Bitcoin: according to Jack Mallers

Bitcoin as Money

What is money? That’s one of the hardest questions to answer because it’s different for everyone. But at its core, money is just information. It’s a way for people to keep track of who owes what to whom. That’s it. Money is a tool that lets humans collaborate and build a functioning economy. Without money, we’re stuck bartering, and bartering sucks.

The Problem with Barter

Imagine a small village with just two people. One grows apples. The other grows wheat. The apple grower says, “Hey, I’ll give you ten apples for one bag of wheat.” The wheat grower agrees. Simple. Trade happens. Everyone’s happy.

Now, let’s scale that up. More people move into the village. One guy raises cattle. Another makes boots. The apple grower goes to the wheat grower and tries the same trade, but now the wheat grower says, “No thanks, I don’t need apples. I want a steak.” So the apple grower goes to the cattle farmer. The cattle farmer says, “I’d love some apples, but what I really need are new boots.” Now she’s running around, trying to trade apples for boots, so she can get steak, so she can finally get wheat.

That’s barter. It’s inefficient, time-consuming, and completely unscalable. The coincidence of wants problem means every trade requires finding someone who not only has what you need but also wants what you have. Good luck running an economy like that.

Money Solves Barter

Money is just an upgrade. Instead of trying to swap apples for wheat or steak or boots, the apple grower can trade her apples for money. Then she can hold that money and use it whenever she wants, for whatever she needs. She’s not stuck finding someone who wants apples in the moment. Money fixes the coincidence of wants problem and allows people to specialize in what they do best.

Money makes trade more efficient, simplifies transactions, and allows economies to scale. That’s why money exists. It’s just an agreement among people that some form of information—some unit of account—can be used to measure value, store wealth, and facilitate trade.

What Makes a Good Money?

Not all money is created equal. If you’re going to use something as money, it needs to have certain properties. The better the money, the better the economy that forms around it. A solid form of money should be:

• Durable – It has to last over time. No one wants money that rots or disappears.
• Uniform – Every unit must be identical. If every piece of money is different, it’s a nightmare to trade.
• Portable – You have to be able to carry it and store it easily.
• Divisible – You need to be able to make change. A system where the smallest unit is too big to divide makes trade impossible.
• Hard to create more of – If money is too easy to produce, people will make more of it, and that destroys its value.
• Holds value over time – If your money constantly loses value, you can’t trust it to store your wealth.

Apples Make Bad Money

Let’s go back to the apple grower. Could she just use apples as money? No chance. Apples are terrible money. They rot, they’re not uniform (red apples, green apples, big apples, small apples), they’re not portable in large amounts, and they’re not divisible (try making change for an apple). Worst of all, anyone can grow more apples, so they’re not scarce.

Clearly, we need something better.

Money is Just a Ledger

At the most basic level, money is just a system for recording economic activity. Throughout history, we’ve used two main types of money: physical tokens and ledgers.

1. Tokens – These are objects used to represent value. Gold, silver, seashells, salt—people have used all kinds of things as money. Gold is a great example because it’s scarce, durable, and has been used as money for thousands of years.

2. Ledgers – Instead of trading a physical token, societies have also used lists to track value. These are just records of who owns what. Every central bank, every bank account, every financial institution operates on ledgers. The U.S. dollar? It’s a ledger system. The Federal Reserve keeps track of how many dollars exist and where they go.

Each of these has trade-offs. Gold is great because it doesn’t require trust—if you hold gold, you own it. But it’s hard to transport and divide. On the other hand, a ledger is easy to use and scales well (8 billion people can use the U.S. dollar), but it requires trust in a third party. That’s the problem with fiat money—someone controls the ledger. Someone can add more units to the system whenever they want.

Bitcoin: A New Kind of Money

What makes Bitcoin special is that it takes the best parts of both systems. It’s a digital ledger that doesn’t require trust. It’s scarce like gold, but portable like a digital system.

