Energy Taxation in a Bitcoin-Based Economy In the coming decades, economic systems may evolve from taxing labor and trade to taxing energy — the universal input of all production. By coupling this system with Bitcoin as the unit of account, society creates a monetary framework rooted in physics: every joule of energy consumed or produced expresses itself through a scarce, trustless asset with immutable energy cost. The result is a transparent and self-regulating fiscal structure that ties spending, taxation, and wealth directly to energy efficiency and sustainability. Bitcoin as the Energy Standard Bitcoin’s proof-of-work mechanism already prices security and issuance in energy terms. Each coin represents an irreversible expenditure of energy converted into digital scarcity. Using Bitcoin as the unit of account extends this logic to the entire economy: • Prices reflect energy intensity: electricity, food, transport, and housing all carry visible energy costs denominated in Bitcoin (₿). • Energy taxes become predictable: every kilowatt-hour consumed can be priced in satoshis — the smallest Bitcoin unit — adjusted dynamically to grid demand and environmental policy. • Monetary supply integrity is inherent: since Bitcoin cannot be created arbitrarily, the government cannot inflate the currency to fund deficits; all spending must correlate to real productive or taxed energy usage. This coupling makes the economy thermodynamically honest: energy in, value out. Function of the Energy Tax In a Bitcoin-based energy tax system, taxation occurs automatically at the point of consumption. Smart meters embedded in grids, vehicles, and home systems record energy flow and remit micro-payments in Bitcoin to the treasury: 1. Individual energy use — taxed proportionally through grid-integrated contracts. 2. Corporate activity — taxed at industrial nodes, with rates tied to operational intensity. 3. Cryptomining and data centers — treated as taxable energy sectors themselves, closing the loop between Bitcoin issuance and state revenue. These revenues replace income and sales taxes entirely, eliminating distortions in labor and trade while ensuring that environmental costs are baked into market prices. UBI and Fiscal Balancing Universal Basic Income becomes the redistributive mechanism in this system. Each household, defined by its baseline energy requirement (for instance, a family of four), receives a periodic Bitcoin disbursement indexed to the nation’s median energy consumption per capita. • High-efficiency households benefit by saving unused energy-denominated income. • Heavy consumers effectively pay more back into the system through energy use and taxation. • The government’s budget naturally balances — revenue arises from total energy use, and spending adjusts to aggregate consumption trends. This closes the fiscal loop: collective energy use funds collective living standards. Economic and Ecological Implications 1. Energy efficiency as primary economic driver. Innovation targets lower joule-to-output ratios. Profitability grows from energy optimization rather than financial engineering. 2. Stable, non-inflationary unit of account. Bitcoin supply remains fixed, meaning the “price” of energy in Bitcoin reflects true technological and resource changes — not monetary dilution. 3. Cross-border harmonization. Because Bitcoin is global, energy taxation in Bitcoin enables transparent comparison across nations, encouraging fair trade and discouraging environmental arbitrage. However, challenges remain: • Volatility management: transitional mechanisms (like energy-backed stablecoins) may be required until Bitcoin volatility dampens through global adoption. • Energy measurement integrity: standardizing joule equivalence across grid mixes (solar, nuclear, hydro) requires global coordination. • Access equality: Bitcoin wallets and grid-linked infrastructure must be universally available to avoid financial exclusion. Conclusion: A Thermodynamic Political Economy When Bitcoin becomes both money and meter, taxation aligns with the physical reality of production. Citizens pay not for income, but for the energy they consume; governments earn not by printing, but by collecting fractions of the power that drives civilization. Value once abstracted through fiat finance returns to its energetic core — measurable, scarce, and self-stabilizing. This fusion of Bitcoin accounting and energy-based taxation could mark a shift from fiscal illusion to thermodynamic fairness, anchoring monetary integrity and environmental stewardship in a single, decentralized economic protocol

Energy as the Basis of Taxation: Promise and Pitfalls In a near-future world driven by automation, artificial intelligence, and renewable technology, governments may search for fair and sustainable sources of revenue. One radical proposal is to tax energy consumption directly, shifting from traditional income or sales taxes to an energy-based tax system. Under such a framework, every unit of energy consumed—whether by households, businesses, or industries—would contribute to public revenue, while Universal Basic Income (UBI) could be allocated proportionally to a family’s expected energy needs. Such a model could transform economic behavior, incentivize efficiency, and redefine fairness in a digitized world. Potential Benefits 1. Environmental sustainability. An energy tax directly links fiscal policy to environmental impact. By making energy use more expensive, individuals and corporations would prioritize efficiency, conservation, and renewable sources. This naturally discourages carbon-intensive energy consumption, helping curb emissions and accelerate the green transition without heavy-handed regulation. 