[HN Gopher] Cambridge Bitcoin Electricity Consumption Index
___________________________________________________________________
Cambridge Bitcoin Electricity Consumption Index
Author : apples_oranges
Score : 831 points
Date : 2021-02-10 12:54 UTC (10 hours ago)
(HTM) web link (cbeci.org)
(TXT) w3m dump (cbeci.org)
| rednerrus wrote:
| I'm here for the bad takes by the hodlers.
| macawfish wrote:
| This comment will probably get buried but I wish someone would
| make something like coinmarketcap that showed how much energy was
| being used to secure each cryptocurrency.
|
| If there were solid metrics, it'd help people who want to be more
| conscientious about where they put their money to actually do
| that.
|
| Something like "coincarboncap".
|
| A lot of cryptocurrencies don't use even a fraction of the energy
| bitcoin uses but there's no index to show that, so even if there
| were incentives for people to invest in energy efficient
| cryptocurrencies, how would they know which ones to go for?
|
| The closest thing I can think of is whattomine. Maybe they'd be
| best equipped to build something like this, although I'm not sure
| if they'd have an interest in it.
| perseusprime11 wrote:
| According to this report, Bitcoin mining is fueled by renewables:
| https://coinshares.com/research/bitcoin-mining-network-decem...
| nahuel0x wrote:
| a good and rational use of resources, it's not like we are in the
| middle of a planetary ecological disaster or a possible end-of-
| civilization climate change crisis. Capitalism at its finest.
| nullcat wrote:
| Imagine if all real currency was replaced by bitcoin.
|
| How much green house gases would be generated to keep our
| economic engines going and also who would be genrating this
| money?
|
| What would the economic outlook of the world look like during
| covid if it happened in a world where all currency was bitcoin?
| dd36 wrote:
| It's an energy virus and needs to be stopped.
| iwubu99 wrote:
| Release the free energy patents or btc dies
| panpanna wrote:
| Well, we need to build houses with bitcoin miners for heat
| generation.
|
| (Idea stolen from guy on reddit who actually did this)
| Hamuko wrote:
| And who is gonna foot the bill for the mining?
| celticninja wrote:
| You already pay to heat your house, what if you could be paid
| to hear your house?
| Hamuko wrote:
| Your house is not necessarily heated with electricity.
|
| Running an ASIC 24/7 would use up like $285 worth of
| electricity per month if you pay 12 cents for each
| kilowatt-hour.
| BenoitEssiambre wrote:
| So about the normal amount for heating a house here in
| Canada.
| BenoitEssiambre wrote:
| Although I am not a fan of cryptocurrency popularity (mainly
| because of the potential to destabilize the macro economy), and
| I don't know much about this company:
| https://qarnot.com/en/home/, but I find they have a great name
| suggestive of thermodynamically optimal computing, Carnot being
| the father of thermodynamic efficiency. Carnot came up with
| thermodynamics to optimize steam engines, maybe making him the
| most steampunk of scientists. Thermodynamically optimizing bits
| is an echo of that for the cyberpunk age.
| jf22 wrote:
| Remember, the earth is burning.
|
| Crypto is a huge environmental issue.
| paystaxes wrote:
| If all crypto was mined with renewable energy, would it be a
| huge environmental issue?
| jf22 wrote:
| Yes. Renewable doesn't mean without a carbon or other cost.
| All energy usage and production takes resources from the
| planet.
| samuel wrote:
| It's completely meaningless because GWh aren't interchangeable.
| A hydro o thermal energy source too far from inhabited places
| could be used for bitcoin mining and its CO2 footprint would be
| near zero.
|
| I'm not saying you are wrong but this requires a far more
| exhaustive analysis.
| jf22 wrote:
| So we'd build energy production away from where people live
| just to mine a digital currency?
| mikeyjk wrote:
| The government's of the world seem concerningly content
| underplaying this.
|
| I'm glad I don't have kids.
| dang wrote:
| Other large current related threads:
|
| https://news.ycombinator.com/item?id=26093099
|
| https://news.ycombinator.com/item?id=26091536
|
| https://news.ycombinator.com/item?id=26090330
|
| https://news.ycombinator.com/item?id=26082324
| bjr- wrote:
| Why do these discussions so often assume electricity is a finite
| resource? Are people not able to turn their lights on because of
| Bitcoin miners?
|
| When Bitcoin miners consume electricity shouldn't that increased
| demand affect the market price and dis-incentivize mining? What
| other use of electricity has such a high price elasticity? People
| don't turn off their ACs in the middle of summer because
| electricity costs are high -- they value comfort, a lot. But
| miners, IIUC, shut down their ASICs when they're unprofitable.
| Bitcoin mining is extremely price sensitive.
|
| If Bitcoin mining is driving up local electricity prices it seems
| worthy of local regulation. It also seems like an incentive for
| increased energy production -- and given today's prices would
| most likely be clean energy production.
|
| The report states Bitcoin's consumption is 39% clean energy. That
| is considerably higher than the overall portion of global energy
| consumption from renewables. Does this not mean Bitcoin is a
| large source of demand for renewable energy?
| https://ourworldindata.org/grapher/share-electricity-renewab...
|
| Increased demand increases prices in the short-run and
| incentivizes production -- decreasing prices, and further
| increasing usage in the long-run. Right? What am I missing?
| hebrox wrote:
| Yesterday I read "What Bloomberg Gets Wrong About Bitcoin's
| Climate Footprint" [0] where the writer tries to make a case that
| you shouldn't compare Bitcoin to VISA, but more to something like
| the dollar. While I don't agree with his whole story, for example
| including the US army in the costs, I thought it was an
| interesting way of looking at it.
|
| Edit: he also points out that after all Bitcoin has been mined,
| the electricity use will probably change.
|
| [0] https://finance.yahoo.com/news/bloomberg-gets-wrong-
| bitcoin-...
| kqr wrote:
| And this is not surprising. Cryptocurrency is designed to be
| anti-efficient. "Proof of work" is just a synonym for "having
| wasted tons of energy."
|
| This is my main beef with these systems. Gaining fundamental
| value from the act of wasting energy and being the one to
| accelerate the (local) heat death by the most is not a sensible
| basis for a 21st century technology.
| ChainOfFools wrote:
| proof of work is cleverly misnamed, because what's actually
| going on is proof of wasted work, or simply proof of waste. you
| are proving you threw a precise measure of something valuable
| away (money/resources/energy... whether your own or someone
| else's).
|
| the behavioral econ assumption is that you will seek to recover
| that loss someday, thus requiring you to hold and protect the
| receipt token representing it until that time.
| kerng wrote:
| Indeed, the comment shows how valuable Bitcoin actually really
| is - it's pretty impressive.
| rspeele wrote:
| Interesting take. Does the amount of money spent on Herbalife
| show how valuable it actually really is? What about essential
| oils or healing crystals?
|
| In a tautological way, sure, everything's worth what
| somebody's willing to pay for it. But the above examples must
| call into question whether there is a distinction between
| what something is worth in dollars, and what its _merit_ is.
| kerng wrote:
| Good points. To give it a totally different spin, imagine
| Bitcoin's value is pretty constant actually and what
| changes is the dollar (its being devalued at a rapid pace
| at the moment).
|
| There is only a limited supply of Bitcoin, but there will
| be more and more dollars printed over the next decades
| (making the dollar even less valuable compare to the
| constant Bitcoin). So Bitcoin will be interesting to watch
| - quite exciting for future and to see what's gonna happen.
| deeeeplearning wrote:
| Most newer cryptos are built on proof of stake. So your
| criticism is mainly aimed at Btc.
| sharpneli wrote:
| Naturally. While POS cryptos share many other bad sides with
| Bitcoin at least they don't ruin the planet so they're far
| far better.
| fastball wrote:
| POW only ruins the planet if you're using non-renewables /
| non-nuclear. It's not intrinsic.
| hacknat wrote:
| Which is where most energy is derived from, so it's
| ruining the planet.
| kqr wrote:
| Sure, you can argue that nuclear (or whatever) is a
| better way to produce energy than most/all others
| currently known, but that's a very low bar to clear.
|
| There are more and less sucky ways to produce energy, but
| let's be clear: all of them suck to some degree. There is
| no type of energy production where the mere act of
| producing that energy is a net positive.
|
| Then the argument turns to whether or not the gains from
| proof of wasted energy-type systems outweigh the
| drawbacks of producing the required energy -- even if
| that energy is produced in the least sucky way. I'm
| firmly in the no camp.
| patrickthebold wrote:
| quibble on "you're". It's a shared planet, so it gets
| ruined if enough mining is done on non-renewables. Most
| people complaining aren't mining at all.
| fastball wrote:
| Was this a useful comment? "You're" is just a stand-in
| for "people are". The second person is a fairly common
| way to structure such a sentence.
| fthssht wrote:
| The correct comparison is with the transaction and storage
| costs, in electricity, of storing gold in fort knox and moving
| it once a century in a boat across the ocean. Tesla's 1.5
| billion USD in bitcoin probably won't move in your lifetime.
| lmkg wrote:
| My issue with it is even more fundamental than this: it is
| _structurally impossible_ for Proof of Work to become more
| efficient. If you find a more energy-efficient way to mine, the
| correct decision is not to reduce your energy usage, but rather
| to use the same amount of energy to compute more hashes.
| panarky wrote:
| The energy-per-transaction ratio is only relevant if the
| utility of Bitcoin is to compete with Visa to process
| transactions.
|
| However, if the ultimate utility of Bitcoin is to store
| trillions of dollars of value, transmit it into the future,
| across borders, quickly, pseudonymously, and without capital
| controls from coercive and corrupt governments, then energy-
| per-transaction is an inappropriate metric.
|
| Bitcoin is the only asset with these properties, and it
| doesn't need many transactions to do what it does best.
|
| If you find you're angry about Bitcoin's energy usage but
| you're not even more angry about the energy wasted by
| industries and technologies that have much less social
| utility, then maybe it's not the wasted energy that you're
| angry about after all.
| TomVDB wrote:
| There are industries with less social utility than Bitcoin?
| paulgb wrote:
| > However, if the ultimate utility of Bitcoin is to store
| trillions of dollars of value, [...] then energy-per-
| transaction is an inappropriate metric.
|
| The amount of energy used in equilibrium in Bitcoin mining
| is proportional to the price of Bitcoin (between halvings
| and holding the fraction of total mining costs spent on
| energy constant). If the price of Bitcoin rose enough that
| it had a 2TN market cap tomorrow, miners would have
| incentives to burn 3-4x more energy.
|
| I agree that transaction-based accounting is flawed, but it
| doesn't make the problem go away.
| mint2 wrote:
| > without capital controls from coercive and corrupt
| governments
|
| And conversely too! letting corrupt governments and
| corporations transfer money with ease!
| panarky wrote:
| That's always the problem with freedom, it works for good
| guys and bad guys alike.
| toyg wrote:
| Let's not forget druglords, illegal arms dealers,
| hitmen...
| meowkit wrote:
| Paging argument from 2010...
|
| You would use Monero or physical cash for those
| activities.
|
| Bitcoin is much easier to trace once you have a lead.
| toyg wrote:
| It's just a tradeoff between opsec and ease of use.
| Monero is harder to turn back into cash, precisely
| because it carries a worse reputation.
|
| Note that my argument was _pro_ btc - I can see
| underground demand sustaining its price in the long run.
| Solvitieg wrote:
| Because you definitely can't do that with fiat...
|
| This is such an old, tired take.
| bayesian_horse wrote:
| No, you really can't do that easily and sometimes at all
| with "fiat". Which is why "money laundering" is a thing.
| Or drug cartels having the problem to stash or move
| hundreds of thousands of small dollar bills over North
| and South American borders.
|
| A somewhat trustworthy state having control over or
| transparency into money transfers generally is a very
| good thing. If your government isn't trustworthy enough,
| you have bigger problems than the currency.
| [deleted]
| toyg wrote:
| When it comes to truth, old != bad. The oldest profession
| is still around, for example, because demand will always
| be there.
| aeternum wrote:
| By computing more hashes, you raise the difficulty for
| everyone else mining so you do ultimately push out the less
| efficient miners.
| meow112012 wrote:
| If someone has money and power already, they can take a
| better chance to get more bitcoin. How about the other guys
| and the other guys ... 10/20 years later?
| lxgr wrote:
| The problem is that there is, by definition, economic
| incentive to spend an amount of electric energy equal to
| the economic value of transaction confirmation to all
| protocol participants.
| rspeele wrote:
| That's efficient if you define efficiency as hashes
| computed per watt. That's the metric by which less-
| efficient miners are driven out.
|
| However, this does nothing for the overall energy
| efficiency of Bitcoin, which could be defined as
| transactions processed per gigawatt. If energy gets
| cheaper, that number only gets smaller.
| [deleted]
| Lambdanaut wrote:
| You may be interested in Ada coin. It uses a "proof of stake"
| algorithm instead which does not rely on processing power.
| Virtually infinitely more eco-friendly.
| dsco wrote:
| There's also proof of stake which requires a lot less energy. I
| think a lot of nuance is missed when discussing Bitcoin and its
| consensus mechanism as the only way of running a blockchain
| drak0n1c wrote:
| Proof-of-stake distributed ledger technology is extremely
| efficient. Hedera Hashgraph uses a gossip protocol and has
| extremely high transaction-per-second support with finality.
| Already being used by major corporations.
|
| https://hedera.com/
| PragmaticPulp wrote:
| > I think a lot of nuance is missed when discussing Bitcoin
| and its consensus mechanism as the only way of running a
| blockchain
|
| Bitcoin holders are financially incentivized to steer
| everyone else toward Bitcoin.
|
| As long as early adopters are financially invested in
| alternative currencies failing, we're going to continue
| seeing a focus on Bitcoin.
| xorcist wrote:
| So far no one has shown in practice how to run a
| decentralized proof of stake network.
|
| How do you bootstrap a node in the face of conflicting
| history? How do you handle network partitions?
|
| There are also open question surrounding security, prevent
| actors from colluding and so on. Most other blockchains do
| not even bother. At least the Ethereum people have the
| ambition to have something practical. Let's study the design
| when it you can make an eth transfer with it.
|
| These discussions are like when in a discussion about
| uranuium waste management someone inevitably cries about how
| we should just scrap it and go with fusion energy instead.
|
| Great idea, but let's have something working first.
| ericb wrote:
| Tezos is up and running and working just fine.
| dlubarov wrote:
| Plus Cosmos, Polkadot, Solana, Cardano, Avalanche, NXT,
| and probably others I'm forgetting. There are plenty of
| PoS systems in production these days!
| xorcist wrote:
| All of those are run by a singular entity. This makes it
| trivial for them to implement PoS.
|
| That's not the use case something like Bitcoin is built
| for.
| DanielleMolloy wrote:
| It is quite noteworthy that Ethereum trusts proof of stake
| so much that they want to move to it though. Ethereum has
| some really good devs.
|
| Last time I checked for altcoins that are trying to solve
| Bitcoin's various scalability problems I ended up with a
| proof of stake coin too, Nano (using the rather new idea
| block lattice, small but so far quite low-toned development
| team that seemed to focus on problem solving rather than
| scammy marketing).
|
| I'm surprised that Ethereum is convinced that they can
| ,,just move" from proof of work to proof of stake. Should
| be possible for Bitcoin too then, shouldn't it? (Maybe I'm
| missing something about this transition.) Nano required a
| whole new development.
| somebodythere wrote:
| Ethereum's social contract has evolved to become much
| more "fluid" and open to change than Bitcoin's. Mainline
| Ethereum today is is very different in many ways to what
| it was two years ago. There is even a proposal with a lot
| of support to have transaction fees mostly burned rather
| than mostly given to miners. Aside from minority forks,
| something like that would never happen in Bitcoin in a
| million years.
|
| So, while Bitcoin techinically _could_ switch to proof of
| stake, it probably won 't.
| somebodythere wrote:
| You can make near-zero-cost ETH and ERC-20 transfers right
| now using L2 solutions like state channels and rollups.
| There are also a few POCs of applications like Uniswap
| running on L2.
| chaostheory wrote:
| When is that rolling out for Ethereum
| hacknat wrote:
| It's a really complicated transition, but it's already
| started. The estimate is that there's probably about $1.5B
| worth of transactions left to mine, but most transactions
| will be switching over to PoS in the coming year. No one
| knows for sure when the full transition will occur, it's
| more of a gradual phase-out.
| mrits wrote:
| I like Ethereum not just because of the more responsible
| PoS but also because mining is currently asic resistant. A
| lot of the waste going into bitcoin right now is building
| specialized miners that will go into a landfill after a
| generation or two. Eth can still be mined with hardware you
| already own.
| piplikoc wrote:
| It's coming with Ethereum 2.0. The transition process to
| Eth2 is on the way, it is estimated that they will finish
| by 2022.
| freerobby wrote:
| Proof of space, too. See e.g. https://www.chia.net
| Nursie wrote:
| Ugh, that seems like it just exchanges one form of waste
| for another. If it takes off the price of storage is likely
| to rocket in the same way GPUs have.
|
| Let's not shoot ourselves in the foot, again, for another
| digital gold rush?
| sudosysgen wrote:
| IIRC some Proof of Storage algorithms allow you to store
| actually useful data, and there shouldn't be any
| incentive to get fast storage, so it should have less of
| an effect on the average person.
| Nursie wrote:
| True, and I understand this is how projects like Sia
| work. But IIRC Bram Cohen's proposal was effectively PoW
| but with storage.
| hacknat wrote:
| Ethereum has already started transitioning to proof-of-stake
| which will significantly lower transaction costs in Ethereum.
| arithmomachist wrote:
| At the very least the proof of work ought to compute something
| useful.
| lxgr wrote:
| That would be great, but unfortunately the structure of
| problems that are well suited to proof of work (hard to
| compute but easy to verify in a decentralized way) doesn't
| seem to have too many practical applications.
| arithmomachist wrote:
| Aren't there lots of NP problems that have this property?
| lxgr wrote:
| Yes, but how many of them are distributable in the way
| required by the constraints of mining? (I really hope I'm
| wrong and would love to see a counterexample of
| "constructive" mining!)
| kqr wrote:
| All of them, by definition.
| root_axis wrote:
| It can't be made useful because the output of a useful
| calculation can't be known in advance - otherwise it wouldn't
| be useful.
| minsc__and__boo wrote:
| You can gain use computing to gain specificity from
| complexity though, and recognize that new specificity -
| i.e. brute force protein folding calculations.
| freebreakfast wrote:
| I think Gridcoin offers a happy medium. It's proof of
| stake, but it also offers rewards for participating in
| BOINC-based research projects.
|
| https://gridcoin.us/
|
| Not exactly "proof of work" in the same sense its being
| used, but I wish that the project would get more attention.
| fpoling wrote:
| Cryptocurrency are inefficient by the design only at creation.
| But once mined, in principle with the right setup transactions
| can be arbitrary cheap. It is similarly as with gold. It is
| expensive to dig it once, but once a coin is minted, it can be
| used for millions of transaction making transaction cost rather
| low.
| NickM wrote:
| This is completely incorrect. Transactions are processed as
| part of mining. You cannot simply stop mining and continue
| doing transactions for free; the whole point of the mining
| process in a PoW cryptocurrency is that mined coins are given
| out as a reward for helping to secure transactions.
| criddell wrote:
| What happens when all the bitcoins are mined? There still
| has to be some settlement process or else the blockchain
| ends.
| cstein2 wrote:
| Miners are incentivised with transaction fees alone after
| all the bitcoins are mined.
| throwaheyy wrote:
| Mining continues but the reward comes solely from
| transaction fees.
| marcosdumay wrote:
| > What happens when all the bitcoins are mined?
|
| Then miners will get only the transaction fees. But it's
| still the same process. (Anyway, that won't happen, the
| number of available BTC to mining will asymptoptically
| approach 0, but will never get there.)
