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Commodities vs. Assets-- BitCoin as computational commodity

The extraordinary vision to commoditize today's cloud assets (AWS, iCloud, Firebase, etc...).

by John Pitts

Dedicated to:  Malcolm McLean & Dr. Craig S. Wright-- whose visions for faster, cheaper, more secure, worldwide shipping containers improved every civilization on earth-- TWICE during the author's lifetime!

Malcolm McClean made shipping lean like McDonald's standardized their hamburger worldwide, and like Croesus standardized the amount of gold and silver in his Lydian coins.

What are commodities?

Oil is an asset; a barrel of oil is a commodity. A silver spoon, a silver ore nugget, and the Queen’s silver crown are silver assets; the Roman denarius, the Spanish “pieces of 8” coins, and the American silver dollar are commodities. When you slaughter a cow on your yard to slice up and have your family eat it for sustenance, that’s an asset. When the USDA grades a huge slab of beef “Prime” in a Chicago meat-packing plant, it’s using a fat-marbling PROTOCOL to create a commodity. Commodities are supposed to be interchangeable for a reason: efficiency.

The fat marbling in steak lends extra flavor and juiciness, and is desired to a certain degree.  But extra fat means higher feed cost for the rancher, so meat-lovers pay extra for the higher grades like "prime" rib.  The grades of meat are a standardized protocol-- a way of commoditizing meat which lended great efficiencies to businesses in cities like Chicago and New York ("Meat-packing District")

What are some of the most important ways to measure commoditization efficiency?  Cost, Speed, Security & Universality

Cost: How cheap can we send value? What’s more attractive: a $20 fiat Wire Transfer, or $0.0002 BitCoin transaction fee? Here’s a simple question: If a monetary transaction costs a lot of money, and the main expense of computers is electrical energy, can that transaction network possibly be energy efficient? 🤔

Speed: How fast can we move an asset? In food shipping this is obvious, as items like seafood taste better the less amount of time they spend in transit to the market.  The same can be true in digital "shipping".  Did the Fortnite Tournament prize money go to the best player, or was the match decided by the difference in network latency for the Florida player versus the Vietnamese player whose avatar didn’t get his winning shot off even though he clearly pressed the trigger before his opponent? A transaction can have a large negative value, in something like eSports, if it cost a player a $1 million prize because it was too slow.

Computer networks function best when there's as few "hops" from one entity to another.  BitCoin is purposefully designed to incentivize large centralized data-centers which can transmit large blocks of transactions across the world quickly.  Large Nodes will eventually spend extra money on dark fiber direct connections to friendly Node competitors in order to get blocks approved quicker-- which is an advantage in BitCoin.

Security: How much waste and/or pilfering can be eliminated? If a central authority can decide that an investment product was hacked, but its solution is worse than doing nothing at all — wouldn’t it be better to have a system which can democratically make fast decisions based upon a pre-agreed protocol? Barrels carrying oil should not break easily, should not be easily stolen/siphoned, and should be easy to verify as carrying oil and not heroin by measuring a uniform weight without opening the bunghole. Security in bitcoin means knowing the money you received wasn’t double-spent — like knowing your husband isn’t maintaining a second wife and family on the other side of the river.

J.D. Rockefeller liked commoditizing his petroleum products so well, he named his company "STANDARD OIL".   If that's not embracing commoditization of an asset, nothing is!  J.D. would've inherently understood that something like computing would benefit from standardization of it's large network.

Universality: What percentage of a worldwide system can be made low-cost, high-speed, and with top notch security? If you have to pay $20 to your bank for a wire transfer of $1,000 US dollars to Coinbase, then $50 mining fee plus a $14.90 variable Coinbase fee to convert the $1,000 into btc plus another $50 mining fee to transfer btc to another exchange such as Bittrex plus yet another $50 mining fee to trade the btc for an digital good which is less “fee-happy”, then even small costs tend to build up over time. Likewise, if you’re using BitCoin and it is accepted by only 1% of the world’s businesses, you’re going to spend a lot of wasted fees and time on-ramping and off-ramping to fiat. Did you ever have the wrong currency in your pocket at a Swiss train station when you needed to use the wash-closet?  Universal acceptance matters!