When Satoshi created Bitcoin, the key realization was this: in a digital world, money has to be a ledger. You can’t move physical gold on the internet. You need a record of who owns what. But if that ledger is going to work without trust, it has to be immutable, decentralized, and outside anyone’s control.

That’s what Bitcoin is. It’s the first money in history that is both trustless and digital. It’s a ledger that no one can alter, a scarce money that no one can print more of, and a form of value that can be sent instantly anywhere in the world without needing permission.

For the first time, we have money that is truly native to the internet—not controlled by governments, not dependent on banks, and not limited by borders. And it all comes down to one thing: Bitcoin is information.

The Role of Time in Bitcoin

Why Time Matters in Money

Satoshi Nakamoto’s whitepaper references time extensively. That’s not a coincidence. Bitcoin is not just a digital money system; it’s also a timestamp server. In a decentralized network, transactions must be placed in the correct order. If they aren’t, no one knows which transaction came first, and that would break the entire system.

Let’s take a simple example. Alice has $10 and sends it to Bob. Then she tries to send the same $10 to Carol. But she only has $10, so one of these transactions must be invalid. The question is: which one?

In a traditional banking system, this is easy. Banks manage a database where transactions are neatly recorded in chronological order. They decide which transaction came first. But Bitcoin has no central bank. The network needs to determine the transaction order without a central authority.

Satoshi solved this problem by making Bitcoin create its own time. Instead of relying on an external clock or a centralized institution, Bitcoin generates its own timeline using proof of work.

Why Bitcoin Creates Its Own Time

If you’re building a decentralized system with no external influence, who controls time? Is it the clock on your phone? Amazon’s servers? Joe Biden’s laptop? Of course not. Bitcoin cannot rely on external time sources because they would introduce a weak point in the system.

What Satoshi understood—something many people still don’t fully grasp—is that Bitcoin had to invent its own time. This is one of the most revolutionary aspects of the system.

In the physical world, time just is. The future is unknown, and the past is fixed. But in the digital world, that’s not the case. Information can be copied. Files can be rewritten. Time can be manipulated.

For Bitcoin to work as a digital money system, it had to find a way to make time as reliable and irreversible as it is in the physical world. The only way to do that was through proof of work.

What Is the “Arrow of Time”?

In the real world, time only moves in one direction. The future is unknown, and the past is fixed. You get older, but you never get younger. You remember yesterday, but you can’t see tomorrow.

In the digital world, this doesn’t hold true. A file on your computer can be copied and pasted. You can delete an email and rewrite it. Information is not bound by time. But if Bitcoin was going to function as a digital monetary system, it had to find a way to make digital time as irreversible as physical time.

Proof of work is the only way to do that. It is the mechanism that allows Bitcoin to create its own time without relying on any external entity.

How Proof of Work Locks in Time

Proof of work functions as a cryptographic timestamp. Miners solve complex mathematical puzzles to secure transactions in the blockchain. Each block doesn’t just contain new transactions—it also includes proof of how much computational work was done. And that proof cannot be faked.

Because of proof of work, Bitcoin’s history becomes irreversible. Just like you can’t go back in time and change your age, you can’t go back in Bitcoin and rewrite past transactions. This is what makes Bitcoin unique: the blockchain is a permanent, immutable record of events, locked in time.

Why Bitcoin Blocks Take 10 Minutes

Another key aspect of time in Bitcoin is block production. Why does it take an average of 10 minutes to mine a new block?

Bitcoin blocks function as a decentralized clock. Every time a new block is found, it represents a tick in Bitcoin’s timekeeping system.

But if blocks were found too quickly, the network wouldn’t be able to sync properly. The speed of light limits how fast information can be transmitted across the world. If Bitcoin blocks were generated too fast, parts of the network would fall behind, creating chaos.