| cdiddy2 wrote:
| No, new bitcoins run out around 2140. From then on there
| will be no new bitcoin
| SamBam wrote:
| The algorithm makes it such that the last coin will be
| mined sometime around 2140. My assumption is that people
| just plan on moving to another fork before that point.
| newswasboring wrote:
| Actually your analogy is flawed. Because the way bitcoin
| works you have to pay some energy cost per block and you have
| a limited time to use that block because the next block will
| be coming in in 10 mins. It would be more like we had to make
| new coins every 10 mins.
|
| Or am I missing something here?
| fpoling wrote:
| Bitcoin probably is not fixable, but other designs are much
| better at supporting cheap transactions. There is nothing
| inherently expensive in maintaining the block chain.
| newswasboring wrote:
| this thread is about bitcoins. So I thought its implied
| we are talking about bitcoin. Maintaining a POW block
| chain is inherently wasteful, but yes POS blockchains can
| maybe save this.
| fpoling wrote:
| Even with bitcoins just consider what happens once all
| bitcoins are mined. Does the whole thing collapse? Or do
| bitcoins continue to be used similar to POS?
| dragontamer wrote:
| Then the transaction fees associated with every
| transaction fund the miners.
| newswasboring wrote:
| The block mining algorithm doesn't change, right? So I
| don't see how it will move to POS. That will require some
| sort of buy in from the users. Every time something new
| is introduced in Bitcoin the legacy remains and the new
| ideas fork the chain into their own thing. Usually these
| alternatives either die or ignored.
| rwoerz wrote:
| Could you elaborate on that? How can future transactions be
| accommodated if everyone stops mining new blocks?
| dmnd wrote:
| Miners get compensated by transaction fees too.
| flopunctro wrote:
| In the grand scheme, the "tons" (or rather, gigajoules) of
| energy wasted by the Proof-of-Work are nothing. The Sun
| radiation that hits Earth every second dwarfs this consumption.
|
| Also, one of the definitions of life is "a local decrease in
| entropy, at the cost of a global, larger, increase in entropy".
| By this criteria, every living being is a bad thing for the
| universe, because it accelerates the global heat death ever so
| slightly.
|
| I guess my point is, some uses of energy are acceptable, even
| desirable. And every use of energy accelerates the heat death
| of the universe, but we humans are insignificant on this scale;
| there is really nothing that we can do to even accelerate our
| Sun's death. We're not even Kardashev-1 :)
| danans wrote:
| > Also, one of the definitions of life is "a local decrease
| in entropy, at the cost of a global, larger, increase in
| entropy". By this criteria, every living being is a bad thing
| for the universe, because it accelerates the global heat
| death ever so slightly.
|
| The discussion about energy use of Bitcoin is within the
| context of the effectively closed system of Earth.
|
| Until such a time that solar generated electricity is too
| plentiful to meter and ubiquitous, Bitcoin mining will cause
| huge demand for fossil fuel based energy, with the associated
| consequences for climate change.
| flopunctro wrote:
| > effectively closed system of Earth.
|
| All the plants, algae, and everything with chlorophyll
| would beg to differ. I really think we cannot consider
| Earth a closed system, because we're not a rogue planet in
| the insterstellar void.
|
| Our solar _system_ would be a better approximation of a
| "closed system".
| vruiz wrote:
| I was going to point that the universe is not relevant here,
| only humans, the energy we produce and how we produce it
| matters. But then I realized that either your comment must be
| tongue in cheek or you are trying to hard to rationalize this
| than there is no point on try to convince you.
| flopunctro wrote:
| Okay, I admit my comment was a bit rushed, and I apologize
| for that. It's not tongue-in-cheek, and I don't feel that
| I'm rationalizing things (but then, I guess I wouldn't feel
| it even if I were).
|
| I was trying to view things in a bigger picture. Ofcourse
| we are using too much fossil fuels at this time. Ofcourse
| our functioning is pretty unsustainable.
|
| What I am trying to say, is that sometimes high energy
| usage is acceptable. Should we stop launching things in
| orbit? Should we stop the LHC?
|
| I think that for _some_ people, having a thing such as
| bitcoin is worth the energy expenditure. It is perfectly
| okay that for you, it _isn't_ acceptable. I am not trying
| to convince you of anything. Just affirming that there
| exists a subset of humans that find value in it, and
| therefore are willing to allocate resources -- be that
| electrical energy, fiat money, or mindshare.
| imtringued wrote:
| >In the grand scheme, the "tons" (or rather, gigajoules) of
| energy wasted by the Proof-of-Work are nothing.
|
| >but we humans are insignificant on this scale; there is
| really nothing that we can do to even accelerate our Sun's
| death. We're not even Kardashev-1 :)
|
| I am shocked that you are brave enough to write these things
| in the same comment. The problem with Bitcoin and proof of
| work is that it's literally capable of consuming our sun and
| all energy in the universe.
| rspeele wrote:
| Is that you, Gary Johnson?
| flopunctro wrote:
| No idea who's Gary Johnson. I'm just a guy from Eastern
| Europe, watching too much Isaac Arthur.
| rspeele wrote:
| Just a playful joke. He's a US politician who ran for
| president in 2016 as a third-party (i.e. no chance of
| victory) candidate.
|
| At one point he was asked about his long term view on
| global warming, and he said "In billions of years, the
| sun is going to actually grow and encompass the Earth,
| right? So global warming is in our future."
| flopunctro wrote:
| Ah, I see. Thanks for explaining :)
|
| Gary's response was obviously tongue-in-cheek, even
| somewhat flippant. My comment wasn't trying to be ironic,
| though I now see that it could be interpreted so.
| jkuria wrote:
| Mining for gold is even more inefficient. You've got dig earth
| several kilometers down, build massive infrastructure, use
| harmful chemicals to purify it, lose lives etc etc
| minsc__and__boo wrote:
| That's falsely equating fixed and variable costs. A mined
| bitcoin is useless if the network isn't burning electricity,
| whereas mined gold is continually useful after mining.
| wonnage wrote:
| At least gold is useful for something though
| kosievdmerwe wrote:
| Gold also doesn't require constant electricity expenditure
| to keep it's value and "utility"z
|
| A kilo of gold once mined is perpetual. A bitcoin needs the
| whole network to keep running (and be large enough so that
| miners can't collude) to keep it's value.
| 2112 wrote:
| > "Proof of work" is just a synonym for "having wasted tons of
| energy." This is my main beef with these systems. Gaining
| fundamental value from the act of wasting energy [...] is not a
| sensible basis for a 21st century technology.
|
| This is my main beef with the system we live in already.
|
| See ; Bullshit Jobs
|
| https://en.wikipedia.org/wiki/Bullshit_jobs
|
| "Bullshit Jobs: A Theory is a 2018 book by anthropologist David
| Graeber that argues for the existence and societal harm of
| meaningless jobs. He contends that over half of societal work
| is pointless, which becomes psychologically destructive when
| paired with a work ethic that associates work with self-worth."
|
| I am not contesting the Bitcoin situation is ... interesting.
|
| (edit = comment layout )
| hardtke wrote:
| It's really hard to see how BTC does not get outlawed by most
| governments. Since financial transactions are zero sum and
| provide no economic value, it's the equivalent of a giant
| methane leak.
| optimiz3 wrote:
| Hypothetically this could be amortized better by increasing the
| transactions per block. Just because Bitcoin was first doesn't
| mean it's the best wrt efficiency. PoW can be competitive with
| legacy infrastructure with good clearing design.
| kqr wrote:
| I think Donatella Meadows made it quite clear a while back
| that fiddling with constants and coefficients doesn't really
| have an Effect with capital E.
| dang wrote:
| We detached this subthread from
| https://news.ycombinator.com/item?id=26090317.
| frongpik wrote:
| Cool. Now show us the Adtech Electricity Consumption Index and
| see if bitcoin would add up to even 1% of ads.
| snickms wrote:
| If the goal is to educate the public on the scale of power
| involved, a comparison with a commonly used service would help a
| lot IMHO. Something like 'Bitcoin consumes 14 times the energy of
| Google and half (according rough estimates) that of Youtube'
| would make things easier to grasp before hitting the reader with
| country comparisons.
|
| FWIW here is my list of 'if a service were a country':
|
| Google Guatemala
|
| Bitcoin Argentina
|
| Youtube South Africa (unreliable data)
|
| [Edit] whoops - no references
|
| https://www.google.com/search?q=what+is+the+total+power+cons...
|
| https://www.google.com/search?q=what+is+the+total+power+cons...
|
| https://en.wikipedia.org/wiki/List_of_countries_by_electrici...
| flush wrote:
| Thank you for such a high quality comment.
| riffraff wrote:
| I think the average person would find it easier to imagine the
| consumption of a country than that of a an internet service.
|
| Both are basically unintelligible, but at least the country one
| is something that one can _imagine_ from their experience, if
| wrongly (my house consumption:country consumption =
| 1:population).
|
| I bet few people on hackernews itself have any clue what the
| energy consumption of google might be, and have no way of
| relating to it.
| peter_retief wrote:
| I had a concept that used crop futures as a virtual currency,
| deforming a "cloth" with "root growth" to generate randomness.
| The money would go to finance food production and the currency
| would accrue an actual dividend once it reaches the market.
| ryanmarsh wrote:
| I do not understand the motivation behind the alarm of BTC mining
| energy utilization. In terms of pollution there are much easier
| targets with obvious net negatives for civilization. I'll give
| you one example, Teflon is a fantastic product but it does not
| need to coat every piece of cookware. PFOA's are likely in the
| blood of every American.
|
| What motivations must one have to not see freeing billions of
| humans from the control of central banks as something good for
| humanity? Could the energy consumption of bitcoin mining be
| merely an engineering problem or are we being asked to eschew
| bitcoin mining (an cryptocurrencies) for the oh-so energy
| efficient global financial system?
|
| Something smells...
| maxekman wrote:
| This is just ridiculous! I'm hoping for ETH with proof-of-stake
| to save the face of crypto soon.
| tekromancr wrote:
| Honestly, the only scheme I have seen that seems like a
| reasonable trade off of trustlessness and energy efficiency is
| DPoS.
| birracerveza wrote:
| This site is called Hacker News, and yet there is a surprising
| amount of resilience to accept the utility provided by Bitcoin
| and cryptocurrency, with the same old tirades that keep being
| repeated ever since Bitcoin was worth less than $1.
|
| The ecosystem has grown and has been finding real world
| applications. If you are still of the opinion that cryptocurrency
| is exclusive to buying drugs, laundering money and scamming
| people, you have a lot of catching up to do.
| louwrentius wrote:
| I am very interested in actual real-world applications. Because
| I'm following HN and I haven't seen any.
|
| Currently, it seems to me that Bitcoin is mostly an enabler for
| crypto-ransomware and other illegal stuff.
| durnygbur wrote:
| 15 years ago we had been leaving computers running in the
| background to download and share data over P2P networks, nowadays
| it's to mine cryptocurrencies. How sad.
| yrral wrote:
| This is a rehash of a previous post of mine regarding electricity
| consumption:
|
| Back in the days where all our electricity came from fossil
| fuels, I completely agree that marginal electricity usage was bad
| for the environment. However I think that thought has persisted
| with us even though it is no longer true 100% of the time. With
| renewables sometimes the marginal cost of electricity to our
| environment is near 0 or even negative (eg, during periods of
| higher winds and lower demand.)
|
| I predict that in the future as bitcoin mining becomes more and
| more of an efficiency game that you will see bitcoin mining be
| kind of a load balancer the grid, effectively turning off during
| peak demand (or low supply) times and contributing to the base
| load during regular times.
|
| For example, it may even help the economics of building new wind
| plants. Eg, currently it may not be profitable to build a new
| wind plant because base load is too low that the excess power
| generated would need to be sold off at 0 or even negative prices.
| However if bitcoin mining could be turned on during these times
| and off during periods of high demand, there will need to be
| fewer peaker plants in operation and it would positively affect
| the economics of opening a new wind plant.
|
| Bitcoin mining only cares about the cost of electricity at a
| given time, it is not like most other electricity demands that
| are very time based. With the large variance of electricity
| generation by renewables, I think bitcoin can in the future help
| smooth demand according to the real supply/demand curve.
|
| It's kind of like a different implementation of the Tesla utility
| grid batteries. Instead of deploying power, you force the grid to
| build more renewable capacity (that the miners are paying for)
| that you use except in peak periods, where you turn off and
| effectively provide the grid with more power.
|
| Edit: here is an article of a bitcoin mining company doing just
| that:
|
| https://www.bloomberg.com/news/articles/2020-09-01/bitcoin-m...
| https://www.forbes.com/sites/christopherhelman/2020/05/21/ho...
| knuthsat wrote:
| Using fossil fuels for electricity is very nice. Imagine all
| the forests that stayed intact in remote places of the world
| that just started burning oil.
| lxgr wrote:
| > Bitcoin mining only cares about the cost of electricity at a
| given time
|
| I think this is the fallacy in your argument:
|
| In the absence of a block reward, Bitcoin mining seems like a
| purely demand-driven activity. The demand is people wanting
| their transactions be confirmed on-chain, which seems entirely
| uncorrelated with electricity prices.
|
| On the other side, you have miners wanting to operate at
| marginal profit.
|
| Total mining expenses would therefore be driven to always
| exactly match the total monetary value of being able to
| transact. In other words, the demand for transaction
| confirmation drives the demand for mining, which in turn drives
| the demand for electricity.
|
| In a world in which the only electricity sources available are
| renewable, I'd agree that Bitcoin mining has no net impact on
| the environment. In any other world, some of that demand for
| electricity will be satisfied using fossil fuels, directly or
| indirectly.
| donutloop wrote:
| Nano coin is the answer
| eternauta3k wrote:
| Only turning on miners when electricity is cheap lowers your
| ROI.
| sneak wrote:
| I think that depends entirely on the delta between "cheap"
| and "normal" electricity.
| obviouspenguin wrote:
| I don't think this will work out for several reasons:
|
| 1) Peak power usage is when people are awake - this is when you
| want transactions to happen.
|
| 2) This wouldn't reduce the need of peak plants, since you
| aren't generating power when mining for bitcoin. How would
| increasing overall energy consumption require less energy
| generation? If renewables could ramp up/down quickly and not be
| dependent on external factors - that would remove the need for
| current peak plants - which is usually nat gas.
| gruez wrote:
| >1) Peak power usage is when people are awake - this is when
| you want transactions to happen.
|
| Mining is global, so this isn't an issue. It might be peak
| period in europe right now (2PM UTC) but not in asia or
| western US.
|
| >This wouldn't reduce the need of peak plants, since you
| aren't generating power when mining for bitcoin. How would
| increasing overall energy consumption require less energy
| generation?
|
| This is a big unknown, because the economics depends entirely
| on the cost of electricity vs the cost of equipment. If
| electricity cost dominates, then it'd make sense to shut down
| mining operations during periods of peak usage (because
| electricity prices are higher), but if equipment costs
| dominate then it'd make sense to mine 24/7.
| cecja wrote:
| England lost 80% oft their forest to industrialization before
| fossil fuel came up.
| tgv wrote:
| As long as we need coal or gas plants, bitcoin mining is a net
| negative for the environment. It also doesn't add anything of
| value and facilitates crime. If you want to push bitcoin to low
| demand hours via pricing, you're increasing the price for the
| rest of us. It's a lose-lose-lose situation for people.
| FabHK wrote:
| > bitcoin mining be kind of a load balancer
|
| Given that the difficulty adjusts only every 2 weeks, that
| means that the time to find a block will vary enormously during
| the day as the demand/supply imbalance varies. That'll make BTC
| even more annoying than it is already (it's currently peak
| electricity demand where most of the miners are sitting, so
| I'll have to wait 3 hours for my 6 confirms?).
|
| At any rate, you're basically saying that with renewable energy
| it's ok to waste energy, and I think we are not quite there
| yet.
| gruez wrote:
| >Given that the difficulty adjusts only every 2 weeks, that
| means that the time to find a block will vary enormously
| during the day as the demand/supply imbalance varies.
|
| Isn't this a non-issue because mining is global? Peak time in
| europe doesn't mean it's peak time in north america or east
| asia.
| FabHK wrote:
| Interesting question. If miners are approximately evenly
| distributed across timezones, it could be indeed the case,
| say, that those where demand is currently at its peak
| (following the sunlight) switch off their mining as
| electricity is expensive, and then switch back on as the
| sun leaves and electricity demand (and prices) fall.
|
| I had assumed that mining is concentrated more. Empirical
| question.
| SamBam wrote:
| I think that this is a great big stretch to try and justify
| BitCoin mining. I don't know if you personally own BitCoin, but
| I would say that this is a prime example of motivated
| reasoning.
|
| > or even negative
|
| I can see no way that consuming more energy can result in an
| improvement to the environment (unless that energy usage was
| directly related to improving the environment). There is
| absolutely no time where you can say "the more lights I leave
| on, the better the climate will be," no matter what your energy
| source is.
|
| In general the rest of your argument can be summed up as "if
| there is more demand for electricity, more utilities will build
| renewable plants." The problem with this argument is that there
| is already far more electricity being used than renewables can
| supply, so there is already all the incentive needed to build
| more plants.
|
| As for the present-day, a BitCoin mining rig consumes whatever
| proportion of fossils are inputs to that grid. If a grid is 50%
| renewable and 50% fossil, you can't pretend that you're
| consuming only the renewable portion. Indeed, the opposite may
| be true: renewables generally just produce their max output,
| the fossils can ramp up and down to meet higher demand. So it's
| best to think of the fossils as the ones that are rising to
| supply any "unnecessary" usage.
|
| > where you turn off and effectively provide the grid with more
| power
|
| This is again pretty striking motivated reasoning. Yes, if we
| turn off all non-essential lights during peak hours we are kind
| of "supplying the grid" with more energy, but if we build a
| huge energy-suck, and then occasionally turn it off, we don't
| get to pretend we are actually energy suppliers. If I set fire
| to $1000 of my company's money every day, I don't get to
| pretend I earned them $1000 on the days when I don't.
| paystaxes wrote:
| > I can see no way that consuming more energy can result in
| an improvement to the environment (unless that energy usage
| was directly related to improving the environment).
|
| Literally the entire point of the comment you are responding
| to was to outline how bitcoin mining can help support the
| economic viability of renewable energy projects like wind
| farms.
| SamBam wrote:
| And since we already use far more electricity than
| renewables generate, I dismissed this concern in my
| comment.
|
| I mean, if that were valid, wouldn't it be more
| environmental if we all just left the lights on 24 hours a
| day? Or turned on thousands of A/C units outdoors?
|
| It's like saying my burning $1000/day of my company's money
| incentives the company to earn more money, so it's actually
| a good thing.
| paystaxes wrote:
| I don't think you're understanding the point being made.
| It's not simply that bitcoin consumes energy, but about
| the economics of renewable energy infrastructure.
| Building a renewable project large enough to power an
| entire city during peak hours often does not make
| economic sense because of the large fluctuations in
| consumption. But, if you have a bitcoin mine that you can
| flip on to consume the excess energy during off hours,
| suddenly the economic viability is completely different.
| bhupy wrote:
| I think that this critique severely mischaracterizes the
| argument: we're not just talking about the merits of blindly
| consuming electricity ("leaving the lights on forever"),
| we're talking about what happens when you attach a financial
| incentive to consuming electricity structured in such a way
| that your net profit increases if you spend less on that
| energy.
|
| For Bitcoin miners, the input is energy, and the output is
| money. This means that there is now possibly an incentive to
| make available cheaper sources of energy, and right now that
| happens to be wind and solar (at least per kWh).
|
| It's worth litigating whether such an incentive actually
| exists, or if it does exist whether it will actually
| stimulate green energy development, or whether cheap energy
| is always going to be clean energy. These are interesting
| debates. But it's impossible to talk about Bitcoin as long as
| we mischaracterize the arguments.