2. Simplified and transparent taxation. Unlike income taxes, which require complex documentation, auditing, and compliance frameworks, an energy tax is relatively straightforward. Advanced smart meter systems can measure and report energy usage automatically. This reduces bureaucratic overhead and tax evasion, aligning consumption with accountability. 3. Fairness and proportionality. Taxing energy aligns cost with actual resource use. Wealthier households and corporations that consume more would pay more, while low-energy users—often lower-income groups—would pay less. Linking UBI to a baseline family energy requirement could ensure every household can afford basic energy needs while preserving incentives to conserve. 4. Economic realignment. As automation reduces labor’s role in the economy, taxing energy rather than income recognizes a new economic reality. Energy, not human effort, increasingly drives productivity. An energy-based tax system reflects this shift, ensuring that machines, AI systems, and industrial processes contribute their fair share to the social infrastructure that sustains them. Potential Costs and Challenges 1. Regressive impacts and social equity. While conceptually fair, an energy tax could disproportionately hurt low-income households if not carefully structured. Energy use often rises with climate (heating and cooling), housing quality, or regional availability of renewables. Without equitable subsidy mechanisms or progressive brackets, some families could face energy poverty. 2. Implementation complexity. Tracking and taxing every form of energy consumption—including distributed solar, battery storage, and off-grid systems—requires sophisticated infrastructure. Calibration errors, data privacy concerns, and cybersecurity risks could undermine trust and fairness in the system. 3. Economic disruptions. Industries reliant on cheap energy, such as manufacturing or data centers, may shift operations abroad to avoid taxes, reducing domestic employment. A sudden introduction of energy taxation could also drive inflation as businesses pass costs onto consumers. 4. Measurement and standardization problems. Different energy sources—gasoline, electricity, hydrogen—have distinct efficiencies and carbon footprints. Converting all into a uniform taxable energy metric would be technically demanding and politically disputed, particularly across borders. Balancing Efficiency, Equity, and Sustainability. To reconcile these issues, a gradual transition could help. Governments might phase in energy taxes while reducing income taxes, ensuring the overall burden remains stable. Real-time rebates or UBI adjustments could protect vulnerable groups and maintain purchasing power. International coordination would also be crucial to prevent economic flight and maintain competitiveness. Ultimately, an energy-based tax system offers a compelling vision of fiscal and environmental harmony: a world where humanity pays not for earning, but for consuming, and where efficient use of energy becomes both a moral and economic virtue. Yet its success depends on technological readiness, equitable policy design, and collective willingness to rethink the very foundation of taxation in the energy age.

It sure feels that the “sound money” investor is a very small group.

Is what has been happening with bitcoin, sideways action, what 1 bitcoin = 1 bitcoin feels like?

Bitcoin’s recent decoupling from both stocks and gold does not mark the end of its story; it marks a transition from a speculative “beta trade” into a monetary thesis in its own right. The very fact that it no longer obediently rises whenever tech stocks or precious metals rally is precisely what strengthens the case that, when the old pillars of portfolios begin to crack together, Bitcoin will emerge as the alternative vault for global savings. In this light, Peter Schiff’s latest proclamation that “the Bitcoin trade is over” is less a diagnosis of terminal decline than an illustration of how hard it is for incumbents of the old order to recognize the birth of a new monetary regime. Schiff’s critique rests on a simple pattern: if Bitcoin does not rally with tech stocks and does not rally with gold and silver, then it must be finished. Implicit in this logic is the assumption that Bitcoin’s legitimacy depends on tracking the performance of legacy assets, as if its only purpose were to be a leveraged sidecar to what already exists. But that is a misunderstanding of what a base money contender actually is. A new monetary asset does not prove itself by moving in lockstep with the assets it is ultimately meant to replace; it proves itself by surviving when those assets fail to provide the security they promised. In that sense, decoupling is not a bug but a prerequisite. For more than a decade, markets largely treated Bitcoin as a kind of hyper‑volatile tech stock with a mythology attached. It rode the same liquidity waves as growth equities, sold off when macro tightened, and often behaved like a high‑beta play on the broader risk cycle. At the same time, Bitcoin repeatedly flirted with a “digital gold” narrative, drawing comparisons to gold’s scarcity and independence from corporate cash flows, yet its price often failed to mirror gold’s defensive strength during acute periods of fear. This dual identity—part tech, part gold—kept it trapped conceptually: too wild to be a hedge, too monetary to be just another startup. The current break from both stocks and gold is the market’s way of resolving that contradiction. To see why this matters, consider how investors normally feel “hedged” within the existing system. When tech stocks soar, portfolios look healthy and risk feels rewarded. When fear rises and growth fades, gold tends to step in as the venerable, centuries‑old refuge, a metal whose reputation as a store of value is backed by tradition and war stories. As long as one of these two pillars appears to be doing its job, there is little urgency to reach for a new, politically