A McLean truck BEFORE the age of containerization.  Largest trucking company in the Southern US at the time. [1]

In a previous article ( [0] ‘What is BitCoin?’ Zen Yotta Mund Data) the commoditization of island-city LAND was proposed as an excellent comparative to BitCoin due to it’s limited amount. Here we briefly point to another fruitful comparative — the shipping container. In ‘What is Money?’ ( [4] “the Wampum article”) bitcoin is compared to the commoditization of sea shells, oil, and electricity; whereas, shipping containers provide an example of the commoditization of a haphazard asset market — shipping — to emphasize the COMMODITY nature of BitCoin.

Not just ANY protocol will lead to massive amounts of efficiencies, including energy costs, but a well-planned commodity protocol will last generations and have many many things built on top of it. Containerization of shipping helps us see, via historical precedent, what the commoditization of (cloud) computing can truly accomplish!

Cloud computing is ALREADY trying to commoditize and is even borrowing the word "containers" to describe it.  But BitCoin commoditizes computing BETTER by tying data to payments.  It's how the internet should've always been.

A BitCoin is a standardized container, but for goods which are invisible —> information

In 1956 the first standard shipping container ship, named “Ideal X”, began it’s journey from Port of Newark NJ to port of Houston, Texas carrying about 60 aluminum uniform-sized shipping containers, fulfilling the shipping efficiency dreams of Malcolm McLean. He was the owner of a trucking company who was disappointed with all the wasted time spent moving goods from ship to truck at the wharf. He built shipping containers which could be stacked securely with each other, and were safe from piracy and pilfering. His vision also foresaw the need for intermodal innovations and therefore helped the Southern Pacific Railway to make rail cars which could take a double-stack of containers. Many others extended his vision, and decades later architects would design housing and even shopping centers from containers, and moving companies would create mini-containers which fit nicely into standard shipping containers — a sub-protocol.

Containers, which fit nicely together by design (kinda like 2x4 Legos), can be used for so many things unrelated to shipping!  Seen here, used in a high rise building.

How could he possibly look so far into the future, to see that his commoditization of shipping protocol would reduce longshoreman by 66% in just the first 16 years? Did he know that his “fitting” system for lifting, stacking and stabilizing containers would reduce loading prices by more than 99% over the last 64 years? These questions are similar to asking whether BitCoin (SV) will conserve energy and thus produce savings versus the Visa network and Amazon Web Services.  

McClean could have never imagined this specific "shipping utopia" in Shanghai, but he  could have forseen and predicted the huge time, cost and energy savings containerization would provide.  He was a shipper himself-- heavily invested in making a better system so he didn't have to pay truck drivers to sit around waiting for stevedores to get the goods out of the ship's hold and onto his trucks.  Truck driver pulls up, a crane latches a container onto it's back, and away the truck goes!

McLean didn’t have the numbers to give anyone as proof in 1956. He relied on fellow visionaries to see what he saw and imagine the savings; likewise, Satoshi Nakamoto didn’t provide the energy answer for BitCoin in his white paper either. However, EFFICIENCY IS WHAT COMMODITIZATION DOES for an asset! ( see [2] for the link to a raw unedited vision-based proto-article on BSV's future energy usage )

No other digital coin other than BitCoin Satoshi Vision (#BSV) creates a STANDARD format for transactions which can change how we do worldwide computing, and all its Nodes MUST enforce that standard. Why? To save time and make money. This is how we increase the efficiency of our worldwide internet by an order of magnitude vs today's cloud assets such as Amazon Web Services, Apple iCloud and Google Firebase-- just like how McLean "do" in 1956 [3].

Leaving you with a McLean truck with not one but TWO standard containers hitched.  If the trailer was hauling Zero-Container-Outputs, then what the hell would that be?  Not a BitCoin this author would get behind, that's for sure! (save that thought for a future article)

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HandCash: $JOHNPITTS

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REFERENCES:

[0] "What is BitCoin? Zen Yotta Mund Data"-- by John Pitts

https://powpress.org/p/jackpitts@moneybutton.com/10

[1] "Malcolm McLean: He changed your world"

https://movingnorthcarolina.net/malcolm-mclean/

[2] "BitCoin's tail wags the green dog"-- by John Pitts

https://equitydiamonds.medium.com/bitcoin-will-massively-reduce-the-computational-grids-electric-power-consumption-b88b0f52d33a

[3] "how McLean do" = Haitain-American slang from "StartUp" (a Netflix series)

How Ronald Dacey of GENcoin do... 🤣

A factually-weak but highly entertaining TV show which is a cross between "Breaking Bad", "Miami Vice", "Silicon Valley", and "New Jack City".

[4] "What is Money?  How smart coders can miss BitCoin"-- by John Pitts

https://sym.re/6XmpAhu

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Good article, Thanks.