| SamBam wrote:
| You have the supply-demand curve backwards. If there is
| more consumption of electricity, that raises the price, it
| doesn't make it cheaper. Of course the bitcoin miners would
| like to buy it cheaper. The power companies would like to
| make it more expensive. Economics dictates that their
| meeting point will be higher with more demand.
|
| You're describing it as if BitCoin miners have the ability
| to construct their own gigawatt power plant.
|
| But even if they did, the argument is still "If I use more
| electricity, and I/they create more green power plants to
| match my demand, the environment is better off."
|
| If I burn 100 TWh/yr of electricity, and they build a power
| plant for me that supplies 100 TWh/yr of green power, how,
| exactly, have I reduced the demand for fossil fuels? I'm
| burning all the new green energy that's being created!
| bhupy wrote:
| > If there is more consumption of electricity, that
| raises the price, it doesn't make it cheaper. Of course
| the bitcoin miners would like to buy it cheaper. The
| power companies would like to make it more expensive.
| Economics dictates that their meeting point will be
| higher with more demand.
|
| First of all, economics dictates that supply will catch
| up to meet the demand as long as the barrier to entry is
| low. You'd be right if there was a cartel in green energy
| -- but there's not. As long as supply is elastic, high
| prices are always transient.
|
| > You're describing it as if BitCoin miners have the
| ability to construct their own gigawatt power plant.
|
| No, I'm describing it as if BitCoin miners have the
| ability to set up ASICs powered by solar panels in the
| middle of a desert in Nevada. Somewhat high upfront cost,
| but effectively zero marginal cost of power. What's being
| stimulated here is the demand for accessible solar panels
| that can be quickly/cheaply installed.
|
| > If I burn 100 TWh/yr of electricity, and they build a
| power plant for me that supplies 100 TWh/yr of green
| power, how, exactly, have I reduced the demand for fossil
| fuels? I'm burning all the new green energy that's being
| created!
|
| But again, that presupposes that there's some fixed
| supply. Supply also changes, and it responds to demand.
| This is the core thesis behind Keynesian stimulus, and
| why inflation doesn't necessarily follow from stimulating
| demand.
|
| Now, baked into all of my points here is the assumption
| that the barrier to entry for new supply is low. It might
| not be! That's, I think, the more interesting question.
| The market conditions could also change making it easier
| and easier to spin up a solar farm, or spin up a wind-
| farm.
| SamBam wrote:
| > But again, that presupposes that there's some fixed
| supply.
|
| No, it doesn't! Exactly the opposite!
|
| Again: if a BitCoin miner generates 1 TWh/yr of their
| _own_ electricity, how does that reduce the burning of
| fossil fuels?
|
| Likewise, if power companies create more green power to
| supply the needs of BitCoin miners, how does that reduce
| the burning of fossil fuels? You're simply consuming
| whatever new green energy you're creating.
|
| So the whole "it will make power companies produce more
| green energy, and therefore it's good for the planet"
| argument falls flat.
| bhupy wrote:
| > No, it doesn't! Exactly the opposite!
|
| How?
|
| > Again: if a BitCoin miner generates 1 TWh/yr of their
| own electricity, how does that reduce the burning of
| fossil fuels?
|
| First of all, if a BitCoin miner can generate 1 TWh/year
| of their own electricity without burning fossil fuels,
| then the entire argument around Bitcoin electricity use
| is moot. Second of all, the only way a BitCoin miner can
| generate 1TWh/year of their own electricity is if they
| have access to the tools/infrastructure necessary to set
| up their own power generation -- and the demand for that
| tooling/infrastructure stimulates the development and
| promulgation of it.
|
| > Likewise, if power companies create more green power to
| supply the needs of BitCoin miners, how does that reduce
| the burning of fossil fuels? You're simply consuming
| whatever new green energy you're creating.
|
| Again, because if you dust off your "economics" argument,
| when demand increases, cost increases. Then when cost
| increases, as long as supply is elastic, it increases to
| meet the demand. The demand for green energy, today, is
| increasing at a natural/slow pace, but if you have a
| financialized industry that demands high volumes of it,
| you supercharge the development of infrastructure on the
| supply side -- enough that eventually the majority of
| electricity supply is green.
|
| > So the whole "it will make power companies produce more
| green energy, and therefore it's good for the planet"
| argument falls flat.
|
| You really haven't explained how. Your entire argument
| presupposes fixed supply. Maybe that's true, but you'll
| then have to make the case for _why_ the supply of green
| energy (or tooling /infrastructure) is fixed.
|
| As it stands, right now, there's a lot of money to be
| made selling solar panels. If industries mobilize to
| cheaply produce easy-to-deploy solar panels at scale,
| that is good for _everyone_.
| yrral wrote:
| > Again: if a BitCoin miner generates 1 TWh/yr of their
| own electricity, how does that reduce the burning of
| fossil fuels?
|
| Simple, during times where peaker plants need to run
| (because electricity demand is higher than supply), these
| miners can shut off, giving the grid more green power.
| Now these peaker plants (which generally burn
| coal/natural gas) don't need to exist or run anymore.
| nacho2sweet wrote:
| All the people defending BTC because they a vested interest is
| hilarious. Ahhhh yes lets develop clean energy solutions to mine
| it before solving all the actual other clean power needs in the
| world.
| timwaagh wrote:
| At some point these transaction costs would effectively make
| further gains impossible.
| yalogin wrote:
| Why do they have to mine bitcoins at this point? There are enough
| in the market just transact and trade with them.
| sparkie wrote:
| Mining is the process by which new blocks of transactions get
| added to the ledger. There are no transactions if nobody is
| mining.
|
| When a miner mines a block, they are rewarded with the sum of
| all fees paid by transactions in the block, plus a subsidy,
| which is 50 >> height/210000. The subsidy is the process by
| which the available bitcoin supply is released into the market
| - a predictable rate which cannot be accelerated. Miners can
| chose to NOT claim the subsidy if they want, but would be doing
| so at their own loss.
| jpxw wrote:
| I'm no expert, but https://nano.org/ seems to solve this quite
| nicely.
| klntsky wrote:
| Why don't we care about how dynamic typing contributes to global
| energy consumption? Runtime overhead for preserving type info in
| memory (on large quantity of machines) is probably comparable to
| crypto mining (which is performed on very few machines in
| comparison).
| zachrip wrote:
| btc considered harmful
| ninesigns wrote:
| It's worth noting that current bitcoin capitalization ($600B) is
| also more than Argentina GDP ($445B), so it can be said that
| bitcoin users constitute a rather significant (bit)nation on this
| planet.
| divs1210 wrote:
| How much electricity does the world monetary system use?
| wruza wrote:
| Time to add another thing to Drake equation: Fb - the fraction of
| civilizations who didn't fall prey for proof of work consensus.
| Others are invisible, cause they are very advanced, but all they
| do is mining crypto for food. To eat a sandwich you have to prove
| that it's yours and a consensus is that it costs few MWh. Small
| islands of non-crypto trust appear millenia by millenia, but they
| are slowly marked as communism and disbanded by military
| consensus. It would be much faster, if military smart contract
| balance legacy didn't require a petawatt-hour to sign one
| resolution with all conditionals, involving century-long testing
| of its code. Thankfully these groups do not form too often,
| because when you're born, there is already a set of smart
| contracts that your ggggg-parent signed for your kin to obey.
| Maybe your ggg-children will have a chance with other families,
| if they manage to meet in the same aeon.
| sharpneli wrote:
| At that rate and assuming 4tx per second a single Bitcoin
| transaction consumes 165kWh. A Tesla battery is bit over 50kWh.
| So let's round that to 3 full charges of Tesla battery.
|
| That's 350km/220 miles of range per charge. In total 1050km or
| 660 miles of driving.
|
| So basically if you want to transfer money and the recipient is
| closer than 660 miles from you it's more efficient to just get a
| bunch of bills, drive there with a Tesla rather than send a
| Bitcoin transaction. Or alternatively 330 miles roundtrip. For
| each single transaction.
|
| It is hilariously inefficient system. It is literally better to
| drive a full car and give things physically than use Bitcoin.
|
| A small addenum: Visa apparently uses 146kWh for 100000
| transactions. Coming at 1.46wH per transaction. That can drive a
| Tesla for 9 meters (0.4 seconds of driving at 80km/h) or
| alternatively keep a nice led lamp lit for an hour. And that
| includes everything the company does, not just the actual
| transaction but the upkeep of their offices etc divided by the
| amount of transactions they perform per year.
|
| EDIT:
|
| Apparently on 2020 it was 741kWh per transaction in practice
| and/or I made a tiny error in my calculation. Either way it's
| even better!
|
| https://www.statista.com/statistics/881541/bitcoin-energy-co...
|
| That simply increases the ranges so that it becomes a 3600 mile
| trip. Or 1800 mile roundtrip.
| pawsed wrote:
| This isn't exactly an rebuttal to your argument, but 74% of
| energy that Bitcoin used to power it's network was renewable
| energy [1], that's more than you can say for most countries.
| While the network itself is inefficient, I think the philosophy
| of "why bitcoin", is always amiss in these arguments.
| Everything can be made more efficient.
|
| Edit: 39% of energy used is renewable, not really sure how that
| doesn't matter.
|
| [1] https://www.finextra.com/newsarticle/36672/renewable-
| energy-....
| rcxdude wrote:
| That article actually states the opposite: 74% of miners use
| some renewable energy. Only 39% of energy used comes from
| renewable sources, and most of it is hydroelectric, which is
| limited so miners demand for it is likely crowding out other
| users from it. The remainder mostly consists of coal and
| natural gas (there's a popular idea that miners use or can
| use the excess energy usage which occasionally comes from
| wind or solar, but the cost of the hardware they use prevents
| it: they will run the hardware 100% of the time to pay for
| it, so they represent a strong base load on the system, not a
| convenient energy sink for excess renewable generation).
| xirbeosbwo1234 wrote:
| Doesn't matter, really. Bitcoin is secured by waste. Maybe
| the money is burned in coal-fired power plants, maybe it's
| burned buying "mining" equipment, maybe it's burned building
| wind turbines. All of those things are polluting and all of
| them use manpower and natural resources.
|
| If Bitcoin transitions to 100% renewable energy, then it will
| just use more of it to achieve the same amount of money-
| burning. The economics stay the same.
| newswasboring wrote:
| Read two paragraphs below what in your own link.
|
| >However, the CCAF's report specifies that the 76% refers to
| the share of hashers who use renewable energy at any point.
| It estimates that only 39% of hashing's total energy
| consumption comes from renewables.
|
| > Behind hydroelectricity, coal (38%) and natural gas (36%)
| are the energy sources hashers favour most.
| fastball wrote:
| Yes, but only because electricity from those sources is
| cheaper. Green up the grid (pls nuclear) and no problems.
| newswasboring wrote:
| Bitcoin people keep trying to score points and if they
| can't they move the goal post. You tried to get the green
| energy point but when you can't get it its like "yeah...
| duh nobody else can either". The what are you good for
| and why do people constantly bring up this false stat.
| pawsed wrote:
| Not moving any goal posts here, I just meant to say that
| some part of the energy usage is renewable, and we as
| mankind have been moving towards more energy consumption
| each year anyway. In the coming years, we'll start using
| more renewable energy.
|
| As far as the question what are you good for is
| concerned, we've been printing money at an alarming rate
| ever since 2008 crisis, if the new stimulus is passed,
| the us will have printed 40% of all dollars in existence
| in the past year alone, I don't know how you think that
| won't cause inflation/it's acceptable that the cost of
| printing is borne by other countries because the us
| dollar is the international reserve currency. Bitcoin has
| been adopting a store of value narrative and is
| synonymous with digital gold at this point, so in effect
| a hedge against inflation.
|
| Two, I'm not sure if you relate with it or not, but maybe
| we just believe in decentralization of financial
| institutions just a little bit more than you do, everyone
| who got burned because of banks in the past decade has
| developed a deep distrust of the modern financial system.
| kerng wrote:
| I think your analysis shows how valuable (literally) Bitcoin
| actually is.
| frongpik wrote:
| Are you saying that if I send you $100 worth of bitcoins, the
| network would spend 700 kWh? I find that hard to believe.
| xorcist wrote:
| Not really. The network spends those kWh whether you send
| your transaction or not.
|
| It's also worth to note that nobody really knows how many kW
| miners really burn. All the figures are more or less educated
| guesses from the efficiency of equipment sold publicly. If
| someone has a more efficient method they probably won't share
| it.
|
| But nobody accused Bitcoin of being efficient, ever. That's
| what almost everyone notices when reading about it first
| time.
| aakilfernandes wrote:
| Analyses like this just take the energy cost of each block of
| transactions and divide it by the amount of transactions in
| the block. If the number of transactions in a block doubles,
| the average energy cost per transaction is halved.
|
| Another way of stating it is "the marginal energy usage of a
| bitcoin transaction is essentially 0".
| MereInterest wrote:
| Except that there is a maximum number of transactions per
| block. Across the entire network, by design, there can
| never be more than 5 transactions per second. This is
| stupidly small. If people received their biweekly paychecks
| in bitcoin, only 6 million people could be paid without
| going over that transaction limit, assuming that absolutely
| nothing else is done using bitcoin.
|
| The marginal energy usage being zero is another way of
| saying that Bitcoin wastes the tremendous amount of energy
| that it does even if nobody is using it at the time.
| rcxdude wrote:
| Yes, but the number of transactions in 'bitcoin' as it's
| currently defined is severely limited (blocks are already
| full at a $15 per transaction cost). Conceptually, making
| something which increases the transaction count involves
| forking bitcoin, and a fork which aimed to do exactly that
| was denounced heavily by the community and rejected by the
| markets. The marginal cost may be small but the cost per
| transaction is high, by design, and by design which has
| extremely heavy resistance to even small and simple
| changes.
| UncleMeat wrote:
| But the number of transactions in a block is fixed.
|
| We went through this with BTC/BCH. The BTC folks did not
| want to increase block size.
| moonbug wrote:
| ...and yet it is so.
|
| Total energy required to mine one block / # transactions per
| block.
| MereInterest wrote:
| That is exactly correct. Bitcoin's inefficiency is
| tremendous, its throughput minimal, and by design it cannot
| scale.
| frongpik wrote:
| How did bitcoin network transacted $90 billions just
| yesterday? By spending more energy than the entire world
| has ever produced?
| MereInterest wrote:
| The cost is per transaction, not per amount transferred.
| A small transaction takes just as much space in the
| ledger as a large transaction.
|
| A fun thought experiment is to see just how limited the
| throughput of Bitcoin is. Suppose the Bitcoin enthusiasts
| were to get their wish and Bitcoin becomes the dominant
| "currency". If every person on the planet were to make a
| bitcoin transaction once if their lifetime, that alone
| would be too many transactions/second for the network to
| handle.
| frongpik wrote:
| Sounds like a single bitcoin transaction is like
| transferring a few billion dollars at a time.
| MereInterest wrote:
| Pretty much. It is only useful in cases where you are
| making very large transactions. At that point, you have
| few enough actors that setting up a trusted network is
| far, far cheaper and more flexible. The trustless nature
| of Bitcoin is what makes it unscalable.
| martinko wrote:
| Its not correct. The network spends this energy either
| ways, and it not only allows transactions to happen but
| it is integral to securing funds that are not moving.
| Dividing the energy consumption by number of transactions
| is therefore nonsense.
| Darmody wrote:
| The power usage is the same if you transfer $100 worth of
| BTC or $100 billion.
| frongpik wrote:
| What happens if a few millions people send 5 bucks worth
| of bitcoin? A global power outage?
| MereInterest wrote:
| Depends on the transaction fees associated with those
| transfers. If those millions of people also post higher-
| than-average transaction fees, then the Bitcoin network
| prioritizes those payments, and cannot process any other
| transfers.
| Darmody wrote:
| They would have to wait a lot. Also a fee is almost $20
| now. So they would make a bad and slow deal.
| frongpik wrote:
| That seems like a natural rate limiter that would prevent
| wasting any meaningful amount of energy on bitcoin.
| imtringued wrote:
| That transaction fee will be used to run more miners and
| thus increase the energy usage.
| sharpneli wrote:
| Bitcoin transaction value has nothing to do with it's
| energy consumption. So moving a cent or a million both
| cost the same.
| raziel2701 wrote:
| This is amazing and absolutely crazy! Thanks for the analysis.
| It's still not going to convince the cultists that are hodling
| it unfortunately.
| jude- wrote:
| Bitcoin transactions take negligible amounts of electricity to
| produce and validate. The fact that you can spin up a Bitcoin
| node on a Raspberry Pi is trivial proof of this.
|
| Block production, on the other hand, takes as much energy as
| the market will bear.
| minsc__and__boo wrote:
| Bitcoin transactions are worthless unless put into blocks,
| and blocks have a cap for transactions.
| jude- wrote:
| The parent was talking about the cost per transaction being
| high. In reality, that number is basically 0.
|
| The entire cost of Bitcoin mining is in block production,
| no matter how many or few transactions there are. If you're
| going to get mad about the energy use, at least direct it
| towards the right target.
| [deleted]
| jiveturkey wrote:
| You didn't include the production cost (energy input) to make
| the paper bills. I can only assume it's negligible but perhaps
| that should be stated.
|
| The maintenance cost of the Tesla, however, is not neglibible.
| 660 miles will have measurable/accountable tire wear.
|
| Most importantly, you didn't account for the utility value of
| the power. Teslas are charged with power that would otherwise
| be saved, and would not produce CO2, etc. Whereas my
| understanding is that BTC are mostly mined with excess power
| that would just go to waste if not used, eg "surplus" hydro
| generation. Of course that's not completely the case, but any
| analysis must be "full lifecycle" to hold any water.
| nulbyte wrote:
| > That simply increases the ranges so that it becomes a 3600
| mile trip. Or 1800 mile roundtrip.
|
| It would still be 3600 miles round trip. A round trip is just a
| two-way trip; the driving distance is still the same.
| nostrademons wrote:
| Say you want to transfer a billion dollars 3000 miles. A
| billion dollars is 10 million Benjamins, which weighs 10 tons.
| You're not fitting that in a Tesla. More likely, you'll put it
| in an armored car and hire a few armed guards to go along with
| it. If you need to transport it overseas, you need a freighter
| (and a week) too. Now the energy cost of that Bitcoin
| transaction doesn't seem so bad.
|
| The institutional interest in Bitcoin I've seen lately seems to
| assume a thesis of dollar depreciation and Bitcoin usurping its
| role as the global reserve currency. Ordinary people are not
| going to transact in Bitcoin under this thesis: they'll use
| dollars, pounds, deutchmarks, lira, yuan, etc. for their
| ordinary domestic transactions. Only banks, importers, and
| other major financial institutions need to convert the local
| currency into Bitcoin and settle up on the international
| markets, and these transactions will be in the tens-of-
| billions. Most of Bitcoin's drawbacks go away with this use-
| case - it doesn't matter that the network is limited to 4 TPS
| when only ~hundreds of transactions are conducted daily, and
| the energy use per transaction is similarly minimized.
| Bitcoin's advantages in trustlessness and lack of a central
| authority are hugely important in international relations,
| where nobody trusts anybody else and there's no higher
| authority to appeal to.
|
| (Stellar's even better for this use-case, and has had a similar
| recent run-up, but currencies have strong network effects and
| it's unlikely that Stellar could get the name recognition or
| trust that Bitcoin has gotten.)
| EastSmith wrote:
| I can see smaller bitcoin transactions running on an
| alternative networks like Stellar, where assets (like
| bitcoin, USD, etc) can be issued by a trusted 3rd party.
| jostmey wrote:
| So what? Almost all transactions are going to be
| significantly smaller than a billion people usd. You are just
| focusing on an edge case. Bitcoin is a horrible system for
| conducting the vast majority of transactions.
| volgar1x wrote:
| Deutsche Marks do not exist anymore.
| nostrademons wrote:
| Many of the same people who buy the Bitcoin-as-global-
| reserve-currency scenario also believe the Euro is going to
| collapse. It has known problems as a monetary union without
| a fiscal union, which lead to periodic bailout crises.