Satoshi solved this by implementing difficulty adjustment. Every 2016 blocks (about every two weeks), Bitcoin automatically adjusts mining difficulty to ensure the average block time stays at 10 minutes. This ensures that:

• There is enough time for the network to reach consensus on transaction order.
• Miners cannot manipulate Bitcoin by speeding up block production.
• The system respects the physical limits imposed by the speed of light.

If difficulty didn’t adjust, faster computers would cause blocks to be found more quickly, throwing the network out of sync. But because of Bitcoin’s difficulty adjustment, block time remains stable no matter how much computing power is used.

Bitcoin’s Time as an Immutable Record

Since proof of work requires real-world energy to mine a block, Bitcoin’s history cannot be rewritten. Just like you can’t go back in time to change your age, you can’t alter past Bitcoin transactions.

This is why Bitcoin works:

• Every transaction is permanent.
• The blockchain is an immutable history of events.
• The only way to change a block is to re-mine the entire chain, which is practically impossible.

Why Altcoins Without Proof of Work Can’t Work

Many cryptocurrencies, like Ethereum and Solana, have abandoned proof of work in favor of proof of stake or other alternatives. But as we now understand, Bitcoin cannot function without proof of work.

Proof of work is what gives Bitcoin its Arrow of Time. Without proof of work, a blockchain has no reliable way to track time, meaning it cannot function as a truly decentralized money system.

A perfect example is Solana. This network tries to use an alternative system called proof of history instead of proof of work. But Solana goes offline all the time. Why? Because it tries to create a faster blockchain without respecting the fundamental limits of the speed of light and distributed consensus. You can’t break the laws of physics.

This is why Bitcoin is different. Bitcoin respects time. It creates its own time, builds an immutable history, and does it all without trusting any central entity.

Bitcoin is the First Digital Form of Absolute Time

The invention of Bitcoin is more than just digital money. It’s the creation of a new concept: digital time.

Satoshi Nakamoto didn’t just build a currency—he created a system where money exists immutably, in perfect order, and without central control. The key? Proof of work as an independent time mechanism.

Without time, Bitcoin wouldn’t work. And without proof of work, Bitcoin wouldn’t have time.

You’re right to ask. I want to make sure this section is just as detailed as the previous ones. I will go back through the transcript and ensure that every relevant detail from Jack Mallers’ presentation on energy and proof of work is included.

I will now rewrite “4. The Role of Energy in Bitcoin” with maximum depth and detail, ensuring it matches the level of previous sections while strictly using only Jack Mallers’ words and ideas.

The Role of Energy in Bitcoin

Why Does Bitcoin Require Energy?

Everything in the universe runs on energy. Every physical process, every movement, every system that exists requires energy. Whether it’s a tree growing, a car driving, or your own body staying alive—none of it happens without energy. Energy is the fundamental currency of the universe.

Bitcoin is no different. It’s a system that transforms raw energy into digital scarcity. Every Bitcoin transaction, every block added to the blockchain, every piece of security that makes Bitcoin immutable—all of it is backed by real-world energy.

Some people look at Bitcoin and ask, “Why does it use energy at all?” But the real question is: How could a decentralized, trustless money system possibly work without energy?

Bitcoin mining is the process of solving cryptographic puzzles to add new blocks to the blockchain. This process, known as proof of work, requires miners to expend energy through computational effort. The energy spent securing Bitcoin is what makes it impossible to counterfeit, impossible to manipulate, and impossible to shut down.

Without energy, Bitcoin would be nothing more than another trust-based ledger—just like a central bank’s database. But with proof of work, Bitcoin becomes a trustless system that no one can fake, no one can rewrite, and no one can control.

Proof of Work Turns Energy into Security

Bitcoin mining is often misunderstood. People assume it’s just computers solving useless math problems. But that’s not what’s happening at all.

Proof of work is a system that takes real-world energy and transforms it into security. Miners must burn electricity to solve complex computational puzzles. This process ensures that only those who have spent real energy can add new blocks to the blockchain.

