Electrek: "Electricity is about to become the new base currency and China figured it out." Fred Lambert posted an insightful commentary just this morning. For most of human history, 'currency' was a direct claim on tangible, productive output. "Before the abstraction of government fiat or cryptocurrency, value was stored in things that required real work and resources, bushels of grain, livestock, gold, assets with their own direct productive output: horses, and tragically, slaves." Lambert's thesis is that these were 'foundational' assets of economies, representing a direct, cognitive link between labor, resources, and stored value.
In this new all-electric, all-digital age, this fundamental link is re-emerging, but with a new 'unit of account.' Thus, "the 21st-century economy, defined by automated industry, robotics, electric transport, and now power-hungry artificial intelligence, runs on a single, non-negotiable input: electricity." The real base currency in this new paradigm, 'the ultimate representation of productive capacity,' is the kilowatt-hour (kWh). In China, industries are powered by electricity, and now, with the advent of AI, virtually everything is increasingly processed by Large Language Models [LLMs], which are ultimately powered by electricity through power-hungry data centers.
Here is my favorite quote: Electricity "is measurable, divisible, storable, and universal—all qualities that a currency needs, but unlike fiat and crypto, it’s actually directly linked to productive output. No politics. No inflation. Just physics." China is building the “mint” for this new currency at an incredible, world-changing scale, and it has retained absolute state control over its distribution. Total new electricity generation, predominantly from renewables, is staggering, says Lambert. "The country met its 2030 target of 1,200 gigawatts of renewable capacity five years early, in 2025."
I recognize that China is a totalitarian society [remember the Uyghurs] where 'state-owned monoliths manage this entire system—primarily the State Grid Corporation of China (SGCC)—the world’s largest utility.' In a world where electricity rules, cryptocurrencies are, in effect, a competing “currency” that burns the foundational asset (electricity) to create a decentralized store of value. They banned cryptocurrencies in 2021. I am no sinophile, but I admire this as a smart move, one we should emulate. I'm looking forward to the comments with some trepidation.