|
| Here "deutsche mark" (and lira, which is another dead
| currency) are stand-ins for whatever national currency
| emerges after a Euro collapse. It may not be called that,
| but the point is that there will be some German national
| currency that settles up into Bitcoin in the international
| markets.
| nevi-me wrote:
| > The institutional interest in Bitcoin I've seen lately
| seems to assume a thesis of dollar depreciation and Bitcoin
| usurping its role as the global reserve currency.
|
| Aren't we losing the assumed federation in this system? A
| country whose banking system is under strain (Nigeria) or has
| collapsed (Zimbabwe) will have a bad-faith government acting
| to constrain the free-flow of money (because they want a
| transaction-fee cut).
|
| Wouldn't that still lead to me wanting to go buy my groceries
| with BTC? Do we create a localised version/model where people
| can transact with each other without touching the blockchain
| (because of the low throughput), or how do we address this
| use-case; as it seems to be the most attractive one?
|
| Has the energy requirement peaked, or is it still going to
| increase? Linearly or not?
| nostrademons wrote:
| It'd have a similar role as gold. In cases state failure,
| you absolutely do have people trying to buy groceries with
| gold coins. But it's inconvenient, and people tend to run
| out of gold coins. So the incentives - when times are good
| - run toward normal credit systems like Visa & Mastercard,
| and hard currencies gain adoption only when times are bad.
|
| Similarly, we've had folks transacting personally with
| Bitcoin in Venezuela and Zimbabwe. It tends to work out
| fairly well for them - at least their money holds value.
| But transaction costs in Bitcoin during the 2017 bubble
| were about $20/transaction, which makes it a pretty high-
| friction experience for groceries. There's a lot of market
| pressure to create other solutions (Lightning Network?
| Stellar? Local fintech companies?) for payments when
| Bitcoin costs $20 for everything.
| Sleepytime wrote:
| >Do we create a localised version/model where people can
| transact with each other without touching the blockchain
|
| This is what the lightning network is for: scalable,
| instant, low-cost, and off-chain TXs. All transactions
| between the opening and closing of a payment channel are
| consolidated into two TXs. One to open it another to close
| it. This means energy cost per TX goes down pretty
| significantly with adoption.
| dpweb wrote:
| The problem w Bitcoin as a global reserve currency is that it
| cannot be manipulated by the nation-state. Manipulation in
| this case is not a bad thing it is actually a safety feature
| for society against pure supply/demand dynamics. The
| prevailing wisdom is that having a fiat currency which value
| and velocity can be manipulated by, granted the Fed Reserve
| is a quasi govt agency, in times of emergency helps preserve
| the social order and smooth fluctuations. So Bitcoin has no
| value as a reserve currency unless it could be manipulated by
| the state, which it can't, so it won't.
| Green_man wrote:
| I'm not very well informed on the modern banking system, but
| I remember hearing an anecdote about banks flying people with
| bags of checks on airplanes to handle exchanges (before the
| system was updated in the 70s iirc). In your example of
| transferring a billion dollars in cash 3000 miles, couldn't
| that transfer be done using the banking system for much
| cheaper than the armored car and guards? Is the metaphor
| valid only for transactions that don't want to trust some
| third party? Is there some reason why moving a billion
| dollars cash is something that anyone other than the CIA
| would want to do? I'm also curious about your claim:
|
| > Bitcoin's advantages in trustlessness and lack of a central
| authority are hugely important in international relations,
| where nobody trusts anybody else and there's no higher
| authority to appeal to.
|
| Is this really true? I mean, what do large international
| exchanges use now? A majority of them certainly don't
| currently use bitcoin. Many large banks have a significant
| international presence, and most parties interested in
| exchanging can find a bank they both trust.
| nostrademons wrote:
| We've got plenty of mechanisms (SWIFT, ACH, wire transfers)
| that work pretty well for large electronic inter-bank
| transfers _within the same monetary authority_. The trouble
| is what happens when you want to trade between currencies.
|
| Say that I want to buy a DJI drone, which is made in China.
| The workers who made the drone all get paid in yuan. I get
| paid in dollars. I want to spend my dollars on Amazon,
| receive a drone, and have those dollars automagically
| converted into yuan to pay DJI. Behind the scenes, Amazon
| takes my orders and my dollars, and has a contract with DJI
| to send them a certain number of yuan. Similarly, behind
| the scenes DJI is spending yuan to buy ads on Google.cn
| (hypothetically), which Google then wants to turn into
| dollars so it can pay my salary. Both Amazon and Google
| have relationships with banking institutions, so they say
| "I need to convert $X of dollars in CNY=0.15X of yuan".
|
| The banks net out all the purchases made by Americans with
| the purchases made by Chinese, and then they need to trade
| on the currency exchange markets for any shortfall. On the
| national level, the shortfall is called the current account
| deficit, which has been persistently growing since 1991:
|
| https://www.economicshelp.org/blog/483/economics/why-us-
| curr...
|
| That article lists a lot of hypotheses for why the current
| account deficit has been growing for the last 30 years, but
| the primary one relevant to this thread is the dollar's
| status as the world reserve currency. This means a few
| things:
|
| 1) Historically, since WW2, the U.S. has been the most
| economically stable nation in the world, and so holding
| U.S. government debt is the most stable place you can park
| any excess savings that you get from a current account
| surplus.
|
| 2) Because of this stability, a lot of trade in _other_
| currency markets is denominated in dollars. Rather than
| trade directly between Iranian rial and Chinese yuan, Iran
| takes the dollars they receive for oil, pays China for
| infrastructure improvements with them, and then China
| converts the dollars into yuan to pay their employees. (In
| practice it 's a bit more complicated because since 2015
| China has been doing their best to reduce their dollar
| holdings, so now China might pay Caterpillar or Bechtel to
| build a road in Zimbabwe, with a contract that lets China
| take over the road if Zimbabwe defaults on the loan that
| funds it.)
|
| 3) Oil is priced in dollars, meaning that most countries on
| earth need to buy excess dollars in order to afford a
| fundamental energy source.
|
| The dollar's status as a reserve currency means that the
| U.S. can get away with certain things that would cause
| other countries to default. For example, take the recent
| $6T COVID stimulus. Who's paying for that? It's literally
| holders of U.S. treasuries: all the countries that have
| sold more to the U.S. than they've bought and parked the
| excess in treasury bond purchases. They're not exactly
| happy about that, but the U.S. controls the world supply of
| both dollars and of U.S. government debt, so if you own
| either of those, you are at the mercy of the U.S.
| government's decision to print more.
|
| This is where the trustless aspect of Bitcoin comes in. You
| _know_ that the supply of Bitcoin is fixed. If you settled
| up your current account deficit in Bitcoin instead of
| dollars, you know that you 'll have an asset that you can
| trade back at a later date, and that the supply of that
| asset will not have increased (devaluing your own
| holdings). This makes it very appealing to other
| governments who are sick of bankrolling Americans'
| propensity to consume more than they produce. It's
| potentially bad for Americans (though the effect of this is
| complex: it might actually bring manufacturing back to the
| U.S at the expense of the financial industry, because a
| major reason U.S. manufacturing is non-competitive is
| because the dollar is overvalued, which is because the
| dollar is the world's reserve currency), but it's good for
| foreign countries with a trade surplus, and for holders of
| Bitcoin.
| Green_man wrote:
| This is very helpful, thanks. I guess the part I'm still
| confused on is the link to bitcoin:
|
| >You know that the supply of Bitcoin is fixed. If you
| settled up your current account deficit in Bitcoin
| instead of dollars, you know that you'll have an asset
| that you can trade back at a later date, and that the
| supply of that asset will not have increased (devaluing
| your own holdings).
|
| Doesn't the historic price volatility of bitcoin make it
| a very poor solution for these problems? Despite the
| supply being semi-fixed (for now), the value in USD or
| Yuan or whatever is the furthest thing from fixed. It's
| gained more than 8% in the last five days, and lost ~4%
| today alone. I guess if these were all very short term
| conversions USD --> BTC --> Yuan and vice versa, then
| maybe price volatility would burn users less often, but
| they'd still get burned eventually. In my mind, Bitcoin
| has inherent risk (in volatile pricing), and
| transactional cost (measured in either time or fees, as I
| understand it). As long as the (risk + fees) of BTC are
| greater than the fees charged by banks for money
| conversions, I don't expect widespread adoption.
| nostrademons wrote:
| It's important to make a distinction between price
| volatility _now_ , when Bitcoin is a speculative asset
| that _might_ become useful in the future, vs. the price
| volatility if it actually _does_ become useful. They have
| different dynamics.
|
| Imagine that AMC launches a promotion where they announce
| that once COVID is over and theaters reopen, you will be
| able to exchange acorns for movie tickets. You'd expect a
| mad scramble for acorns, because a useless nut will
| suddenly become tradable for something of value to many
| people. When all the acorns have been snatched up, you'd
| expect a trade to commence in acorns themselves, with
| people paying for them on the expectation that they're
| convertible to tickets worth something in the future.
| Moreover, AMC didn't announce a _price_ for this
| conversion, so there 's a lot of uncertainty about what
| acorns are actually worth. If AMC then says "Oh, by the
| way, acorns will be the _only_ way you can pay for movie
| tickets in the future, and we won 't accept dollars",
| then you might see acorns bid up to totally brain-dead
| levels, because there's no ceiling for how high it might
| go, and you know that you _won 't_ be able to go to the
| movies with dollars anymore. Only when theaters actually
| reopen, and you find out how many people have acorns and
| how many people want to see movies, can you put an
| accurate price on them.
|
| This is analogous to the scenario where the dollar loses
| its reserve currency status. You don't know what the
| eventual valuation of each country's local currency will
| be against Bitcoin. You do know that the dollar is going
| to be worth less. So you can get wild price swings as
| people FOMO into Bitcoin but have no accurate data to
| base their purchase price on.
|
| Once a switchover does occur, then yes, the price of
| Bitcoin will still be volatile. But this volatility is
| the point! The idea is for each country's local currency
| to float up or down until it equalizes the demand for the
| country's imports & exports. So if American manufacturing
| is uncompetitive, few people will desire American goods,
| which means there will be little demand for dollars
| relative to Bitcoin, which means that the price of the
| dollar relative to Bitcoin will fall. Falling dollar
| prices mean that foreign countries can get more American
| goods for a given amount of Bitcoin, which raises the
| price-competitiveness of American exports, which raises
| the demand for dollars. Eventually you end up with
| equilibrium prices that reflect the overall
| competitiveness of the country's economy within the
| global economy. As a country produces more & higher value
| goods, the value of their currency relative to Bitcoin
| will rise, and they can afford to consume more. As a
| country's industry declines, the value of its currency
| will decline as well, which makes its product attractive
| as a low-cost alternative.
| onlyrealcuzzo wrote:
| What percentage of transactions are 1 billion dollars? I'm
| pretty sure VISA has never had anything over $10M.
|
| This is excessively hypothetical.
|
| The more obvious benefit is that a Tesla can't drive 3000
| miles in 15 minutes. But a VISA transaction is faster and
| uses 1/100,000th the electricity. And neither are
| "anonymous".
| [deleted]
| perseusprime11 wrote:
| Correct. Ultimately, we will end up using Bitcoin as an asset
| and less for transactions. It is a better version of Gold.
| Nition wrote:
| This is like arguing that station wagons full of tape drives
| could one day replace the Internet.
| willmadden wrote:
| The 4 transactions per second is an artificial cap that is not
| associated with the power consumption of Bitcoin. The answer
| was, and is, to increase the maximum block size parameter,
| preferably making it dynamic.
| ad31mar wrote:
| https://www.coindesk.com/what-bloomberg-gets-wrong-about-bit...
| rattlesnakedave wrote:
| You are leaving out significant amounts of energy consumed in
| the legacy financial system.
|
| Those bills cost energy to produce. The bank had to be built.
| There was a teller there, did they spend any energy driving to
| the bank that day? Did you use a duffel bag? Where'd that come
| from? Etc.
|
| I'm not sure that any of this is meaningful in any way.
| anigbrowl wrote:
| _Those bills cost energy to produce. The bank had to be
| built. There was a teller there, did they spend any energy
| driving to the bank that day? Did you use a duffel bag?
| Where'd that come from? Etc._
|
| Just like the mining rigs that produce bitcoin. It seems like
| you're conflating fixed costs (of plant and machinery) with
| marginal costs (of exchanging some amount of BTC vs fiat).
| UncleMeat wrote:
| How many people go speak to a bank teller to transfer funds?
| My bank can give me a mortgage for my home. The banking
| system is doing way way way more than counting how much
| people own and shifting that around.
|
| If the concern is the cost of brick and mortar banks then we
| can solve that with technology much more effectively than
| btc.
| bingbong70 wrote:
| The problem with "interventionistas" with little/no
| understanding of bitcoin is, they look at one
| feature/component of btc's game theory in isolation and
| state "I can do this particular thing
| cheaper/faster/easier" while ignoring the 100 other aligned
| incentive structures that are lost with their 2nd/3rd-
| order-effect altering solutions.
|
| Bitcoin is too elegantly designed to approach in this
| fashion.
| sharpneli wrote:
| The Visa kWh figure includes all that. The office workers and
| whatnot. The source is Visa corporate responsibility data.
| https://usa.visa.com/dam/VCOM/download/corporate-
| responsibil... that's for 2019.
|
| They include air travel and whatnot. Basically the whole
| energy consumption of the company. Also including building
| stuff etc.
|
| Visa doesn't share that in order to poke at Bitcoin. They
| share that because enviromentalism is hip nowadays. So they
| want to tell how they're improving their CO2 emissions as a
| company.
| francoi8 wrote:
| Back of the envelope calculations for the yearly operation
| of:
|
| - Visa: 7 million GJ
|
| - Bitcoin: 403 million GJ
| [deleted]
| oblio wrote:
| And I imagine Bitcoin is growing much faster than Visa.
| yunesj wrote:
| If you compare the money (resources) spent bitcoin mining and
| the money (resources) spent operating the world's central
| banks, then the costs are similar.
| notahacker wrote:
| The world's central banks do not use more electricity than
| Argentina, and they handle a _lot_ more money.
| bingbong70 wrote:
| How well does that "money" hold its value?
| notahacker wrote:
| Money is intended to transact with, not for speculation
| on it increasing purchasing power, which is great,
| because it can be spent on or invested in things which
| _create_ value instead. And at a rate of more than 10
| transactions per second worldwide!
| bingbong70 wrote:
| You are confusing "currency" with "money", there is a
| difference and it is not insignificant.
| notahacker wrote:
| Someone should tell all the people who've studied
| numismatics for their entire life! Even the etymology of
| the word "money" derives from the location of the mint in
| Rome.
| bingbong70 wrote:
| Before the fiat system, national currencies could have
| been considered closer to "money" because they were
| actually backed by commodities.
|
| Now we have pure currency and all fiat currencies go to
| ~0 in less than 100 years.
|
| USD, GBP, CAD = currency
|
| Bitcoin, Gold, Silver = money
| notahacker wrote:
| You'll forgive me for sticking with the definition of
| money used by all academic experts in the field and the
| vast majority of colloquial use...
|
| Incidentally, Bitcoin is also not a commodity in the
| general sense of the word (as opposed to the _CFTC thinks
| it should regulate it like other exotic financial
| instruments_ sense of the word)
| bingbong70 wrote:
| Sure, just one change... " _Currency_ is intended to
| transact with, not for speculation..."
|
| Bitcoin is forcing an expansion of the definition of
| money. A self-regulated financial network backed by
| tremendous amounts of hardware and electricity is
| "advanced money".
|
| We are at a transition point so I don't expect good
| labeling/categorization from the
| shortsighted/incumbents/fiat-boomers (directed at the
| gatekeepers, not you personally).
|
| Side note: What people complaining about electricity
| consumption don't get is, BTC transfers the
| uncounterfeitable properties of energy to a money.
| notahacker wrote:
| Sorry, the English language is consensus based, and so
| you don't get to torture it into redefining money as
| "digital tulip bulbs" or condescendingly dismiss people
| using the term _correctly_ until you can mount a 51%
| attack. :)
|
| Side note: what people don't get is that pretending
| tokens have more exchange value because more energy was
| expended than the printing of other tokens is just sunk
| cost fallacy.
| yunesj wrote:
| No, but their budgets are on the order of the annual btc
| mining rewards.
| lr4444lr wrote:
| Then you might as well price in the cost of the computers and
| GPUs assembly into Bitcoin's cost. I don't see the utility in
| going down this chain of production.
| slg wrote:
| Which is also true on the opposite side or did your mining
| rig magically materialize out of nowhere? The difference is
| that a lot of the infrastructure for the traditional system
| is already built out which reduces the marginal energy costs
| to a degree that isn't the case for cryptocurrencies.
| newswasboring wrote:
| The mining equipment needed to be produced. The mining rig
| needed to be installed, many factories needed to be produced.
| There are workers in these mines, did they spend energy
| driving a car? Did they use a gym bag? Where did that come
| from?
|
| BTC is not magic dude, it has externalities too.
| choward wrote:
| This "legacy financial system" comparison isn't fair. I use
| standard banking and haven't been to a bank in years. I think
| a more reasonable comparison is with online only banks. Our
| current system doesn't actually need physical cash. You just
| need banks keeping score for individual accounts and a
| central bank keeping score of the banks' accounts.
| ketamine__ wrote:
| The team that works on it isn't interested in making any
| upgrades. It's pure religion at this point.
|
| They would argue that a chunk of the energy is renewable -- so
| that makes it better.
| rawtxapp wrote:
| That is not true, when you have billions of dollars at stake
| you need to be a lot more careful with the changes you're
| going to implement, otherwise, it would jeopardize the whole
| network.
|
| There are many upgrades that have and are happening, some
| examples: segwit, schnorr/taproot, lightning network, etc.
| ketamine__ wrote:
| And the outcome has been exactly what in terms of TPS?
| rawtxapp wrote:
| 1) TPS isn't the only thing that matters, 2) TPS on L2
| such as lightning is both extremely fast and very cheap.
| Ethereum is also going to have an L2 because it makes a
| lot of sense.
| ketamine__ wrote:
| > 1) TPS isn't the only thing that matters,
|
| It's pretty important for adoption to happen. Right now
| most Ethereum apps with complex contracts (i.e. Augur,
| Synthetix) can cost $50+ per transaction.
|
| > 2) TPS on L2 such as lightning is both extremely fast
| and very cheap.
|
| That's only true if there isn't high demand. If there is
| opening a channel costs $15 or more.
|
| > Ethereum is also going to have an L2 because it makes a
| lot of sense.
|
| Something which has been discussed since 2017. The
| architecture still isn't there. Most apps have to
| interact on the main chain. Not confident it is going to
| happen anytime soon even with startups like Matic.
| beckingz wrote:
| With a fancy tesla it might even be faster.
| [deleted]
| Taek wrote:
| The energy that goes into a Bitcoin transaction doesn't just
| pay for the one transaction. It also pays for the security of
| all the value stored in the rest of the system, and that's
| actually where most of the revenue for mining comes from -
| inflation, not fees.
|
| But also, Bitcoin transactions aren't typically buying coffee
| from your local store. It's very often international, and
| Bitcoin transactions offer a finality and immediateness that
| can't be found in other financial systems.
|
| But also, in many cases Bitcoin is your only choice to transact
| at all. Our business keeps getting rejected by payment
| processors such as Stripe and PayPal, and at this point Bitcoin
| is our only option to get revenue from Europe. As a result,
| Bitcoin is making things possible for us and our users that
| simply aren't possible at all without Bitcoin.
|
| If you think the fees are absurd, make a system that gives all
| the same benefits to us without costing so much. So far, we
| don't have an alternative, and we are very grateful that
| Bitcoin exists as an option.
| xur17 wrote:
| > The energy that goes into a Bitcoin transaction doesn't
| just pay for the one transaction.