This makes Bitcoin fundamentally different from any financial system that came before it. Every dollar ever created by the Federal Reserve? It required no energy. It was printed at the click of a button. Every Bitcoin ever mined? It required actual work. That’s what gives Bitcoin its unforgeable costliness—it cannot be created out of thin air.

No energy = no cost. And if there’s no cost, there’s no security.

Energy Ensures Bitcoin’s Security

Let’s break this down:

• No energy = No cost to attack Bitcoin.
  If Bitcoin didn’t require proof of work, an attacker could simply create fake coins, rewrite past transactions, or manipulate the supply. But because Bitcoin requires energy, an attacker would need to burn an enormous amount of electricity to overpower the network. The cost is so high that attacking Bitcoin becomes practically impossible.

• Energy makes Bitcoin unforgeable.
  Bitcoin is often compared to gold because both require real-world effort to obtain. You can’t fake gold—you have to dig it out of the ground. You can’t fake Bitcoin either—you have to mine it using electricity. This ensures that no one can just create Bitcoin out of thin air, unlike fiat currency.

• Energy makes Bitcoin immutable.
  Every block added to the Bitcoin blockchain is backed by energy that has already been spent. That means you can’t go back and change previous transactions unless you’re willing to redo all the work—something that would require more energy than the entire network has already used. This makes Bitcoin the most secure monetary system ever created.

Bitcoin vs. Fiat: Energy Use Compared

Critics of Bitcoin love to argue about its energy consumption. “Bitcoin wastes electricity!” they say. “It’s bad for the environment!” But let’s compare it to the alternative:

• Central banks manipulate the money supply with zero energy.
  When the Federal Reserve wants to create more dollars, how much energy does it take? Zero. They press a button, and trillions of dollars appear. No work required. No energy burned. Just a few keystrokes, and the money supply is inflated.

• Bitcoin is different—it is physically anchored to energy.
  Every Bitcoin mined represents a measurable amount of energy spent. This means Bitcoin’s monetary policy is tied to the real world. It can’t be manipulated by governments. It can’t be printed at will. It is a monetary system backed by thermodynamic laws, not political decisions.

Why Bitcoin Needs Energy to Be Trustless

People who criticize Bitcoin’s energy use completely misunderstand why it’s necessary. Bitcoin doesn’t just use energy—it transforms energy into monetary integrity.

• Bitcoin doesn’t require trust in a government. It requires work.
• Bitcoin doesn’t require permission to use. It is secured by physics.
• Bitcoin doesn’t require centralized control. It runs on decentralized energy consumption.

Every financial system in history has relied on trust. Trust in banks. Trust in governments. Trust in central authorities to do the right thing. Bitcoin is the first system that doesn’t need trust at all—because its security is physically guaranteed by energy.

That’s why Bitcoin’s proof of work is non-negotiable. It’s not a bug—it’s the entire point.

Got it. I will now write “5. Bitcoin as Information” in the same detailed, structured, and high-energy style while making sure every relevant piece of information from the transcript is included. No shortcuts, no missing details.

Bitcoin as Information

Bitcoin is a Bearer Asset

Most people are used to money that exists as a claim. Your dollars, your euros, or your pounds? They’re not actually yours. They’re a promise—an IOU issued by a government or central bank. Your bank balance is just a number on a ledger, controlled by someone else. If that bank or government decides to freeze your account, guess what? You don’t have access to your money anymore.

Bitcoin is different. Bitcoin is not a debt claim—it is self-sovereign money. If you hold Bitcoin, you don’t need permission from anyone to use it. You own it outright. There’s no bank to approve your transaction, no government to dictate where you can spend it. If you control the private keys, you control the Bitcoin. Period.

This is what makes Bitcoin a bearer asset. Just like physical gold or cash, whoever holds it owns it. But Bitcoin goes even further—it eliminates the physical limitations of bearer assets by existing purely as information.

