Why Bitcoin’s 21 Million Supply is Perfect | Center of Hash E004

Phil Geiger breaks down Bitcoin's economic incentives and why energy consumption secures the world's first absolutely scarce money. This conversation explores how Bitcoin mining creates permissionless energy markets, the difficulty adjustment mechanism that ensures profitability, and why the 21 million supply cap drives demand for computational power. Phil explains Bitcoin's transition from mining subsidies to transaction fee markets, the importance of block space scarcity, and why inflation can never solve Bitcoin's security model. The discussion covers mining centralization risks, the role of mining pools, and how Bitcoin's closed-loop system operates independently of external currencies while creating new demand for electricity.

0:00 - Paper Bitcoin Summer & Wall Street's Bitcoin Black Hole

3:28 - Bitcoin as Shock Therapy for Zombie Markets

5:14 - Introduction to Bitcoin's Economic Incentives

8:30 - Why Bitcoin's Energy Use Solves Money Printing

10:43 - Energy Demand from Block Processing & Coin Issuance

16:12 - Permissionless Energy Sales to Bitcoin Network

21:54 - The Always-Profitable Mining Mechanism

27:03 - Difficulty Adjustment & Self-Regulating Markets

32:29 - Bitcoin's Closed System Independence

40:27 - From Mining Subsidy to Transaction Fee Market

46:15 - Block Space Scarcity Creates Fee Competition

53:29 - Why Inflation Can Never Fix Bitcoin