|
| No energy "goes into a Bitcoin transaction". A block with 0
| transactions and a block with 100 transactions will both take
| the same amount of energy to generate.
| totheloop wrote:
| You mean deflation, incidentally.
| rspeele wrote:
| No, I do think he means inflation. He's talking about the
| block reward, the Bitcoin "minted" through mining, being
| larger than the fees. Currently it's 6.25 BTC minted per
| block and the fees only add up to between 1 and 2 BTC.
|
| We don't really see this as inflation because of the value
| of Bitcoin going up, but it _is_ a tiny tiny tax on all the
| people HODLING their coins, as it dilutes the value (again,
| by a miniscule amount).
|
| In theory if BTC is still being used in 2150 or whenever
| the block reward goes to zero, all the cost of mining will
| be borne by those actually exchanging BTC, and the people
| just holding it will be free-riding, with the security of
| the network paid for entirely by people transacting on it.
| Not sure how well this will work.
| j3th9n wrote:
| What about all those Lightning Network transactions on top of
| Bitcoin?
| sharpneli wrote:
| https://bitcoinvisuals.com/lightning
|
| No information on actual transactions performed. But in
| practice the lightning network is tiny and stagnant.
|
| If it would actually be used it would perhaps be more
| relevant, but it really doesn't seem to be. Except as an
| excuse for the bad efficiency.
| j3th9n wrote:
| That's because of the nature of the Lightning Network. You
| can only see transactions going through your own LN node,
| if you run one. Only the opened LN channels are visible for
| everyone.
| rspeele wrote:
| Ok, but according to that site, the total capacity of all
| those opened channels is only a little over 1,000 BTC.
| The whole BTC network spends about that much on mining
| (block rewards + fees) _every day_.
|
| So is 1,000 BTC a lot of money, in which case, it's a lot
| to spend on mining?
|
| Or is it a small amount of money, in which case, it looks
| like LN is hardly used?
| j3th9n wrote:
| You can have an LN channel worth 10 dollars of bitcoin
| left open for years, over which unlimited transactions
| route worth 10 dollars or less each.
| xur17 wrote:
| Exactly - and I can say from experience that this does
| generally happen. I manage a node that receives
| significant amounts over lightning, and channels are
| typically reused with batch "loop out transactions" that
| free up liquidity by converting a bunch of lightning
| transactions into onchain funds without closing a
| channel.
| sharpneli wrote:
| Sure. But the amount of channels gives an indication on
| the potential users. And it's way way less than on the
| main network, basically a footnote at this point.
|
| Yeah it _might_ grow in the future. But until it does it
| doesn't work as an argument.
|
| Also in order to get into Visa levels of efficiency one
| would have to have (assuming the 741kWh in the main
| network) 500k TX per second in the lightning network with
| 0 energy cost. Visa handles around 1700 per second.
|
| So basically if we'd have all the worlds economy in
| Lightning network we might get close to those numbers
| (assuming 8 billion people each doing one transaction per
| 4 hours, that's super high but ah well, whatever). And
| that's assuming the mining energy consumption doesn't
| change at all which it definitely would not do in case of
| the whole world relying on Bitcoin.
| j3th9n wrote:
| The amount of channels doesn't give any indication on the
| potential users. For example a bitcoin exchange can have
| one LN channel open with the rest of the network and
| allow many transactions per second for all its users. And
| I believe LN will grow much bigger than VISA, because not
| only people will make transactions, also programs who
| will send many micro-transactions to eachother, something
| which is far from possible with the VISA network.
| rawtxapp wrote:
| The whole point of lightning network is to be p2p, so
| you're not supposed to know how big it is or how often it's
| used.
| minsc__and__boo wrote:
| Lightning removes any of the benefits of Bitcoin by being a
| traditional trusted payment system.
| j3th9n wrote:
| Lightning doesn't remove anything from Bitcoin, it only
| adds the option to make instant transactions as a second
| layer on top of it. If you want the benefits of Bitcoin,
| you can use the slower and 100% trustless Bitcoin network.
| xur17 wrote:
| If you think lightning is a "trusted payment system", you
| clearly don't understand how it works.
| xirbeosbwo1234 wrote:
| I have often seen people saying things like "Bitcoin is orders
| of magnitude less efficient than Visa". While true, it's kind
| of like saying "the Atlantic Ocean is orders of magnitude
| bigger than my swimming pool".
|
| Bitcoin is _six_ orders of magnitude less efficient than Visa.
| _Six_.
|
| And it's getting worse every day.
| tippytippytango wrote:
| The people making the transactions pay for that energy. At 10
| cents a kWh that's $16.5 , right in line with the current
| transaction price. Some people are getting enough value from
| the transaction to purchase that volume of energy. Who are we
| to tell them how to use the energy they purchase?
| Symbiote wrote:
| > Who are we to tell them how to use the energy they
| purchase?
|
| Personally, I also criticize people who use private jets,
| drive large cars, air-condition/heat a building excessively,
| and so on.
|
| Since I end up breathing the pollution they cause (and all
| the other effects), I feel I have a right to complain about
| it.
| amackera wrote:
| The downside of driving your tesla with a case full of bills is
| that there's no immutable world-wide distributed record of your
| transaction making it irreversible.
| kqr wrote:
| Well, it is irreversible to the extent giving any physical
| papers to another person is irreversible.
|
| However, the upside of driving your Tesla with a case full of
| bills is that there's no immutable world-wide distributed
| record of your transaction making it irreversible.
| amackera wrote:
| It's reversible in the sense that the second you leave, I
| can just claim you never dropped off the cash. AKA I can
| reverse it.
|
| Bitcoin isn't digital cash, it has different tradeoffs.
| That implies there are upsides/downsides to all of these
| factors.
| kqr wrote:
| Sure, you could claim that, but if you're doing it at a
| scale that ultimately matters, then you're only harming
| yourself. The only kind of people who would be interested
| in having business with a person mired in such
| controversies are people you don't want to have business
| anyway.
| spaced-out wrote:
| Maybe the guy you hired to drive the Tesla just stole all
| or some of the cash? How would you know?
| kqr wrote:
| We can spend all day coming up with slight variations of
| this scenario where one or the other person is to blame.
|
| In the end, this situation is one of the few things
| humans have grown really adept at handling. We're
| (compared to many other things) very good at negotiating
| complex social situations and teasing out who are getting
| shafted in a situation, and we have techniques for
| dealing with it. (Spreading rumours and/or going to the
| local leader are prominent among them.)
|
| We have set up economic systems based on trust since
| forever, and they generally work very well. The only
| times they stop working are when too large authorities
| get involved. But there are many responses to that that
| aren't cryptocurrency.
| tomlagier wrote:
| > Bitcoin isn't digital cash
|
| This made me laugh. It's true, but the name literally
| means "digital cash".
| scythe wrote:
| I was expecting the last word of your post to be "public".
| orange_tee wrote:
| That is not necessarily a downside.
| amackera wrote:
| I've heard driving Teslas is fun
| narcissismo wrote:
| Also, if you accidentally drive 3601 miles, you lose on the
| transaction :)
| ctdonath wrote:
| Of course there is: physics. I hand you a pile of
| coins/bills, you have it and I don't. "Bearer" is sufficient
| information.
| amackera wrote:
| That's not really what irreversible transactions means in
| this context.
|
| What ledger has recorded this transaction? How might a
| dispute be resolved? What's stopping the receiver from just
| claiming you never dropped off the cash when you drive back
| home?
| lottin wrote:
| A transaction involves exchanging something (usually a
| currency) for something else. What you say is that with
| bitcoin you have proof and irreversibility of payment but
| the transaction can still go wrong because payment is
| only one end of the deal. And when the transaction goes
| wrong you probably wouldn't want a form of payment that
| is irreversible.
| michaelt wrote:
| Ah, but if you send money to a bitcoin address the
| recipient could simply claim the address you sent the
| bitcoin to wasn't theirs.
|
| And if they can sign a non-repudiable statement that a
| given address _is_ theirs, they can just as easily sign a
| non-repudiable receipt when you hand over the cash.
| hertzrat wrote:
| Often a simple bill of sale is sufficient
| amackera wrote:
| "Often" isn't a guarantee.
|
| Turning "often" into "always" is the reason bitcoin
| exists, and the reason it uses so much energy.
| optimiz3 wrote:
| Plus the non-instantaneous driving part.
| buzzerbetrayed wrote:
| Apparently you haven't tried to send Bitcoin when it is
| backed up. In such times, driving the cash across the
| country would be much faster than waiting for the Bitcoin
| transaction to clear.
|
| edit: fixed a typo
| optimiz3 wrote:
| I have tried this, and the way you resolve it is by
| raising your transaction fee. This is done with Replace-
| By-Fee or Child-Pays-For-Parent transactions.
| amackera wrote:
| Unless of course you want to send two transactions at the
| same time.
| buzzerbetrayed wrote:
| Good point. You also don't have to pay attention to the
| Bitcoin transaction the entire time like you do the road.
| I'm more just commenting on how Bitcoin transactions are
| anything but "instant".
| Nursie wrote:
| Many would see that as an upside. Irreversible transactions
| are not very desirable to a lot of folks, particularly where
| it comes to the consumer side of things.
| ecommerceguy wrote:
| As such thus regulations will occur once normal folks can't
| get a refund for whatever broken trinket they purchase with
| Dogecoin or EROS or ETH or ETHC or BSV or Ripple or Stellar
| or, or do I need to continue?...
|
| I'm off to play in the penny stock section of Yahoo... /s
| amackera wrote:
| In that case, write them a cheque?
|
| If you don't want irreversible transactions, you don't want
| bitcoin.
|
| My point is that claiming bitcoin is or isn't inefficient
| relative to other systems is nonsense. There's simply no
| comparable system that has the same guarantees as bitcoin,
| presently or throughout history.
|
| As far as we know, the power cost of bitcoin may very well
| be the minimum required energy to run an irreversible
| proof-of-work distributed ledger. Maybe spending 1% of the
| world's energy to have this public infrastructure is
| actually a good deal? I really don't know.
| Nursie wrote:
| > If you don't want irreversible transactions, you don't
| want bitcoin.
|
| You brought it up as an upside.
|
| > Maybe spending 1% of the world's energy to have this
| public infrastructure is actually a good deal?
|
| That seems highly unlikely, especially at a time when we
| don't have negative externalities priced into that energy
| cost, and we know we're damaging the climate, and given
| that the only thing it really brings to the table is
| decentralisation. Which itself is firstly a bit of a sham
| (mining tends to centralise) and not even that important
| to the speculators.
| notahacker wrote:
| If we can conclude it's nonsense to say that other
| systems are more efficient than BTC because other systems
| aren't proof of work distributed ledgers, maybe it's also
| nonsense to say that Teslas are more energy efficient
| than something with a 6 litre V12 engine, because they
| don't have a throaty growl or run on petrol.
|
| Back in the world of actual use cases, we can probably
| put a ceiling on the value of circumventing AML laws
| without using a non-POW altcoin at well below BTC's
| current energy cost.
| z3t4 wrote:
| Energy is the ultimate currency. A bitcoin transfer is cheap
| considering the amount of energy it takes, and its also cheaper
| then a bank transfer. Visa is overcharging if it takes such
| little energy.
| mrb wrote:
| << _a single Bitcoin transaction consumes 165kWh_ >>
|
| This needs to be repeated in every HN thread about Bitcoin: no,
| transactions don't consume energy. The proof-of-work is
| completely independent of the number of transactions. A block
| could have 1 or 1000 transactions, but the energy consumption
| would be the same.
|
| People have this wrong idea that more transactions imply more
| energy consumption. That's just not true.
| [deleted]
| ctz wrote:
| > The proof-of-work is completely independent of the number
| of transactions. A block could have 1 or 1000 transactions,
| but the energy consumption would be the same.
|
| There's a block limit, though, right? It doesn't scale up
| infinitely -- you might have 1000 transactions in a block,
| but not a million. Therefore, it is accurate to attribute the
| energy per block to securing the transactions within.
| rodiger wrote:
| Also worth noting though that "extra" energy per-tx
| increases the security of that tx. You aren't just paying
| for the system to function, you're paying for the system to
| be resistant to bad actors.
| 3np wrote:
| It's misrepresentative to represent it just in quantities of
| number of on-chain transactions.
|
| First, let's look at the actual transacted value: last 24h ~90
| billion USD.
|
| Then, consider the narrative of Bitcoin as a store of value -
| the value of Bitcoin depends on the security of the network, so
| this needs to be taken into consideration as well.
|
| One estimate of the current market cap of Bitcoin is ~800
| billion USD.
|
| Then you also have all the things relying on and extending
| Bitcoin, without each unit of added value resulting in
| individual on-chain transactions. Take Lightning Network, for
| example. Uncountable (literally) number of transactions all
| enabled by the base layer of the Bitcoin blockchain, protected
| by its proof of work. It's only the entry- and exit-points that
| result in on-chain transactions.
|
| Then there is also something untangible; the things bitcoin
| enables. Can you put a number in watts on how much is
| reasonable for the unknown number of individuals who have been
| able to remit money to their families that they otherwise would
| not have been able to? Those locked out of the global financial
| ecosystem just because they were born or are living in the
| "wrong" country?
|
| If you personally find that those dimensions makes it more
| reasonable or not is up to you, but let's at least try to get a
| reasonable narrative.
| madacol wrote:
| I think the real value in Bitcoin is its immutability. I don't
| think there's any piece of information in the world as
| immutable as the first bitcoin block mined by satoshi.
|
| This property is what powers amazing projects like
| OpenTimeStamps (https://opentimestamps.org/), this will become
| an essential tool for notaries all around the world,
| seriously!, and this has nothing to do with number of
| transactions, this scales to O(1) (you only need one
| transaction to prove as many things as there needs to be
| proved). Previous to bitcoin existence I don't think there was
| ever a distributed way of proving a piece of information
| existed previous to X, and even if there was, it was probably
| centralized or much much MUCH weaker than bitcoin. There's just
| no replacement, not even a million years as effective as
| bitcoin is for this, if I'm wrong please tell me! I want to
| know!
|
| Most people here in favor of bitcoin argue about inflation, I
| understand the reasoning, and I'm from Venezuela, I pretty sure
| understand that value, but that's just missing the point,
| immutability >>> inflation protection.
|
| And if we go into the smart-contracts terrain, that's a whole
| other world of very diverse possibilities of values to be
| uncovered
| snickms wrote:
| True - and even with this tremendous waste, it pays for itself.
| We have never looked beyond monetary return to justify the
| existence of anything and i fear we are doomed to stay that
| way.
|
| Thankfully, renewables are becoming more profitable. If we
| built enough, we could power the USA. Imagine that.
|
| All the bitcoin, teslas and visa transactions you would ever
| want, with no squabbling.
| Geee wrote:
| That comparison is flawed. Visa is not money. The purpose of
| mining is to protect the value of the currency.
|
| Protecting the value of the US dollar requires a huge economy
| with politics and military power.
| perfunctory wrote:
| Wouldn't you eventually need military power to protect your
| bitcoin mining rig?
| mateuszf wrote:
| No if it's decentralized enough.
| benlivengood wrote:
| Visa is literally money created by issuing credit just like
| all the other money in the economy. No one spends specie.
| Geee wrote:
| It's credit that is backed by the US dollar. Similarly Visa
| could use Bitcoin as their base currency, and they probably
| will.
| moonbug wrote:
| > It is hilariously inefficient system
|
| I think you mean "morally reprehensible"
| reedf1 wrote:
| And the cost of an off-chain transaction? Actually, you're
| right, that's not worth mentioning because that doesn't fit
| with your argument.
| africanboy wrote:
| what are you referring to?
|
| off chain operations don't need to spend a lot of energy to
| validate transactions.
|
| AFAIK globally the banking system estimated energy
| consumption amounts to ~100 terrawatt of power annually
|
| that amount includes ATMs, servers and branch offices
|
| EDIT: I forgot how touchy people on BC threads could be.
|
| The data on energy consumption of banking system was cited
| from a post of a BC advocate
|
| Statista has published data for transaction costs of 2020
|
| https://www.statista.com/statistics/881541/bitcoin-energy-
| co...
|
| What's interesting to me, on a human level, is the way people
| in the BC World keep moving the goalpost, one day they are
| greener because the total absolute power consumption is lower
| (regardless of users - I remember when in 2019 BC consumed
| more energy than Switzerland), then when it's not better in
| absolute anymore, BC is greener because is powered by
| renewables, like renewables were only available to BC miners,
| now that BC power consumption is going up (and fast) and
| banking is going down (slowly) it's ok, because it's the
| price to pay for freedom and everybody should be happy, even
| though they don't care about bitcoins etc. etc.
|
| Funny, indeed.
| Nursie wrote:
| Well that would be double, as you have to set up and tear
| down the lightning channel with a transaction for each
| operation...
| reedf1 wrote:
| ...and the cost of those operations?
| chill1 wrote:
| Your comment is so obviously disingenuous. It makes
| absolutely no sense to open a Lightning Network channel to
| send one transaction and then immediately close it.
| UncleMeat wrote:
| Why? If I want to send money to Bob in Venezuela I need a
| connection to him. And I'm not interested in sending
| further transactions to him. And he is in Venezuela and
| cannot rely on institutions (this is the real scenario
| that advocates keep bringing up). How am I going to pull
| this off without an on-chain transaction?
| j3th9n wrote:
| You both use your lightning app connected to a LN payment
| processor which already has the necessary channels open
| with other nodes and/or payment processors.
| [deleted]
| UncleMeat wrote:
| Can't do it in Venezuela. The whole point of that
| scenario when raised as a reason why btc is awesome is
| that you don't need an attached institution and your
| transactions cannot be censored.
| j3th9n wrote:
| An LN payment processor is not institution, it's just a
| LN node which has channels open to many other nodes and
| to which you as a user can connect to, so you don't need
| to open separate channels with everyone you are doing
| transactions with. And if your LN node becomes
| unreachable due to censoring: they are often available
| over Tor too.
| Nursie wrote:
| Such a node becomes a payment processor, and must have a
| _lot_ of BTC tied up in its channels in order to
| facilitate these payments.
|
| It's basically a bank at that point. Or a worse Visa.
| j3th9n wrote:
| It doesn't need a lot of BTC tied up in channels. It's
| enough to have one channel open with another well
| connected node. Transactions can jump over several nodes
| to reach their destinations. And everybody can become a
| bank/payment processor for their friends and family with
| an LN node, no need for big centralized institutions.
| Nursie wrote:
| We were talking about the well connected nodes, they need
| funds tied up in many channels. That's what makes them
| well connected. And effectively institutions. If it takes
| off don't be surprised if such entities start charging
| fees.
| j3th9n wrote:
| It's up to each node how many channels they open and how
| much bitcoin is used for those channels, but lots of
| channels doesn't make it an institution. An LN node has
| to play with the same rules as every other node, it
| cannot enforce rules like institutions. And if you don't
| like some LN node's transaction fees, you choose a
| different node for your transaction to go through. As a
| result the high-transaction-fee node will soon lower its
| fees. Btw, every LN node is already charging fees.
| Nursie wrote:
| >> It's up to each node how many channels they open and
| how much bitcoin is used for those channels,
|
| If you want to be paid you have to find a route that's
| willing to lock up enough coin at their end for that.
|
| So they are exactly like banks - if you want good ability
| to transact you have to pick one that works for you and
| pay appropriate fees.
|
| It really is a hack.
| j3th9n wrote:
| Solution: Multi-Path Payments.
| [deleted]
| [deleted]
| Nursie wrote:
| It was a joke.
|
| OTOH lightning is IMHO a joke as well, for many reasons.
| Funds need to be tied up, nodes generally need to be
| online, routing is a (mathematically) hard issue, and the
| channel open and close transactions (or 'add funds')
| would certainly become an issue on the main chain if
| lightning became popular.
| j3th9n wrote:
| You clearly don't understand how the Lightning Network
| works.