Bitcoin is Pure Information

Think about gold. Gold has value because it’s scarce, durable, and recognized as a store of wealth. But gold exists in the physical world. You need to store it, transport it, protect it. That means gold can be confiscated, stolen, or physically restricted.

Bitcoin doesn’t have this problem because Bitcoin is pure information.

If you understand Bitcoin’s structure, you realize something radical: the Bitcoin ledger is the money itself.

• There is no distinction between the record of transactions and the actual asset.
• The map is the territory. The Bitcoin blockchain is the money.
• Bitcoin doesn’t need a third party to verify ownership—it is self-verifiable by its very design.

This makes Bitcoin the first form of truly teleportable wealth.

Bitcoin Can Be Stored in Your Mind

If Bitcoin is just information, then what does that mean for how we store it? Simple: you can literally store Bitcoin in your brain.

All you need to access your Bitcoin is your private key. That key can be written down, saved digitally, or even memorized. Think about how revolutionary this is:

• You can leave a country with millions of dollars in Bitcoin stored entirely in your memory.
• You don’t need a vault, a bank account, or a physical object to secure your wealth.
• No government can seize what they can’t see.

Compare that to gold. If you want to cross a border with a fortune in gold, good luck. You’ll need bags of gold bars, security, and permission from authorities. But with Bitcoin, you can cross that same border with nothing but a 12-word seed phrase in your head.

This is absolute self-sovereignty over wealth—something humanity has never had before.

Bitcoin vs. Altcoins: Why They Fail as Information Money

Bitcoin is unique because it is pure, decentralized information, secured by proof of work. Other cryptocurrencies fail at being true digital money because they abandon this principle.

Solana: A Broken Model

Take Solana, for example. Solana claims to be a high-speed blockchain, but its entire architecture fails to account for the speed of light.

• Solana tries to achieve high-speed transactions with something called Proof of History.
• But here’s the problem: Solana’s network keeps going down. Constantly.
• Why? Because it moves too fast for distributed consensus. The blockchain runs ahead of itself and fails to sync globally.

This isn’t just a minor bug—it’s a fundamental design flaw. If a blockchain doesn’t respect the physical laws of information transfer, it cannot function as a decentralized monetary system.

Bitcoin doesn’t have this problem because it syncs with the real world through proof of work and block time adjustment. It respects the speed of light. That’s why Bitcoin never goes down and always stays decentralized.

Ethereum: Centralized by Design

Ethereum also fails as money because it has abandoned proof of work in favor of proof of stake. Here’s the issue:

• Proof of stake centralizes control over the network.
• The more coins you own, the more control you have. This means the rich get richer, while regular users have little say in how the network operates.
• Unlike Bitcoin, where security is based on energy expenditure, Ethereum’s security is based on existing wealth—which reintroduces the same problems as the traditional financial system.

At its core, proof of stake is trust-based. It removes the work from the equation and replaces it with privileged access. This is not how you build a decentralized monetary system.

Bitcoin is the Only True Digital Money

Bitcoin is the only cryptocurrency that functions as real money because it adheres to three core principles:

1. Bitcoin is a bearer asset – If you hold your keys, you hold your Bitcoin. No middlemen, no counterparty risk.
2. Bitcoin is pure information – You can store it in your brain, teleport it across the internet, and secure it with math, not trust.
3. Bitcoin is decentralized through proof of work – No one can create Bitcoin out of thin air. It requires real-world energy, making it the only form of digital scarcity.

Every other cryptocurrency has compromised on at least one of these points. Solana collapses under its own weight. Ethereum has surrendered to centralization. But Bitcoin remains unbreakable, because it is built on fundamental laws of physics, information, and energy.

Final Thought: Bitcoin is the Ultimate Form of Value Storage

For the first time in human history, we have money that is pure information. It doesn’t rely on governments, banks, or intermediaries. It is secured by math and energy, making it the most reliable form of value storage ever created.

Bitcoin is unstoppable wealth, secured by the laws of physics and cryptography, and protected by the most fundamental force of all: energy itself.