Mining and Proof Of Work

In the end, the artificial creation of the limited number of possible BitCoins via this "proof of work" (doing millions of SHA-256 hashes over and over) is madness. All you really need is to have "proof of limitation" without the politics—was the market restrained from creating too much money too fast? BitCoin’s use of a procedural solution is the wrong track when all you need do is define a constraint via a formula and apply it as needed over time, instead of everyone continuously spinning a hash function and wasting electricity. Keep the transactions public, cryptographically sign them, and audit them with a money model and you’ll be able to keep much of what is good about BitCoin. And of course, use a "commodity" the people can intuitively understand, something like... time.

The computation of mining and hence the electricity, is to strenghten the authentication of Bitcoin. Now let us consider the energy that was required, before the existence of Bitcoin, to authenticate the minting process of currency made in paper and less noble metals. It consists of a secret minting procedure, big machinery, a monumental building with thick walls and armed guards on its perimeter: an unstable kind of energy, very difficult to govern, as it relates to a monopoly on violence imposed by the sovereign state. This very energy is substituted by Bitcoin with a qualitatively different approach: Bitcoin distributes peers to the task of building trust in its authenticity. The networked computation of all miners serves as a mint and dissolves the need for violence into an unlimited, unreachable and decentralized power. Clustering the mint gathers the energy necessary to establish and protect the authenticity of the currency. In other words: participation has substituted violence in the physical implementation of currency authentication: a recognizable pattern when we observe historical manifestations of the digital plane of immanence.