| [deleted]
| andreygrehov wrote:
| Super pessimistic. I don't know why this comment is at the top.
| The analogy and calculations are fun, but nothing more than
| that. You are basically suggesting that we all should buy
| Teslas, right? 330 miles roundtrip is about 5-6 hours of non-
| stop driving. Not the best UX.
|
| I do international transfers quite often. Every time I try to
| send a more or less large amount, it becomes a pain in the ass
| both for sender and recipient. You have to prove that you are
| not a unicorn.
|
| People use Bitcoin because it's freedom from the existing
| banking system, plain and simple. When you are sending money
| via a bank, it's like someone is watching you at a bathroom. It
| simply doesn't happen with Bitcoin.
|
| Bitcoin will be the force that will make all the miners
| completely switch to a green energy (and that's already
| happening).
| rspeele wrote:
| In your estimation, how much Bitcoin is purchased in hopes of
| gaining freedom from the existing banking system, and how
| much Bitcoin is purchased in hopes of making money when it
| goes up?
| andreygrehov wrote:
| > In your estimation, how much Bitcoin is purchased in
| hopes of gaining freedom
|
| Not a lot, but it's definitely a thing. Speaking about
| majority, these days, most people and companies are
| accumulating Bitcoin only because in 5-10 years it'll worth
| much, much more. And that makes a lot of sense if you think
| about it. The shift to a digital form of currency will
| eventually happen anyway. I do not believe Bitcoin will
| ever become a global currency, but I strongly believe that
| it's going to stay with us for quite a long while. The
| blockchain technology is in its infancy and is experiencing
| a lot of research on all fronts.
| imtringued wrote:
| >You are basically suggesting that we all should buy Teslas,
| right?
|
| Here's how arguments work. You read a claim and disprove it
| by offering a counterexample. The weaker the counterexample,
| the weaker the disproven claim.
|
| In the case of Bitcoin a weak counter example is to show that
| even a grossly inefficient method of money transfer has
| superior efficiency. A stronger counterexample based on
| Visa's less than 2Wh per transaction numbers absolutely
| destroys the claim that Bitcoin's efficiency is reasonable.
|
| It's laughable that anyone would even defend Bitcoin instead
| of recognizing the inefficiency. It's laughable in the exact
| same way the Tesla suggestion is laughable, except Bitcoin is
| even worse.
| andreygrehov wrote:
| I'm well aware of how facts work. My Tesla response was
| more of a sarcasm and was primarily meant to highlight that
| the OPs arguments are somewhat useless. They make sense,
| but, practically, they are useless.
| paulsutter wrote:
| Bitcoin uses electricity for security, not transactions. The
| transaction rate for bitcoin is basically independent of the
| hashrate
| rspeele wrote:
| This is like saying my car's engine uses oil as lubricant,
| not as fuel. It's true, but I still have to change the oil
| every 5,000 miles. So I can still calculate the cost of oil
| changes into each mile.
|
| Since transacting Bitcoin securely is _the_ utility of the
| network, just as moving around is the utility of a car, it
| seems quite fair to judge the energy consumption of the
| network in terms of energy expended per transaction secured.
| paulsutter wrote:
| It's quite different: the energy represents the market cost
| of securing the network. The value of the network supports
| that cost otherwise nobody would be performing mining.
|
| If this were taxpayer supported I could understand the
| objection, but the people buying the energy to run the
| system are doing so as a commercial activity to make a
| profit. How is this commercial use of energy inherently
| worse than other commercial activities?
| KorematsuFred wrote:
| Without a doubt it is inefficient. Now US government can arm
| twist wist Visa and Mastercard to stop serving companies they
| dont like (Po*nhub). They can not do that to Bitcoin. This is
| the value the inefficiency adds.
| acec wrote:
| Nobody ever said that Bitcoin was a efficient system. It has
| other qualities that worth it.
| anigbrowl wrote:
| Indeed it does, but generally in industry and technology one
| goes from inefficient prototype that serves as proof of
| concept to a more efficient one. Do other cryptocurrencies
| not improve on Bitcoin in some way? If so, why does it
| continue to have value despite its agreed-upon flaws? If not,
| why do they have any value?
| newswasboring wrote:
| Every time anyone brings up a problem with Bitcoin someone
| says this. It seems like bitcoin is not designed for anything
| but existing.
| wickoff wrote:
| Exactly right. All needs to do is outlast everything else.
| This where the store of value narrative comes from.
| kgwgk wrote:
| And when it goes down 75% in a few months it doesn't
| matter because if your intention was not to "store value"
| until the end of time you're doing it wrong. HODL!
| hshshs2 wrote:
| couldn't it be replaced with something that's not terribly
| broken? then we can save the energy expended in all these
| mental gymnastics too
| lacker wrote:
| _At that rate and assuming 4tx per second a single Bitcoin
| transaction consumes 165kWh. A Tesla battery is bit over 50kWh.
| So let 's round that to 3 full charges of Tesla battery._
|
| This seems like a roundabout way to analyze efficiency. A
| simpler way is just to look at how much it costs in dollars,
| rather than trying to convert everything into energy units.
|
| It varies but over the past couple months a Bitcoin transaction
| has cost from $7-$20.
|
| source:
| https://ycharts.com/indicators/bitcoin_average_transaction_f...
|
| That is more than it costs to power a Tesla driving 400 miles,
| yes, but the cost of that activity is dwarfed by the cost of
| the driver. You are missing all the energy it takes to create a
| human with the skills to drive a car, pay for their opportunity
| cost, and keep them alive for the time it takes to drive for
| 400 miles ;-)
|
| It's also more expensive than an electronic funds transfer, but
| it's comparable in price to wire fees, so it just depends on
| the details of your financial transfer whether it was
| efficient.
|
| Overall though that $20 fee is generally going to be dwarfed by
| the utility that a large financial transfer brings. It would be
| nice if it was cheaper but this doesn't seem like it's insanely
| wasteful or anything. It's really just demonstrating that it
| will be hard for Bitcoin to perform in small-value transactions
| like making a purchase at a retail store, in a way that people
| once thought it would.
| centimeter wrote:
| Now include the environmental impact of all visa employees. You
| can't divorce the effects of the people who run the system
| (which are relatively very insignificant for Bitcoin) from the
| effects of the system itself.
| kvz wrote:
| Ethereum 2.0 solves this via Proof of Stake. They are rolling it
| out in 2021 and I think the environmentally concerned will then
| consider the number two coin because of how energy hungry Bitcoin
| is. PoS also greatly increases transaction speed.
| ffggvv wrote:
| proof of work is immoral if you're an environmentalist. that's
| why tesla acquiring BTC was especially egregious
| koonsolo wrote:
| Exactly my thought. They could have picked a more environment
| friendly cryptocurrency (e.g. Nano).
|
| It would also had a relative bigger impact on the price, and so
| Tesla could have made a lot more money with such a move.
| DanielleMolloy wrote:
| Has any government entity attempted to ban Bitcoin yet, and is
| this even possible?
| peteretep wrote:
| Genuine question: how much does this matter if much of it is
| renewables and cheap hydro? I feel like the negative
| externalities of using a lot of electricity are very very tied to
| where that electricity came from
| Wowfunhappy wrote:
| Is there reason to believe even a majority comes from renewable
| sources? And then, how much of that clean energy _could_ be
| powering other things which are instead using fossil fuels?
| peteretep wrote:
| I'd half remembered mining clusters near large hydro projects
| in China. As to the opportunity cost, getting the electricity
| from one place to another where it can be used if you have a
| local glut isn't easy, aiui
| celticninja wrote:
| A lot of mining is done close to hydro dams, this power was
| in some cases waste power that would be unused. So it is
| swings and roundabouts, I don't think any new coal power
| stations are being built to mine bitcoin but bitcoin miners
| have taken advantage of excess electricity production to site
| their mines where power is cheapest.
| Layvier wrote:
| At least in Europe, the lowest prices (even negative
| sometimes) for electricity are when renewable energies are
| producing a lot (e.g. when there's a storm in the north sea).
| If bitcoin mines are plugged on the real time market of
| electricity they would have an incentive to turn on when
| there's a lot of renewable energy produced. Assuming mines
| optimize their mining schedules on that, there's a scenario
| in which it could even help soak up the low prices and push
| investments into renewables.
| foepys wrote:
| Even if it were all green energy, why not use it to produce
| aluminum or to get rid of coal instead of wasting it on math
| puzzles?
| madflame991 wrote:
| That would depend on how much heat the computations/mining
| itself generates - has to be some - and the total effort to
| make graphics cards or other hardware for a lot of clients that
| would not really exist if crypto wouldn't be a thing
| throwaway2245 wrote:
| This is a bit too hypothetical: the most generous estimate I
| can find is that Bitcoin is still using 61% non-renewable
| energy, in as much as farms are favourably set up in places
| with cheap energy (somewhat but not entirely correlated with
| renewable energy).
| nemetroid wrote:
| According to their mining map[1], 35% of the global hashrate
| happens in Xinjiang. From Wikipedia, it looks like most major
| power stations in Xinjiang are coal driven[2].
|
| 10% is in Sichuan, which appears to be largely hydro-driven[3].
|
| 1: https://cbeci.org/mining_map
|
| 2:
| https://en.wikipedia.org/wiki/List_of_major_power_stations_i...
|
| 3:
| https://en.wikipedia.org/wiki/List_of_major_power_stations_i...
| simonebrunozzi wrote:
| It seems [0] that roughly 40% of crypto mining uses
| renewables. Yesterday I wrote a lengthy post about the topic
| [1], if you're keen to know more.
|
| [0]: https://www.smart-energy.com/renewable-
| energy/renewables-pow...
|
| [1]: https://simon.medium.com/bitcoin-and-pollution-the-
| definitiv...
| josalhor wrote:
| If you freed all those resources, you could equivalently reduce
| fossil fuel consumption (up to 0%, of course). So I say it
| matters very much.
| Spooky23 wrote:
| If you made it a crime to fly to tropical islands to enjoy
| the beach in the winter, you would enjoy a reduction in
| fossil fuels too, and people would be more productive than
| loafing about on the beach.
|
| End of the day, people choose to spend resources on things
| that provide utility to them.
| raziel2p wrote:
| Even if all of Bitcoin uses renewables, that's demand for
| renewable energy that drives prices up, which will lead other
| energy consumers to either pay more or pick less expensive non-
| renewable energy sources instead.
| peteretep wrote:
| I don't think power markets are that fluid in most of the
| world
| roland35 wrote:
| One argument I've heard it's that it increasing the power
| demand beyond what renewables can handle. Reducing total power
| consumption would be more ideal.
| jtanner wrote:
| Yes it's Bitcoin is inefficient, but in exchange we get social
| scalability.
|
| https://unenumerated.blogspot.com/2017/02/money-blockchains-...
| gatvol wrote:
| Surely the comparison should be against conventional systems used
| to store and transfer value? Consider a bank, with its
| datacentre, branches, and people employed to eyeball and verify
| transactions, maintain the supporting systems and infra, to begin
| with...
| Havoc wrote:
| Perhaps not all of it is entirely "wasted" though. I've largely
| been able to avoid heating this winter as a result of crypto
| mining.
|
| A computer pumping ~300W into the air 24/7 is remarkably
| effective for a small apartment
| twobitshifter wrote:
| I've actually seen a few startups which install small servers
| in homes for heating. The idea is to let the cloud heat your
| home. I think there's still a cost to the home owner but their
| heating bill is reduced.
| 0xQSL wrote:
| With a heat pump you'd get about 3x the heat for the same
| amount of power
| hundchenkatze wrote:
| But a heat pump gives you about 0x the amount of bitcoin.
| krtkush wrote:
| But will that heat pump mine bitcoins for me?
| betterunix2 wrote:
| No but you could use the money you save on electricity to
| buy bitcoin if you really want to own it (a better question
| is why anyone would want to hold bitcoin?).
| IgorPartola wrote:
| Electricity is one of the most inefficient ways to heat a
| dwelling. I think natural gas is still considered to be several
| times more efficient but I haven't looked at it in a few years.
| Of course if you are also getting benefits from the crypto you
| mined that will offset the cost.
| AlgorithmicTime wrote:
| Electricity is 100% efficient in a resistance heater, in that
| all the electricity used is turned to heat. However, it is
| considerably more expensive per unit heat than natural gas,
| even though you may only get 70-90% efficiency with your
| boiler or furnace. A heat pump can be even more efficient,
| though. An electric heat pump can be more than 100%
| efficient, in that each watt of electricity can be used to
| move more than 1 watt of heat into your home using the heat
| pump.
| SigmundA wrote:
| If electricity is made combusting fossil fuels at a power
| plant at say 40-50% effciency thats the problem.
|
| If your using fossil fuels for heat its more efficient to
| burn them directly at point needed and capture the heat,
| rather than use the heat to convert to mechanical then
| electrical then back into heat.
|
| Air source heat pumps are basically solar assisted, they
| move heat from outside air into heated space using
| electricity which also contributes resistive heat in
| compressor friction. The outside air is heated by the sun.
| burke wrote:
| This depends on what you're measuring the efficiency with
| respect to though, right? Cost-wise, yeah, natural gas
| outperforms electricity everywhere I'm aware of. On a grid
| powered entirely by renewable energy though, there's a
| meaningful sense in which the electrical method is "more
| efficient"
| IgorPartola wrote:
| Yes I meant on a cost basis. Renewables do throw a wrench
| into it of course.
| xxs wrote:
| >Electricity is one of the most inefficient ways to heat a
| dwelling.
|
| This is not true. Resistive heating is inefficient indeed but
| not all forms of conversion of electricity are inefficient.
| Geothermal pumps are very efficient for instance and use
| electricity only, they can be assisted directly by solar (PV)
| too.
| zaarn wrote:
| Resistive Heating is literally the most efficient form of
| heating where 100% (ie, all of) of the electric watts you
| put in are turned into thermal energy.
|
| Doesn't mean that the generator on the other end is
| efficient but that is a separate concern that can benefit
| from economies of scale (a big gas turbine would be more
| efficient than a swarm of small gas ovens producing the
| same energy).
| xxs wrote:
| The matter of discussion is this: "most inefficient ways
| to heat a dwelling."
|
| Not the fact that conversion of electricity doesn't have
| make energy disappear.
| UncleMeat wrote:
| But you need to transmit those watts. Pumping natural gas
| takes overall less power on the entire ecosystem. That's
| what people are talking about.
|
| Electrically powered heat pumps also produce >100%
| efficiency.
| zaarn wrote:
| Heat pumps move heat around, that has to come from
| somewhere. Their performance is not measured in
| efficiency but the performance coefficient, which simply
| measures in Watt per Watt how much energy is moved.
| IgorPartola wrote:
| Due to heat pump inefficiencies, they only make sense if
| you can get like a 3-4x multiplier out of them. Beyond
| that you break even energy-wise. Basically if it's -10F
| outside, your heat pump isn't going to be cheaper than a
| resistive heater. On the other hand when it's 50F outside
| you do better than 4X.
| UncleMeat wrote:
| The point is that I can heat my home by 10 degrees with a
| heat pump using less energy than electric resistive
| heating, except in specific conditions where it is too
| cold outside for the heat pump to function well. When I
| run my auxiliary heat (electric resistive heating), my
| bill skyrockets.
| zaarn wrote:
| Where I lived until like a year ago, it was cheaper to
| heat via electric heating than the heatpump by about
| 3-4%, the maintenance costs of the heatpump compressor
| did the rest after a decade. That is in a temperate
| region with winter not going below -10 or so.
| UncleMeat wrote:
| It isn't good for all regions. Just like swamp coolers
| aren't good for all regions. But the point is that
| "resistive heating is the best you can do if you want to
| heat your home" is just plain wrong.
| friendzis wrote:
| From thermodynamic standpoint every process is 100%
| efficient. It is a useless metric. Normally we measure
| desired energy over certain consumed energy. Heat pumps
| achieve >100% efficiency.
|
| Furthermore, that 100% efficiency of a resistive heater
| is only true under very specific high school level
| circumstances. Under no practical circumstances (e.g.
| source resistance, reactive load) resistive heater is
| 100% efficient (though it can get close).
| zaarn wrote:
| From a thermodynamic standpoint, yes, but nobody with an
| honest face will claim that makes measuring wasted energy
| as efficiency a bad measurement.
|
| In cases of heating, resistive is 100% efficient as you
| loose none of the energy put in to waste heat, only
| effective heat, while a gas oven or heater will loose
| heat to it's exhaust gases, thereby being less efficient.
|
| I wouldn't say this is "high school level" circumstances.
| The waste heat in the wires of your house feeding into
| the heater will also heat up, no?
|
| The only energy lost is outside the system we're trying
| to measure, hence, not relevant.
| friendzis wrote:
| > as you loose none of the energy put in to waste heat
|
| The mains is normally AC. You WILL lose energy either in
| AC-DC converter or in reactive load of the heater.
| zaarn wrote:
| Reactive load is dissipated as heat, it does actually do
| what is intended here.
| friendzis wrote:
| I think you are conflating active and reactive loads.
| Reactive load is basically EM, not heat.
|
| Yes, reactive current is still current and any series
| active load (wiring) will experience that current and
| heat up. The reactive load itself is "imaginary".
| orthoxerox wrote:
| A gas oven is 100% efficient, while a gas turbine is at
| most 60%.
| zaarn wrote:
| A gas oven is not 100% efficient. If yours says it is,
| it's a lie sold to you by gas oven manufacturers. It's
| 100% efficient compared to some previous oven sold.
|
| Simple proof by example; if the exhaust air of your gas
| oven is warmer than ambient energy, it cannot be 100%
| efficient. (A few other laws of thermodynamics also play
| in here)
|
| A gas turbine has the advantage that it can use higher
| temperature gradients within, as well as high speeds and
| other mechanisms to take advantage of larger burnoffs of
| gas.
|
| A gas turbine is 60% efficient at base load and largely
| will be able to maintain 60% efficiency while being
| maintained at this load. A gas oven has a rough
| efficiency of around 70-90 % in AFUE. AFUE does not
| measure actual thermal efficiency, you can usually
| subtract between 10-35% depending on your boiler system,
| which ends you between... 40-60% just like a gas turbine
| in a worst case. The better cases of 60-80% are unlikely
| to be a steady state efficiency and more likely to be
| achieved if you have a boiler with great heat capacity
| that can hold onto the heat for longer. The efficiency
| here is ruined by ignition each time the furnace has to
| start running.
|
| Turns out you can't cheat thermodynamics, but you can
| certainly market like you did.
| mavhc wrote:
| Heat pumps are more than 100% efficient though, as they
| move heat energy, not create it
| zaarn wrote:
| I would not call that a 100% efficiency. The efficiency
| of a heatpump is expressed in Watt per Watt, ie, how many
| watts of thermal energy are moved per watt of electric
| energy.
|
| The reason is that simply a heat pump does not convert
| electrical to thermal energy, so it has no comparable
| efficiency in that process.
| eeZah7Ux wrote:
| >I would not call that a 100% efficiency.
|
| That's the definition of efficiency for home heating.
| zaarn wrote:
| No, Heat Pumps are measured in COP (Coefficient of
| Performance), not thermodynamic efficiency or "the
| definition of efficiency for home heating". Which of the
| 5 definitions do you want to use?
| IgorPartola wrote:
| In theory. Remember that the motor of the heat pump isn't
| 100% efficient. It's still an electric motor. That's is
| of course offset by it not generating heat but rather
| transferring it. So say you're electric motor is 33%
| efficient. That means you need a 3x multiplier to break
| even with a resistive load. And the multiplier depends on
| the temperature difference between inside and outside. If
| it's 70F inside and 50F outside you are golden. If it is
| -10F outside, you are better off using a resistive load.
| SigmundA wrote:
| Bitcoin mining is resistive heating using semiconductors as
| the heating element.
| xxs wrote:
| Indeed it's waste heat (and not only in the
| semiconductors, the conductors/wires/traces and the metal
| in mosfets have minor contributions). The remark was
| about heating in general, hence the quote.
