This podcast isn't meant to be some Bitcoin or scoring points on the dominant inflation

conversation, although, yeah, it does seem like one of the big things driving inflation

is pretty well unresolved. Instead, it's to point out that the disruptions and dislocations

of the last 18 months are not only not solved, they're metastasizing and creating their

own set of new problems. In the short term, people in industries will clamor

to make do and figure out solutions that involve the minimum possible disruptions. In the long

term, however, the implications could be a much bigger rethinking of how the economic world is organized.

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.

The breakdown is sponsored by Nidig and produced and distributed by CoinDes.

What's going on, guys? It is Thursday, August 26th, and today we are talking about why the world's transitory supply chain issues are not seeming so transitory after all.

First up, however, let's do the brief.

First on the brief today, Bitcoin mining is back.

When China's Bitcoin mining ban when to effect, we saw a massive

drop in hash power being deployed to secure the network. This was, of course, due to all those

China-based miners scrambling to pick up and get out. Over the next few weeks, we saw the biggest

reduction in mining difficulty in history. Now remember, the difficulty adjustment is a roughly

every two-week process,

by which the Bitcoin Protocol automatically makes it easier or harder to win blocks

based on how much competition there is among miners. When an exogenous shock takes out a lot of

hash power, the difficulty adjust down to incentivize more miners to come online, because it becomes more economical

for them to do so, even if they have a higher cost basis of electricity that makes it difficult

to be profitable at higher difficulties. Well, as all that hash power redistributes, the mining

...