Imagine our forest cabin heated entirely by mining bitcoin.

[ #photography, #nature, #birds ]

[ #photography, #nature, #fungi ]

[ #photography, #nature, #fungi ]

[ #photography, #nature, #fungi ]

[ #photography, #nature, #fungi ]

Ideally my forest property will have some water access. I need to do more research on 'water rights'.

Saturday morning, mining on the nostr+bitcoin networks, life is good

My relationship to housing is complicated. I currently rent, I understand I'm throwing my money away, but I also don't want to buy a neighborhood's HOA unit. I want forest property that I can tend to, but I also don't want debt. A loan might be necessary but I want to avoid it if at all possible.

Dreaming about forest property, this morning

Bitcoin Fits The Same Pattern: Store of value infrastructure also looks “bubble-like” by traditional metrics. But if the alternative is watching your retirement savings erode in a deflationary, aging economy with no workers generating returns… Both AI and Bitcoin are what “necessary bubbles” look like. The capital allocation is extreme because the problem is extreme. The people calling it a bubble aren’t wrong about the metrics. They’re wrong about whether the metrics matter when you’re trying to avoid structural collapse.​​​​​​​​​​​​​​​​

The demographic crisis creates a forcing function that requires massive capital allocation toward cognitive replacement. What looks like a bubble from traditional valuation metrics is actually civilization attempting to build its way out of structural labor shortage. The capital has to flow somewhere. The alternatives (immigration, fertility policy, accept decline) are all either failing or politically impossible. So yes, there will be waste. Yes, most AI companies are overvalued. Yes, it has bubble characteristics. But unlike tulips or dot-com, there’s an actual structural necessity driving it. The desperation is real. The need is real. You’re not betting on whether AI is “worth it” by normal metrics. You’re betting on whether civilization will accept economic contraction or throw everything at the one visible technological solution. And historically, we always choose “throw everything at technology” over “accept decline.”

The Key Insight: In Scenario 1, we’re fucked anyway - demographics crater and we have no replacement. In Scenario 2 and 3, the infrastructure matters. So from a portfolio perspective, you’re not betting on hype. You’re betting on “they have to try, and the infrastructure layer is valuable regardless.” That’s not bubble logic. That’s insurance against civilizational decline with upside if it works better than expected.

Three Scenarios: Scenario 1: It’s Actually a Bubble AGI doesn’t scale, hits fundamental barriers, infrastructure investment was wasted. Markets crash, everyone who said “I told you so” gets to feel smart for five minutes before we return to confronting the demographic crisis with no solution. Scenario 2: It Works But Slowly We get meaningful automation but not transformative AGI. Enough to partially offset worker shortage, not enough to fully justify current valuations. Some crash, some consolidation, but the infrastructure we built still matters because we need it. Scenario 3: It Actually Works AGI happens on something like the current timeline. Current investment looks prescient in retrospect. Infrastructure layer becomes the most valuable asset class in history.

Why “Bubble” Language Fails Bubbles pop when people realize the asset doesn’t deliver the promised value. But AGI doesn’t need to deliver the promised value (artificial god). It just needs to deliver enough cognitive replacement to offset the missing workers. That’s a much lower bar. And we’re already seeing narrow AI hit that bar in specific domains. So even if we get “disappointing AGI” - something that’s 10x better than GPT-4 but nowhere near sci-fi singularity - that might still be enough to justify current infrastructure investment. The bubble critics are assuming the payoff needs to match the hype. But the payoff just needs to match the problem. And the problem is massive.

The Bubble That Has To Happen Traditional bubble: Capital floods into an asset class beyond any reasonable return expectation. This situation: Capital floods into the only visible solution to structural labor shortage. Yes, most AI companies will fail. Yes, current valuations look absurd by normal metrics. But if the alternative is watching developed economies shrink 20-30% over the next two decades, then even a 10% chance of AGI working justifies trillion-dollar bets. It’s not irrational exuberance. It’s rational desperation.

AI Isn’t a Bubble - It’s a Bailout Everyone calling AI a bubble is using the wrong reference class. They’re comparing it to dot-com, crypto, tulips - speculative manias disconnected from fundamentals. But what if the fundamental is “civilization as currently structured cannot function without replacing the missing workers”? Then suddenly the “insane” capital allocation makes perfect sense. You’re not pricing AI companies on 2025 revenues. You’re pricing them on “what percentage of the $100+ trillion global economy can we save from demographic collapse?”

Reading Zeihan’s *The End of the World is Just The Beginning* He clearly understands fiat’s structural problems, but then frames both GME and Bitcoin as examples of fiat *failure* rather than what they actually are. GME wasn’t “gamer mania”, it was market structure meeting coordinated information flow. Bitcoin’s success isn’t a symptom of fiat failure, it’s an architectural response to it. Conflating monetary dysfunction with market mechanics and treating a new monetary protocol as speculative mania wasn’t something I saw coming. #bookstr

#photography

#photography