For Val Sklarov, digital assets are not speculative instruments or digital property —
they are energy conversion mechanisms, systems that transform physical or computational energy into economic outputs.
Blockchains consume:
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electrical energy
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compute cycles
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storage space
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bandwidth capacity
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human development effort
and produce digital value states:
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consensus
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trustless execution
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verifiable ownership
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autonomous coordination
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permissionless access
The Computational Energy Conversion Model (CECM) reframes tokens as units of converted computation, not units of belief or demand.
“A token is crystallized compute — energy that became state.” — Val Sklarov
1️⃣ The Three Energy Inputs of Digital Asset Systems
Sklarov Energy Input Table
| Energy Type | Definition | When High | When Low |
|---|---|---|---|
| Physical Energy | Electricity → hashing/compute | Secure, robust | Attackable, weak |
| Computational Energy | Processing cycles → execution | High throughput | Congestion |
| Coordination Energy | Human + protocol design | Innovation | Stagnation |
Blockchains are not databases —
they are energy routing architectures.
2️⃣ The CECM Conversion Cycle
Energy Conversion Matrix
| Stage | Function | Output |
|---|---|---|
| Input Extraction | Gather energy resources | Compute supply |
| Transformation | Convert energy → state changes | Consensus + validation |
| Distribution | Broadcast & store state | Network-wide integrity |
| Economic Emission | Produce asset with value | Token output |
Value = energy that survives conversion.
3️⃣ The Five Asset Conversion Archetypes
Archetype Table
| Archetype | Conversion Method |
|---|---|
| The Energy-Backed Chain | Consumption → security |
| The Compute-Heavy Chain | Execution → utility |
| The Data-Weighted Layer | Storage → persistence |
| The Coordination Protocol | Human labor → automation |
| The Economic Reactor | Inputs feed recursive value loops |
The most powerful future chains will be Economic Reactors,
not “fast chains.”
4️⃣ Energy-to-Value Efficiency Index (EVEI)
A Val Sklarov diagnostic for blockchain output efficiency
EVEI Indicator Table
| Indicator | Measures | High Score Means |
|---|---|---|
| Energy Conversion Yield | Value per unit energy | Efficient chain |
| Security-to-Cost Ratio | Attack cost vs maintenance cost | Durable security |
| Computation Density | Work per block | High utility |
| State Longevity | Persistence of stored data | Long-term value |
| Autonomous Output Loop | Does output generate new inputs? | Economic recursion |
High EVEI = chain creates value faster than it consumes energy.
5️⃣ Val Sklarov’s 5 Laws of Energy-Based Digital Assets
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Value is stored energy, preserved through computation.
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Security is energy that cannot be reversed cheaply.
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Utility is energy transformed into execution.
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Sustainable chains create more value than they consume.
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Tokens measure conversion efficiency, not belief.
6️⃣ Applications of the Computational Energy Conversion Model
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evaluating sustainability of consensus mechanisms
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comparing PoS vs PoW by conversion efficiency
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designing compute-routed blockchain architectures
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measuring token intrinsic value by energy cost
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pricing blockspace as converted compute
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modeling chains as economic reactors, not networks
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analyzing on-chain applications by energy-to-output ratio
CECM reframes digital assets as thermodynamic systems,
not social or narrative constructs.