🔮Bitcarbon Runes

A heresy against the State

the act of casting runes is to unveil threads of fate on specific decision-based outcomes

Casting runes is a form of wielding bitcoin as a guerrilla weapon to unveil threads of fate on a specific decision-based outcome. The practice involves casting runes, a fungible token protocol with a time-based redemption formula, etched onto the Bitcoin timechain. Casting runes is a reflective activity with literal predictive power.

In the context of magic and occult assaults, casting runes typically involves the following steps:

1. Preparation: Seeking to cast runes on physical activities that discourage harmful activities and reduce inefficiency

2. Casting Runes: The time-based runes are then "cast" with a redemption formula. The rules for redemption in the future clearly laid out before the act of casting. The redemption price must be primarily determined by scientific consensus.

3. Redemption: At the prescribed time, the casted rune expires with rate of return on overpaid funds plus accrued interest for the specific decision-based outcome when it has reached consensus.

4. Decision Markets for Liquidity: The runes casted are then made liquid by introducing decision markets. Decision markets are an automated bookmaker for casting runes that accurately reflects its anticipated redemption value at any point in time.

Bitcarbon Runes

Preparation

If the collection of partial common revenue discourages physical activities that are worth less than they cost, then casting runes on such activities reduces inefficiency. One example is casting runes on the carbon footprint of Bitcoin. Just as a tax on sales results in fewer sales, runes casted on the carbon footprint of Bitcoin should result in a lower carbon footprint. But the full harm of carbon emissions' economic and social impacts remains unclear — are they harmful, or are they not?

The aim of casting bitcarbon runes to reduce the prevailing uncertainty around the appropriate pricing of harm for carbon emissions of Bitcoin. Casting runes in this context, is driven by the belief that over the next 30 years, scientific research will reduce the uncertainty of harm today's carbon emissions — both economic and social costs. This act of casting bitcarbon runes must accurately value each ton of carbon emission reflecting its real economic and social impact. The next step involves using partial common revenue from casting bitcarbon runes for sabotaging the carbon flows of Bitcoin mines.

Casting Bitcarbon Runes

For the casting of runes to function effectively, it's imperative that the rules dictating how the rune’s redemption value will be calculated in 2053 are clearly laid out in 2023. This foresight and planning are essential for the market's integrity and predictability. Over the next three decades, it is highly improbable that our grasp of the detrimental effects of carbon emissions will advance to a point where we can unanimously agree on a formula that converts these emissions into a monetary equivalent of harm.

For casting runes to be attractive, the runes’ 2053 redemption price must be determined primarily by scientific rather than political considerations. A viable framework for establishing a methodology could be inspired by the approach used by the Intergovernmental Panel on Climate Change (IPCC). The IPCC, renowned for its rigorous and authoritative climate assessments, does not conduct its own research. Instead, it synthesises its conclusions on climate change based on a comprehensive evaluation of peer-reviewed and published scientific studies.

The distributed methodology employed by the IPCC aligns well with our objectives. Those tasked with assessing the harm of carbon emissions do not rely on their independent evaluations but base their conclusions on the wide array of openly available, peer-reviewed, and published scientific research. This reliance on external, validated sources adds a layer of objectivity and credibility to their assessments. Provided that the players in the decision market maintain confidence in the bond's future redemption price being more deeply rooted in scientific rationale than any political valuation, casting runes stands as a guard against the political tides of 2023 compared to traditional regulatory taxes and allowances.

Redemption

For each ton of carbon emitted by Bitcoin in 2023, a special 30-year zero-coupon rune with a face value equal to the estimated upper limit of the total harm of one ton of carbon emitted by Bitcoin in 2023. Denote this estimate by Bᵁ₂₀₂₃ (2023), where the subscript indicates the year when the 2023 estimate is made and the parentheses show the year to which the estimate applies.

When the casted rune matures in 2053, a prescribed process (see below) will be used to identify the 2053 estimate of the present value, discounted to 2023, the harm of one ton of carbon emissions of Bitcoin in 2023, Bᴱ₂₀₅₃ (2023) .

The rune’s redemption value in 2053, R₂₀₅₃, will be

equation (1)

where r₂₀₂₃ is the interest rate for 30-year runes that prevailed in 2023.

If, in 2053, the redemption value of the rune turns out to be positive, then a person who casted the bond in 2023 and retained it for 30 years has effectively covered the cost, as assessed in 2053, of the economic and social harm caused by Bitcoin's one-ton carbon emission back in 2023.