| frr149 wrote:
| Can you successfully mine bitcoin with one computer these days?
| Havoc wrote:
| Well I'm mining conflux [0] not bitcoin.
|
| And yeah that does seem to be "profitable". A 2070 Super card
| seems to net me a couple of bucks a day...enough to offset
| the cost. Probably not profitable in the true sense, but hey
| free heating is a win for personal finances.
|
| [0] https://confluxnetwork.org/
| gruez wrote:
| It's done with ASICs these days but the general idea of using
| the waste heat still holds.
| matchbok wrote:
| I think you misspelled remarkably. It's actually spelled
| "terribly".
| Havoc wrote:
| I'm sitting here in a tshirt despite it being near freezing
| outside. Call it what you like...works for me
| js8 wrote:
| > Perhaps not all of it is entirely "wasted" though. I've
| largely been able to avoid heating this winter as a result of
| crypto mining.
|
| I am telling myself the same thing when I play videogames. :-)
| EGreg wrote:
| And as Bitcoins get more scarce and get adopted by more and more
| banks and companies as reserves, the value of mining rewards is
| only going to continue rising, until Bitcoin will consume more
| electricity than the rest of the world combined. (Around the time
| it is worth $1.2 Million a coin.)
|
| Change my mind.
|
| Bitcoin rewards miners in Bitcoin, which is the ultimate
| deflationary "store of value", and has the world mindshare as
| such. Even if a network arose that was better in every
| technological way, if it was a "sidechain" to Bitcoin, then BTC
| would just be locked up as people migrated to that network, so
| "unstaked" Bitcoins on the original network would become even
| more scarce, thus mining rewards would go up even more. Bitcoin
| would be a store of value / collectible just like gold, except
| its supply would always be shrinking and mining rewards rising.
|
| PS: Consider I am right. How would governments even begin to stop
| it, if this use of electricity would net the provider more profit
| than powering a home?
| peteretep wrote:
| > Bitcoin, which is the ultimate deflationary "store of value"
|
| Inflating the supply of bitcoins is a value in a config file +
| buy-in from miners, who are the ones with all the capital to
| benefit from inflating the supply. Unsure why you think the
| miners are just going to go home when it's all mined and sell
| off their expensive equipment at firesale prices when they can
| collaborate to increase the amount of Bitcoin?
| EGreg wrote:
| Miners benefit from deflating the supply. If there were only
| 50,000 bitcoins and the rest was locked up in sidechains,
| then every mining reward would be worth far more. They would
| like more sidechains to Bitcoin.
|
| (Somewhere Joel Spolsky is yelling: "Commoditize your
| complements!")
| noch wrote:
| > Inflating the supply of bitcoins is a value in a config
| file + buy-in from miners
|
| Please learn about how consensus rules work.
|
| "The consensus rules are the specific set of rules that all
| Bitcoin full nodes will unfailingly enforce when considering
| the validity of a block and its transactions. For example,
| the Bitcoin consensus rules require that blocks only create a
| certain number of bitcoins. If a block creates more bitcoins
| than is allowed, all full nodes will reject this block, even
| if every other node and miner in the world accepts it." [0]
|
| Because users must consent to run full-node software with a
| particular version of consensus rules, miners cannot simply
| change the rules. This was shown in 2017 with Segwit2x and
| UASF(User Activated Soft Fork).[1]
|
| In other words,
|
| "If securing Bitcoin requires consensus on what Bitcoin is,
| and Bitcoin is a database of values assigned to keys, and
| Bitcoin has a protocol for reassignment of keys, then
| securing Bitcoin can only be done by ... your node!" [2]
|
| > [Miners] are the ones with all the capital to benefit from
| inflating the supply.
|
| You're not thinking clearly about supply and demand. Because
| bitcoin has a fixed supply (21M), its price movement is a
| pure result of demand. If someone were to start inflating the
| supply, the price would drop, devaluing the coins for
| everyone including those doing the inflation because created
| coins are instantly visible to everyone. (Incidentally, this
| also creates a disincentive for Satoshi to ever move his
| "lost" 1M BTC. Moving them would instantly make them appear
| available to the market/network and be a massively
| inflationary event. Prices would immediately drop in response
| to this perceived increase in supply.)
|
| > Unsure why you think the miners are just going to go home
| when it's all mined and sell off their expensive equipment at
| firesale prices when they can collaborate to increase the
| amount of Bitcoin?
|
| Miners work for the block reward (which halves every four
| years) but also for transaction fees (an auction in which you
| bid for blockspace for your transactions). The question for
| the distant future is: will transaction fees be sufficient to
| ensure the security of the network?
|
| [0]: https://en.bitcoin.it/wiki/Consensus
|
| [1]: https://bitcoinmagazine.com/articles/bitcoin-
| independence-da...
|
| [2]: https://medium.com/bitcoinerrorlog/who-secures-
| bitcoin-95b19...
| foepys wrote:
| How does it scale when a block can only contain about 3,000
| transactions?
| charcircuit wrote:
| It doesn't. Bitcoins themselves will eventually be migrated
| of the bitcoin network so that they can be used with the rest
| of the defi ecosystem.
| EGreg wrote:
| It won't matter because the remaining "unstaked" bitcoins
| will be worth even more so all mining rewards will be worth
| even more - get it?
| EGreg wrote:
| It doesn't. Proof of work is the wrong architecture. We
| started https://intercoin.org to solve the problem. Others
| started other projects. But it doesn't do anything to demand
| for Bitcoin because nearly all of it is for Bitcoin as a
| store of value and deflationary investment that will go up,
| up, up.
|
| Yes it was called a cash system in the original whitepaper -
| but somewhere around 2013 the narrative shifted from Peer to
| Peer Cash to Store of Value. And it has stuck. This is a
| copout but it works! Bitcoin has all the features to be a
| great store of value and nothing more...
|
| Bitcoin is now a store of value and you dont need it to scale
| if once in a while someone wants to move $50K from their
| savings account to their checking account to actually use.
| They can also have Nexo, BitPay etc as debit cards backed by
| BTC reserves.
|
| So why do you need Bitcoin to be a good currency too?
| abledon wrote:
| SpaceX could probably help usher in a new age where we have
| mining nodes in space, big solar arrays (100 or so) powering a
| small 100-GPU cluster or ASIC cluster....
| mkl wrote:
| It would be far cheaper and easier to do this on Earth.
| There's plenty of sunny desert, heat dissipation is much
| easier, broken things can be repaired, etc.
| abledon wrote:
| ya but heat would dissipate into space and not contribute
| to global warming?
| mkl wrote:
| Dissipating heat into space is very challenging (vacuum
| makes a great insulator). On Earth the solar energy is
| arriving here already, so converting it to electricity
| and using it to perform calculations won't directly
| contribute to global warming.
| EGreg wrote:
| In capitalism, most players in the economy do not make
| decisions based on this
| PeterisP wrote:
| "the value of mining rewards is only going to continue rising"
| is not consistent with the design of Bitcoin. There is a finite
| number of BTC left to mine (15% of the eventual total?) and the
| amount of BTC received from mining is designed to halve every
| four years, so in the long run BTC processing will have to be
| funded more by transaction costs and less so by mining.
|
| "How would governments even begin to stop it" - I don't thing
| that governments will choose to try it, but if they did want to
| do so, a simple ban on all sale and barter in BTC would work.
| It wouldn't stop all trade, but making exits difficult would
| reduce investment interest sufficiently to get a huge decrease
| in price, especially since current price seems mostly defined
| by "store of value" i.e. investment arguments, not based on
| usefulness for transactions. If many investors can't exit, then
| it ceases to be a good store of value for them, reducing the
| demand.
|
| For example, Tesla $1.5B purchase was a big pressure upwards;
| but if it's known that no such purchases are ever coming again,
| and that Tesla's holding is now worthless (unlike some small-
| scale drug trader, a US company like Tesla can't really use a
| black market or person-to-person transactions to exhange it for
| anything), that would kill the short-term price; this would
| mean that the mining costs much more than their electricity
| costs (there is an inherent lag in block difficulty adjustments
| that's potentially huge in case of a rapid slowdown in mining
| rate) which may cause many miners to cease mining.
| ulzeraj wrote:
| Combined world governments going after miners is the best thing
| could happen to Bitcoin. Difficulty would drop allowing people
| to mine from general purpose computers again, which is a huge
| incentive. Then things will scale up again.
|
| The toothpaste is out of the tube. Nothing can be done.
| Wowfunhappy wrote:
| > Change my mind.
|
| Well, _personally_ , I'm still convinced Bitcoin is going to
| crash at some point. It doesn't work well as an actual currency
| because transfer times/fees are too high.
|
| I don't know if that will happen in one year or 20 years
| though.
| EGreg wrote:
| But that's not it use anymore. Yes it was called a Peer to
| Peer cash system but it failed at that. Somewhere around 2013
| the narrative shifted to it being a store of value. And that
| has stuck.
|
| It is the ultimate store of value.
|
| You think people will let governments destroy their store of
| value so that the world can use electricity for other uses?
| Let's explore that shall we.
|
| One third of the world farmland is desertified, today.
|
| Insects are dwindling and other species are experiencing an
| extinction on unprecedented scales today.
|
| Fossil fuels are being extracted at rates that are not
| stopping anytime soon. We never switched to electric cars
| yet.
|
| We couldn't even switch to biodegradeable plastic and instead
| polluted all the bodies of water on earth.
|
| You really think humanity will be able to stop this runaway
| economic effect designed to get bigger and bigger until it
| consumes the world's use of electricity? Why is this any
| different?
|
| PS: with exponential growth, by the time you note the
| electric use is one quarter of the world, it's too late.
| Wowfunhappy wrote:
| > But that's not it use anymore. Yes it was called a Peer
| to Peer cash system but it failed at that. Somewhere around
| 2013 the narrative shifted to it being a store of value.
| And that has stuck.
|
| Yep, a "store of value" created out of thin air, just like
| tulip petals! I don't expect it to last myself.
| EGreg wrote:
| And why not?
|
| What backs gold? It is more durable than tulip petals
|
| The more people buy Bitcoin as reserves the more it IS
| reserves. It is a network effect, man.
|
| That's how languages and cultures work too.
| Wowfunhappy wrote:
| Bitcoin is barely two decades old, whereas gold has been
| used for _centuries_ as a way to means of storing wealth.
| Gold was literally used as currency for much of that
| time, and today the price of gold is far more stable than
| Bitcoin.
|
| None of that means Bitcoin _couldn 't_ be the next gold,
| I just think the odds are overwhelmingly stacked against
| it.
| daptaq wrote:
| The problem with Bitcoin is that POW is an unbounded competition
| of who can provide more computational power, ie. energy, to
| represent a consensus. Comparing the energy usage to Argentina,
| Island or any other country is therefore just a snapshot of the
| issue: Miners are incentivized to either increase the efficiency
| of mining, or invest more energy -- and because the latter option
| is easier, we see power usage rising and rising, without it
| having any influence on the performance or functionality. The
| only imaginable bound is all the energy that Humans can dispose
| of, but I think that if that is even being considered, the means
| have been mistaken for the goals.
| blondie9x wrote:
| This is disgusting. Why is this stupid useless asset allowed to
| proliferate without regulation?
|
| Why are we not concerned about harvesting this blockchain at the
| cost of the planet? This is silly. Bitcoin needs to be regulated
| like other industries. It's polluting just the same. Regulation
| now please.
| andred14 wrote:
| Isn't it funny how the attacks on bitcoin have come after the
| Tesla announcement?
|
| Who is paying for these attacks I wonder?
| [deleted]
| paulpauper wrote:
| Criticism a about bitcoin power consumption betrays an understand
| of even elementary economics. Replace bitcoin with beanie baby,
| and one could have made a similar argument in the late 90s about
| beanie babies causing a fabric shortage or fabric being wasted on
| toys that could instead be used for better purposes. When the
| beanie baby market crashed, the problem effectively fixed itself,
| as there was this sudden glut of fabric. Additionally, increased
| demand for bitcoin production means more power will generated,
| similar to how increased demand for cloth due to beanie baby
| production lead to more total cloth being produced overall. It is
| not like cloth for clothes was diverted to create beanie babies.
| The increased production of power to mine bitcoins is funded by
| bitcoin profits, and represents a consensual economic transaction
| between two parties, not wastefulness.
|
| Of course, then you can talk about externalities such as climate
| change but I am ignoring this for now and just talking about the
| criticism of wastefulness.
| raverbashing wrote:
| And not criticizing the excessive consumption betrays a lack of
| understanding in physics, engineering and several areas of
| economy as well
| lmilcin wrote:
| That doesn't explain how humanity can reach collective
| consensus to burn energy to further ruin our planet because we
| can't reach collective consensus on how to efficiently exchange
| goods and services.
|
| That's what, you know, governments are supposed to be fixing.
|
| I am being brainwashed on a daily basis to turn off electronic
| devices, I pay extra for electronic devices to be marginally
| more energy efficient, I am crossing local law if my car idles
| for more than 60 seconds but it is fine to be burning energy on
| massive scale as a detail of computing algorithm.
|
| Not to mention I can't buy decent graphics card because of how
| prices are inflated by miners.
|
| Let's face it. If you are mining bitcoin you are effectively
| engaging in a destructive operation where you accept small
| extra payment for burning much larger amount of energy away.
| While the rest of the world tries to minimize our carbon
| footprint you are wasting part of the infrastructure that makes
| it possible for a cut.
| tedunangst wrote:
| Was there a fabric shortage in the 90s?
| Spooky23 wrote:
| Beanie babies created impacts far beyond fabric.
|
| - Consider the small plastic pellets, which will eventually
| work their way into delicate ecosystems and devastate the
| ecology for a millenium or more.
|
| - Since beanie babies were considered a store of value,
| countless tons of plastic storage bins and millions of cubic
| feet of climate controlled storage space are consumed to
| store beanie babies.
|
| - Back of the napkin calculations indicate that over a
| billion dollars has been spent heating and cooling beanie
| babies since 1996.
|
| - Beanie babies take up alot of space, driving demand for
| self-storage facilities.
|
| - When sold on the internet, consider the electricity, excess
| heat, etc generated by Ebay, as well as the carbon footprint
| of producing and disposing of cardboard, tape, labels, etc
| and the carbon consumed in shipping them.
|
| - The human toll is real as well. At least a dozen UPS
| drivers have been seriously injured while delivering beanie
| babies.
| pulse7 wrote:
| So on one hand Elon Musk is buying bitcoins which consumes so
| much energy and on the other hand the same Elon Musk is promoting
| "green energy" with Teslas...
| dstick wrote:
| Question that came to mind after reading the headline: could this
| become a future reason for governments to criminalise the trading
| / use of Bitcoin because of negative environmental effects?
|
| On the surface it seems the value of Bitcoin is directly tied to
| its energy consumption and thus environmental harm.
|
| I get that Bitcoin itself is decentralised and cannot be banned
| outright. But could it be neutered in such a way that renders it
| more and more worth / useless?
| corobo wrote:
| The Bitcoin guy is going to be the second place after Thomas
| Midgley Jr [1][2] in terms of most damage done to Earth by an
| individual I reckon.
|
| Is there no way to slim down the resource requirements to cut
| electrical use? (without breaking everything Bitcoin of course)
|
| -
|
| [1] He played a major role in developing leaded gasoline
| (Tetraethyllead) and some of the first chlorofluorocarbons
| (CFCs)
|
| [2] Environmental historian J. R. McNeill opined that Midgley
| "had more impact on the atmosphere than any other single
| organism in Earth's history"
|
| https://en.wikipedia.org/wiki/Thomas_Midgley_Jr.#Legacy
| ghego1 wrote:
| I was thinking exactly the same. I would be in favor tbh.
|
| If the government is allowed to dictate how my car must be
| built in order to make it more environmentally friendly, I
| don't see why it shouldn't be able to dictate how my blockchain
| must be built in order to make it environmentally sustainable.
|
| This wouldn't mean banning blockchain altogether. It would
| entail banning only those forms of distributed consensus that
| are not energy efficient.
|
| Proof of work (POW) is by definition inefficient from an energy
| perspective. You have to prove to have spent a lot of resources
| to be trusted. There's no excuse for this from an environment
| point of view, even if, admittedly, from a technological
| perspective is quite a marvel.
|
| I wouldn't be surprised to know that those defending bitcoin on
| this front are biased because they hold some quantity of crypto
| based on POW.
| Taek wrote:
| Government regulation should focus on how electricity is
| produced, not how electricity is used. If Bitcoin created
| pollution or dumped toxic chemicals, I would agree with you.
| But Bitcoin doesn't do either of those things, the power
| plants do those things.
|
| So save your regulations for the power plants and let the
| market figure out how to spend the electricity. If you
| wouldn't be in favor of the government regulating how much
| money can be spent on beef, or how much money can be spent on
| TVs, you shouldn't be in favor of the government regulating
| how much can be spent on Bitcoin's electricity bills.
| ufo wrote:
| Even renewable energy has externalities. They're not as bad
| as burning fossil fuels but we still want to avoid wasting
| energy on inefficient things.
| Nursie wrote:
| If governments banned the on/off ramps to normal currency, then
| yes it would be effectively neutered. There is an audience that
| wouldn't care, but it's a small audience.
| jiriknesl wrote:
| Yes, but the narrative is that Bitcoin is innovation and any
| government against it is basically against innovation.
|
| If I wanted to neutralize it, I would do something like
| Bait&Switch. Support banks running own cryptos until point
| where general public will see no difference between BTC and
| private cryptocurrencies and leave BTC users with their
| wallets and even when it will remain legal and everything,
| the "crypto revolution" would be taken by usual suspects (the
| establishment).
|
| However, I wouldn't like to see it. I prefer world currency
| to be run by nerds over bankers and politicians.
| Nursie wrote:
| As the other commenter says - nobody would care about
| those, because the only reason people are interested is the
| speculation. Stable cryptocurrencies are really only of
| interest to a small group of decentralisation fetishists,
| and stable, centralised cryptocurrencies are of interest to
| basically nobody.
| tal8d wrote:
| Canada actually tried that, at least once - maybe twice.
| When it became clear that the government was talking about
| a pre-mined, non-transparent, centralized fedcoin -
| everybody laughed and then ignored it.
| snickms wrote:
| I think both the article and this comment miss the point. If we
| generated power cleanly in the first place, there would be far
| less environmental damage everywhere.
|
| The fact that Bitcoin now uses half the power of Youtube (from
| a terribly unreliable estimate) should not be such a
| distraction from the real problem IMHO.
|
| Terribly unreliable estimate:
|
| https://www.google.com/search?q=what+is+the+total+power+cons...
| peteey wrote:
| Yes. Holding gold in the US was illegal due to executive order
| 6102.
|
| There's no need for mental gymnastics of blaming energy. Just
| one powerful guy says "no" and poof, its illegal. Now laws or
| logic required.
|
| There was an exception for collector coins and jewelry
| pradn wrote:
| It's not mental gymnastics to have a legitimate concern about
| energy usage.
| RGamma wrote:
| Especially when the economic value provided by that
| consumption is virtually zero (net negative with
| externalities).
|
| I liked the idea of bitcoin when it came out, but as per
| usual things have just gotten out of hand from there.
| gruez wrote:
| Are there similar concerns about the pollution produced by
| gold mining? eg. "we should ban gold because it's so toxic
| to mine!"
| tokai wrote:
| Yes ofc. Nobody thinks mining is a clean industry.
| dd36 wrote:
| And gold is useful.
| gruez wrote:
| Almost half of the world gold demand is for
| speculative/investment purposes[1]. If you consider
| jewelry to be speculative as well (at least partially,
| since if you only cared about appearance you could just
| plate it), the vast majority isn't "useful".
|
| [1] https://www.statista.com/statistics/299609/gold-
| demand-by-in...