neutral base money. The comfort of diversification—stocks for upside, gold for downside—keeps capital anchored inside the same underlying framework: claims denominated in, or settled through, the dominant fiat currency. However, that comfort is only as solid as the system beneath it. Stocks are ultimately claims on future cash flows in a currency that is constantly being diluted. Gold, outside of physical holders, is often mediated by layers of paper claims, exchange‑traded products, futures, and rehypothecated collateral that may not all be honored under extreme stress. A scenario in which both stocks and gold “work” less and less at the same time is not difficult to imagine: corporate earnings weakened by stagnation or recession, equity multiples pressured by higher risk premia, and gold constrained by policy measures, taxation, or the discovery that paper gold vastly exceeds readily deliverable physical metal. In such an environment, both sides of the traditional barbell begin to look like different flavors of the same risk: dependence on the state‑bank nexus and its credibility. This is where Bitcoin’s apparent failure to behave “correctly” in normal times becomes a strength in abnormal times. If Bitcoin were perfectly locked to tech, it would be nothing more than a speculative derivative on innovation and liquidity cycles. If it were perfectly locked to gold, it would add little that tokenized gold, gold miners, or traditional bullion do not already provide. By breaking from both, Bitcoin signals that it is being repriced as something else: a neutral, non‑sovereign, bearer asset whose long‑term value depends not on quarterly earnings or industrial jewelry demand, but on its role as a parallel monetary system. This transition is rarely smooth. Markets must experiment, discover correlations are unreliable, and eventually learn to price Bitcoin not as a satellite to other assets but as a separate gravitational center. Underneath all of this sits the architecture of the fiat world, with the U.S. dollar at its core. Over the past century, the dollar’s purchasing power has eroded, not by accident but by design. Money creation in the modern system is not neutral; it follows the contours of political power and financial proximity. Those closest to the source of new money—governments, large banks, major corporations—receive it first, while prices have not yet fully adjusted. By the time new money filters out to wages and small savers, asset prices and living costs have risen, leaving those at the periphery holding a weaker unit. This dynamic, known as the Cantillon effect, turns the reserve currency into a quiet engine of wealth redistribution. Calling cash (USD) the “king of distrust, delusion, and Cantillon effect” is therefore not mere rhetoric; it is a description of how the system behaves over decades. Savers are taught to trust a unit that steadily declines in value, while believing that nominal stability is the same as real safety. The delusion lies in confusing the ubiquity of the dollar with its fairness, and mistaking its legal status for moral legitimacy. In practice, every crisis is resolved through more issuance, more intervention, and a steeper hierarchy of winners and losers. Those who can borrow closest to zero enjoy asset inflation; those forced to save in cash absorb the loss. The “king” rules not by preserving wealth impartially, but by quietly taxing the future through dilution. Bitcoin’s core challenge to this order is simple and radical: it removes the throne. There is no issuer whose balance sheet expands and contracts at will, no committee that adjusts supply in response to short‑term political pressure. Its monetary schedule is transparent and inelastic, and its settlement is final without reliance on any particular government or bank. To those embedded in the fiat‑Cantillon world, this looks like a speculative toy whose price swings prove its unseriousness. To those who study monetary history, the volatility looks more like the birth pangs of a new unit of account, as free markets struggle to price an asset that does not bend to the usual levers of policy and credit. From this perspective, Schiff’s statement that “if Bitcoin won’t go up with tech, and won’t go up with gold, it won’t go up at all” reveals an attachment to an old paradigm. He imagines a world where Bitcoin’s only valid role is to hitch a ride on existing winners—where its failure to do so means its narrative has died. But if Bitcoin’s true purpose is to offer an escape from both the equity complex and the gold‑plus‑fiat complex, then the time when neither of those complexes inspires confidence is exactly when Bitcoin’s monetary function will be tested in earnest. In other words, the phase when Bitcoin no longer maps neatly to the performance of other assets is not the epilogue; it is the prologue. The break from stocks and gold, then, increases rather than decreases the probability that, in a future crash regime where both pillars wobble together, Bitcoin will be perceived as the remaining vault not claimed by anyone else’s liabilities. Investors searching for a place to store the residue of their trust will find that cash is explicitly designed to depreciate, that stocks are hostage to earnings and political conditions, and that most gold exposure is mediated through the same institutions that oversee the fiat system. Bitcoin, for all its imperfections, is the only large‑scale asset whose existence and scarcity do not depend on faith in those institutions. When the old king of money—USD under Cantillon rule—finally looks too naked to ignore, markets will not be searching for another subject inside the same court; they will be looking for a new kind of sovereignty entirely. Bitcoin’s independence from the price theater Schiff is watching so closely is exactly what qualifies it for that role.