Conversely, should the actual harm identified in 2053 surpass the maximum harm initially estimated in 2023, the rune’s redemption value would be set to zero. This means that any excess economic and social harm not anticipated in the 2023 estimate would not be financially covered by the rune. It seems appropriate for people to bear the burden of any harm that was not foreseen in 2023.

The rune’s face value must be set above today’s estimate of the most likely cost of a ton of carbon emissions, to ensure that casters pay for the harm from their emissions. If R₂₀₅₃ > 0, then casters receive a rate of return on overpaid funds plus accrued interest. Yet, there arises a practical challenge: the obligation for the people to cast runes, whose value is likely to surpass future estimations of present harm (as per current expectations), may deter them from committing to 30-year runes.

Unveil Threads of Fate

To navigate the issue of committing to long-term runes: the creation of a decision market specifically for these runes, serve as a critical component of casting runes. This decision market operates as a secondary market for the runes. Its core function is to ensure that, at any given moment t, the price of a rune accurately reflects its anticipated redemption value at that same point in time, adjusted to the present value.

Let x denote the beliefs in year 2023+t about 2053 estimate of the damage of a ton of carbon emitted in 2023, and let f(x) be the density function of these beliefs in 2023+t.

The rune's price in 2023+t is then;

equation (2)

where r₂₀₂₃+t denotes the interest rate for a zero-coupon (30–t)-year rune in year 2023+t.

As long as P₂₀₂₃+t > 0, the market predicts the 2053 estimate of the harm of one ton of carbon emissions in 2023. The market fails to predict this future estimate if P₂₀₂₃+t **= 0. However, individuals won't be held accountable for any harm that exceeds today's upper-limit estimates. Moreover, the introduction of the decision market brings an added advantage for redeemers — liquidity. Redeemers who prefer not to retain their bonds for the long term have the option to sell them in this market at any point in time t. This flexibility enables them to recuperate the present value of what might currently be perceived as an overpayment, based on contemporary estimate Bitcoin’s harm.

Decision Markets for Liquidity

Decision markets inject liquidity and dynamism into rune redemption but also provides a real-time reflection of collective market expectations and assessments, thereby addressing the concerns of long-term commitment in the 30-year runes. We draw inspiration from the IOWA political markets, implementing automated bookmakers in a similar vein. By using bitcarbon runes whose value is tied to future assessments, along with decision markets that allows trading based on evolving beliefs about the future, the mechanism offers a way to price current actions based on future outcomes.

Traders profit in this market by accurately predicting changes in beliefs about future harm from carbon emissions and buying or selling bitcarbon runes accordingly. In this scenario, traders who anticipated that the runes were undervalued made a profit by buying low and selling (or redeeming) high. This system also allows redeemers who do not want to hold the runes for 30 years to sell them, providing liquidity. The market prices at any given time reflect the collective beliefs about future harm, and thus the bonds' expected redemption value, allowing for the assessment of Bitcoins' harm and the possibility of profit for skilled traders. Decision markets do not directly decide the final value of redemption in 2053. Instead, it serves as a secondary market that reflects the current beliefs and expectations about what that redemption value will be when the rune matures.

In Sum

• The annual carbon footprint of Bitcoin approximates around 21m tons per year. The total carbon footprint of Bitcoin since its inception sums up to around 127m tons of carbon.

• We use the annual carbon footprint (21m tons) of Bitcoin as the starting point for Bitcarbon Runes.

• A Bitcarbon Rune is a casted rune as a 30y "treasury bond" that has a prescribed redemption formula during expiration. The purpose of Bitcarbon Runes is to accurately price in the cost of harm of one ton of carbon emission (see pricing mechanism).

• We batch etch a rune supply of 21m under the ticker name "x"

• We sell each Bitcarbon Rune at the higher upper estimate of the cost of harm of one ton of carbon emissions which is ≈ $280 - $480.

• The pricing mechanism of Bitcarbon incentivises downward price discovery as the whole game here is a rate of return on overpaid funds (plus accrued interest) when the casted rune expires in 30 years.

• Since redeemers may not want to hold a casted rune for 30 years, we implement decision markets (automated book makers) as a secondary market for liquid redemption in any point in time.

• The revenue that is raised from selling Bitcarbon Runes is used to crowdfund bitcoin mining network state as partial common ownership

• The revenue will be used to accelerate zero-carbon footprint energy protocols.

• The revenue will be used to restart DARPA's research and development in decision markets.

• Bitcarbon Runes will be unveiled as a new pricing mechanism for carbon emissions in the 2024 UN Climate Change Conference (UNFCCC COP 29).