bitcoin and the energy revolution we believe it will galvanize.\u201d<\/p>\n The bitcoin miner rebranded<\/a> from Fortress Technologies to Cathedra Bitcoin in December to reflect its aspirations in building a \u201cbold, ambitious, long-term\u201d project \u2014 in the spirit of history\u2019s gothic cathedrals \u2014 with energy and Bitcoin, not \u201ccrypto,\u201d at its core.<\/p>\n \u201cOur long-term plan is to vertically integrate to own everything from the energy resource, to the mining data center, to the mining machines hashing inside the data center,\u201d Scalia said. \u201cOnce Cathedra is a scaled, low-cost producer of bitcoin and energy, we\u2019ll also be uniquely positioned to deliver a suite of ancillary products and services across the financial and energy sectors as well.\u201d<\/p>\n Another aspect of Cathedra\u2019s long-term play involves off-grid mining, which the company believes will trump the current popular practice of on-grid mining. To help achieve this vision, the miner has begun producing proprietary modular data centers made to function even under harsh environmental conditions, called \u201cRovers,\u201d to house over 5,000 bitcoin mining machines that Cathedra expects to receive this year.<\/p>\n Armstrong told Bitcoin Magazine<\/em> that the advantages of off-grid mining relate mostly to the cheap energy costs. The chief executive highlighted how, by leveraging energy that would otherwise go to waste, the miner wouldn\u2019t compete with other customers as in on-grid mining.<\/p>\n \u201cFirst, by mining off grid, we\u2019re necessarily pursuing sources of energy that are non-rival,\u201d Armstrong said. \u201cBecause there\u2019s no other demand for the energy, we\u2019re able to buy it for cheaper than we otherwise would \u2014 and in some cases, can even get paid to consume it.\u201d<\/p>\n Mining off-grid also enables Cathedra to cut down many costs associated with power transportation, transmission, and distribution.<\/p>\n \u201cFinally, by vertically integrating to design, manufacture, and operate our Rovers, we\u2019re able to remove additional layers of margin and realize savings on the capex side as well,\u201d Armstrong added. \u201cAs we achieve scale, we\u2019ll benefit from volume discounts on materials, greater bargaining power with suppliers, etc., driving down our cost to produce each Rover.\u201d<\/p>\n Cathedra also is dedicated to accumulating bitcoin on its balance sheet. The company said in its letter that it leverages financing opportunities to keep as much of the bitcoin it mines as possible, a long-term vision that it says will produce outsized results as companies with big BTC holdings get a head start in an eventual Bitcoin standard.<\/p>\nUnsound Energy<\/h2>\n
Unsound Money<\/h2>\n
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A Bitcoin Mining Company Focused On Hyperbitcoinization<\/h2>\n
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