| avh02 wrote:
| > Almost half of the world gold demand is for
| speculative/investment purposes
|
| fair (and I think gold as a "beautiful" metal is dumb),
| but the other half of the usage (on your claim) is for an
| array of productive things. I don't see wires, heat
| reflectors, etc being made out of bitcoin.
| gruez wrote:
| >but the other half of the usage (on your claim) is for
| an array of productive things
|
| It's far less than that. Only 7.48% is definitely useful
| (under "technology").
| gruez wrote:
| There might be _some_ concerns (eg. "wow gold mining is
| dirty, we should do something about it"), but I
| personally haven't seen anything close to "we should ban
| gold".
| FrozenSynapse wrote:
| because gold is useful, bitcoin only has speculative
| value
| gruez wrote:
| This is addressed in a sibling comment.
| https://news.ycombinator.com/item?id=26089473
| SpicyLemonZest wrote:
| There are. They're not super present in the public
| consciousness because they're drowned out by the concerns
| about the prevalence of child labor in many countries'
| gold mines.
| devoutsalsa wrote:
| After all the Bitcoin is mined, it will be the greenest crypto
| currency, yes?. What if we just accelerated the mining, or made
| them all available at once. Problem solved? Truth be told, I
| really don't know what I'm talking about. It just sounded good
| in my head.
| Kbelicius wrote:
| Even when all bitcoins are mined mining has to continue.
| therealEleix wrote:
| Impossible due to how cryptocurrency works. In any
| cryptocurrency there is something called an "emissions
| target" which will only up to X amount of coins to be
| "released" on the discovery of a new block. This is also
| compounded by the fact that even if you did try to accelerate
| the mining by adding more powerful nodes into the network,
| the network would automatically adjust the difficulty in
| order to keep blocks spitting out at the predetermined time
| of 10 minutes per block.
| MereInterest wrote:
| Nope. Bitcoin transactions require wasting energy. It is
| built into the very fabric of bitcoin. Currently, the energy
| wasters ("miners") are compensated by the minting of new
| bitcoins, and some transaction fees. As the number of
| bitcoins asymptomatically approaches it's maximum, the energy
| wasters are still compensated, but more and more through
| transaction fees.
| theblazehen wrote:
| Better solution would be to choose a proof of stake
| cryptocurrency instead
| Twisell wrote:
| Nice edit : >Truth be told, I really don't know what I'm
| talking about. It just sounded good in my head.
|
| I sincerely wish more people had your ability for
| introspection!
| high_density wrote:
| break the hash algo...?
| ForHackernews wrote:
| We can only hope so. There are new proof-of-stake
| cryptocurrencies that don't have this massive environmental
| downside. The only people who should oppose replacing BTC with
| some other technologically and ecologically superior coin are
| bitcoin bagholders trying to protect their "investment" in this
| Ponzi scheme.
| jiriknesl wrote:
| Will anyone criminalise the US army because they use lots of
| energy?
| https://en.wikipedia.org/wiki/Energy_usage_of_the_United_Sta...
|
| The answer: they might try, but good luck with that.
| pogorniy wrote:
| Can US live without army? Can it live without bitcoin?
| jf22 wrote:
| We always have to take into account the usefulness of what we
| spend energy on.
|
| It's not as simple as calling out the top energy users and
| saying we should start there.
| itsoktocry wrote:
| > _Will anyone criminalise the US army because they use lots
| of energy?_
|
| Ah yes, the old trope that people use the US dollar because
| they are forced to.
|
| Meanwhile, back in reality, people around the world are
| desperate to get their hands on USD for commerce, because
| it's easily transacted, accepted and valued _anywhere_. You
| know, kinda like Bitcoin purports to be, but way more common.
| jiriknesl wrote:
| Of course, it is everyone's taste. One values USD more and
| other BTC more. Objectively, so far, BTC was a better
| investment. And given some 80% of BTC was already mined and
| there will be no more BTC ever while 20% of USD was printed
| this year (edit: sorry, in 2020), I undestand why some
| people stash Bitcoin. I have maybe 0.5% of my net worth in
| it, but I am very happy for those 0.5%.
| eeZah7Ux wrote:
| The economical and political power of the US is the reason
| for that. And the military might is what backs up the
| political power.
|
| The same pattern repeats itself in history: those with the
| biggest army popularize their culture, language and coin.
| The Roman Empire is a good example.
|
| See https://en.wikipedia.org/wiki/Hegemony
| JumpCrisscross wrote:
| So how do we explain international use of the Euro and
| Swiss franc?
| lxgr wrote:
| Arguably, modern currencies are backed by the ability of
| nation states to demand tax payments in them, creating a
| steady and stable (due to being directly proportional to
| economic activity) demand for them.
|
| A currency having value abroad is arguably a side effect,
| not the main goal.
| csomar wrote:
| > could this become a future reason for governments to
| criminalise the trading / use of Bitcoin because of negative
| environmental effects?
|
| The whole point of Bitcoin is resistance to adversity. Bitcoin
| _value_ is directly correlated to its resistance against
| governments /agencies/bankers/regulation or anything else that
| wants to shut it down. If you can wrap your head around that,
| you'll understand why making bitcoin more eco-friendly from a
| centralized government or organization will suddenly make it
| less valuable.
| IgorPartola wrote:
| Slightly off topic, but does anyone have any good resources on
| how alternative consensus protocols work, like proof of stake and
| proof of importance? I either see really simplistic explanations
| or ones that assume a lot of domain knowledge. I also recently
| saw a crypto coin that claims to be energy efficient, and I don't
| quite understand how that's possible without the possibility of a
| 50.1% attack.
| aspic wrote:
| You're perhaps thinking of https://nano.org ? A brief
| description of it's Open Representative Voting (ORV) consensus
| mechanism:
|
| "A consensus mechanism unique to Nano which involves accounts
| delegating their balance as voting weight to Representatives.
| The Representatives vote themselves on the validity of
| transactions published to the network using the voting weight
| delegated to them. These votes are shared with their directly
| connected peers and they also rebroadcast votes seen from
| Principal Representatives. Votes are tallied and once quorum is
| reached on a published block, it is considered confirmed by the
| network."
|
| Suggested read: https://docs.nano.org/protocol-design/orv-
| consensus/
| nightcereal wrote:
| Satoshi would be really proud of nano.
| koonsolo wrote:
| I'm a huge Nano fanboy since the RaiBlocks days. It
| definitely deserves more attention, since it's a pretty solid
| technology and was distributed pretty fairly.
|
| But even in this crypto bull market, everybody seems to
| ignore it, except for the fanboys on Reddit.
| gnrlst wrote:
| If only Nano had first-mover advantage! I'm rooting for it
| though, it's everything BTC should have been.
| leesec wrote:
| Eth prolly has the best constructed PoS system, just starting
| to roll out.
|
| https://ethereum.org/en/developers/docs/consensus-mechanisms...
| eecks wrote:
| What about Cardano? Isn't it already rolled out with >70% of
| ADA staked?
| chrisco255 wrote:
| Proof of stake is relatively simple. You agree to stake a
| minimum amount of tokens (decided on by the network) and you
| get to run a node and validate transactions. If you attest to a
| malicious block and other validators call you out on it, you
| get slashed (i.e. you lose some portion of your stake, if not
| all of it): https://ethereum.org/en/developers/docs/consensus-
| mechanisms...
|
| One of the problems with it is that it's difficult to bootstrap
| a network on a proof-of-stake system with a fair distribution.
| You end up with the pre-sale participants (i.e. VCs or
| founders) having the majority of the tokens.
|
| I think what Ethereum is doing is a decent approach. They
| started as Proof of Work, so they were able to bootstrap the
| network for 6 years and now ETH is widely distributed and no
| single holder owns more than 1% of ETH, for example. So now
| they can migrate to Proof of Stake and they won't suffer from
| the centralized allocation problem.
| alexmingoia wrote:
| How is the correct chain decided?
| chrisco255 wrote:
| https://ethereum.org/en/developers/docs/consensus-
| mechanisms...
| alexmingoia wrote:
| That page does not explain how the correct chain is
| chosen...
|
| I searched and found a blog that claims a chain is chosen
| by _trusting_ other nodes:
|
| "In PoS systems, weak subjectivity arises because the
| longest chain rule is not sufficient to determine the
| main chain due to the (nearly) costless process of
| creating an up-to-date chain. Creating up-to-date
| competing chains would take little effort in PoS as
| opposed to in PoW. Therefore, new nodes or nodes that
| have been a long time offline have to trust the
| information they receive from other nodes about which
| chain is the valid one, causing weak subjectivity.
|
| In the case of weak subjectivity, to ensure that the
| information about the valid chain is accurate, a node
| that is new or comes online after a significant period
| would have to get a recent block hash from a reputable
| source, such as a blockchain explorer, and insert that as
| a "checkpoint" into their blockchain client. This is the
| method of dealing with weak subjectivity, which relies on
| the trust with a reputable source. Although not
| completely in line with a trustless system, it shouldn't
| really be an issue unless the reputable source is
| compromised." - https://medium.com/better-
| programming/the-problems-that-ethe...
| chrisco255 wrote:
| From the page I linked:
|
| In distributed networks, a transaction has "finality"
| when it's part of a block that can't change.
|
| "To do this in proof-of-stake, Casper, a finality
| protocol, gets validators to agree on the state of a
| block at certain checkpoints. So long as 2/3 of the
| validators agree, the block is finalised. Validators will
| lose their entire stake if they try and revert this later
| on via a 51% attack."
|
| In ETH2 2/3 of 128 randomly selected validators have to
| agree. You also get slashed if your validator goes
| offline, so they factored for that case:
|
| https://ethereumprice.org/guides/article/eth-2-staking-
| risks...
|
| And at least for the beacon chain you have to sync the
| whole chain to your node before you can begin validating.
| Taek wrote:
| Nothing about Proof of Stake is relatively simple lol. Not
| the incentives, not the threat model, not the trust model,
| not the impact on the economics, not the implementation, not
| the scalable byzantine fault tolerate research.
|
| There are plenty of people who understand it well, I'm not
| saying it's outside of reach of a normal human being. But
| understanding proof of stake is not a 30 minute journey. (nor
| is understanding proof of work for that matter)
| chrisco255 wrote:
| I think it is relatively simple compared to proof-of-work
| don't you? And it's not really hard to get at a conceptual
| level even if the implementation level is far more complex.
|
| I post a deposit that says I'll be honest. If I'm caught
| being dishonest, I risk losing my whole stake.
| have_faith wrote:
| > no single holder owns more than 1% of ETH
|
| You mean no single wallet?
| chrisco255 wrote:
| No, I mean people. Unless you count centralized exchanges
| that represent thousands to millions of users' pooled ETH,
| as people. Even then, the largest of these has about 2.5%
| of ETH supply.
| have_faith wrote:
| How do you know if someone spreads their tokens across
| multiple wallets?
| TheCapn wrote:
| >no single holder owns more than 1% of ETH, for example
|
| Curious about this statement. Is this something that can be
| looked up online? I know wallets/transactions are entirely
| public so I guess its just a question of whether someone has
| made a tool to do this with ETH or other cryptos. How do
| other coins fair in the same regard? What's BTC distribution?
| LTC? Or any of their forks?
| Taek wrote:
| I believe it's fairly well established that Joe Lubin holds
| somewhere around 10% of the Eth supply. Anyone with large
| holdings is incentivized to spread those holdings across
| many accounts to avoid scrutiny.
|
| Pretty much every coin has substantial gini coefficient
| issues.
| chrisco255 wrote:
| Etherscan is the standard tool for looking up Ethereum
| wallet balances without having to run your own node:
| https://etherscan.io/ .
|
| Top Accounts by ETH Balance: https://etherscan.io/accounts
|
| #1 has 5%, but it's the wETH ("wrapped ETH") smart
| contract, that allows people to deposit ETH as the native
| token and receive wETH in return. wETH is more easily used
| for things like decentralized exchanges (https://weth.io/).
| So that's really a utility contract used by many
| applications and users.
|
| #2 is the ETH2 Deposit contract, with 2.6% of supply. These
| are stakers receiving mining rewards for participating in
| ETH2 beacon chain validation.
|
| #3 is Binance, with 2.5% of supply. They are the largest
| centralized exchange, so that 2.5% represents Binance's
| customer accounts.
|
| #4, #5, #6, are also exchanges.
|
| #7 is Compound Ether (@1.08% of supply). Compound is a
| decentralized finance savings & loan protocol, so again,
| that 1.08% represents tens of thousands of Compound users.
| knuthsat wrote:
| Yet the amount of environmental destruction and pollution done by
| Argentina to support their massive livestock industry is
| something Bitcoin will never achieve.
| abyssin wrote:
| One could argue that livestock is more useful than Bitcoin,
| since it feeds people. Of course I agree we should reduce meat
| consumption.
| K0nserv wrote:
| Two things can be bad
| knuthsat wrote:
| Cool, I guess this fast function in our code that is measured
| in ms is of same badness as this slow function in our code
| that is measured in days.
|
| Given that we are not interested in what these functions do,
| my choice would be to optimize the fast function.
|
| Electricity used by Argentina generates massive amounts of
| destruction and pollution. The electricity used by Bitcoin is
| probably not even close.
| forgetfulness wrote:
| It's a bit hard to begin arguing against someone who thinks
| that a country of people is less deserving of using energy
| than a massive online gambling scheme riddled with scams,
| that happens to consume as much energy as 45 million
| people.
|
| Where does one even start?
| knuthsat wrote:
| I'm not sure where I said what you believe I think.
|
| My opinion is that using more electricity than Argentina
| is not as dramatic as the comments make it out.
|
| Bitcoin is never going to be as destructive to the
| environment as these countries.
|
| Saying that PoW is immoral or that Bitcoin is horrible
| because of electricity use is fine. But the immorality or
| horribleness is magnitudes away from what the rest of the
| stuff using electricity does to the world.
|
| If we want to optimize something, make reductions,
| Bitcoin is at the bottom of the list, rationally.
| pcarolan wrote:
| I sold out of my position because of the energy consumption but
| more importantly that bitcoin feels now like it's 100% dependent
| on greater fools. Like a pyramid scheme, those who buy now must
| convince others to buy later to increase their wealth. It seems
| that momentum is the real driver of bitcoin price now not value.
| The end result is massive inequality especially as institutional
| investors buy in and the marketing gears begin to wind up. At
| least with an inflationary currency like USD, there's an
| incentive to work and put your money to work. Bitcoin feels like
| it mostly rewards the hoarders.
| nomoreusernames wrote:
| this is beyond stupidity. first we waste all that material and
| brainpower in stupid wars where we destroy what we build, and
| kill those who remember how. and then comes captchas and
| passwords which steal so many hours from all the humans alive.
| and now things like this, it really pisses me off tbh. this
| should be used to find cures to peoples suffering. like the value
| should be real.
| _alex_ wrote:
| you must have had some REALLY bad captcha experiences to put it
| on the same scale as war
| meirelles wrote:
| It's not about today, but tomorrow. Inefficiency is way easier to
| fix than break paradigms. How much it spends per transaction now
| isn't that relevant.
| Miner49er wrote:
| How much of that would be wasted otherwise though? You want cheap
| electricity to mine Bitcoin, so any energy that would otherwise
| be wasted is ideal. Before Bitcoin, some energy was literally
| just thrown away. With Bitcoin, it can be put to use for a profit
| instead.
| pimterry wrote:
| Quite a few people have noted that this is a lot, but there are
| caveats (how much does the _whole_ banking system use, how much
| is cryptofinance worth to society, etc etc).
|
| There's a more important point though: you can have
| cryptocurrencies without this horrendous waste of energy.
|
| There are functional cryptocurrencies that are _not_ backed by
| proof-of-work, and don't have the same catastrophic environment
| impact. Notable candidates include Stellar (backed by Stripe [1],
| using a consensus protocol with a distributed web of trusted
| servers) and Cardono (which includes Ethereum-like functionality,
| using proof-of-stake). They're newer, and they will evolve
| further, but they're already functional and dramatically more
| efficient (by many orders of magnitude).
|
| They're not even that niche: Cardono is #4 by market cap &
| Stellar is #12 [2].
|
| There are interesting arguments for crypto being valuable, but
| there are very few arguments for Bitcoin or proof-of-work
| specifically is valuable (and for why the current price isn't a
| huge bubble). Burning this quantity of power is tragic and
| totally unnecessary.
|
| [1] https://stripe.com/blog/stellar
|
| [2] https://coinmarketcap.com/
| andreygrehov wrote:
| Is consuming electricity a bad thing?
| blondie9x wrote:
| Can we please regulate Bitcoin the way we regulate over heavy
| consumption and pollution industries? This doesn't even take into
| account the production and mining of rare earth materials to
| power the super computers mining Bitcoin.
| bjd2385 wrote:
| Does anyone have any figures on what regular banking systems use
| for accepted/official currencies? I feel like this has blown up
| so much that it makes sense to compare and contrast.
| tgv wrote:
| I have the idea that banking for a country the size of
| Argentina uses much, much less energy than bitcoin mining, yet
| serves more people than bitcoin.
| unkulunkulu wrote:
| I doubt counting this per transaction volume will yield close
| results, mining is computation intensive by design. Absolutes
| are a curiosity, but comparing those is not constructive imho
| Nursie wrote:
| Bitcoin provides very few of the services that regular banking
| systems do, and to a far, far smaller audience. Unless that's
| taken into account, such a comparison is meaningless.
| xnx wrote:
| Am I wrong that resources spent mining Bitcoin aren't that much
| different from money spent on else? Is the impact of buying $1000
| worth of concrete, airline flights, tomatoes, iPhones, etc. etc.
| significantly different?
| JustFinishedBSG wrote:
| If we could burn bitcoin apologists we would have infinite energy
| because you are the densest bunch I've ever met
|
| https://en.wikipedia.org/wiki/Climate_change
| paulpauper wrote:
| i wish I could downvote or report this threat of violence
| formerly_proven wrote:
| > you are the densest bunch I've ever met
|
| Indeed!
| ttt0 wrote:
| Damn, I knew the governments hated cryptocurrencies and will
| try to shut it down at some point, but I haven't realized there
| was such hostility towards it.
| Spooky23 wrote:
| It has attention, so it's a sexy thing to snark at.
|
| When the Elon boom bursts, folks will be back to complaining
| about cow flatuence, birds getting killed by solar panels, or
| whatever the shiny environmental crisis of the day is.
| K0nserv wrote:
| Consider the position of someone who believes bitcoin adds
| zero(or even negative) value, but consumes astronomical
| amounts of, often dirty, electricity while the world faces a
| climate emergency. Further, since this is a technical forum,
| all of this work to compute trillions of SHA hashes. On the
| flip side you have a bunch of peopple who rely on bitcoin as
| an investment vehicle and are therefore very invested in its
| continued growth.
|
| It's understandable that emotions run high about this topic
| imo
| ArtTimeInvestor wrote:
| The mining of Bitcoin uses this amount of electricity.
|
| How much resources does the mining of gold use?
|
| Afaik, 3000 tons of gold are mined per year. Which is worth about
| $150B. I would expect the mining uses resources of about $150B as
| well?
|
| By my calculation, the value of bitcoins mined per year is $15B:
|
| 900 Bitoins per day = 328500 Bitcoins per Year
|
| 328500 * $45000 = $15B
|
| So I would expect that Gold mining uses about 10x as much
| resources as Bitcoin mining.
| avaldeso wrote:
| What's your point? Gold is useful. One of the most versatile
| metals. You can find gold almost en every electronics, or
| medical implants, or scientific equipment, or in space
| telescopes. BTC isn't even useful data. It's just a number.
| What an utterly disingenuous comparison.
| emteycz wrote:
| Bitcoin is useful too. It's impossible to _quickly_ and
| reliably transfer money between many places (e.g. Africa and
| Europe, USA and Africa, USA and EU) by any other way than
| Bitcoin.
|
| African banks will steal your money if they have a chance to
| claim it was lost in transport. Transfers between EU and USA
| take so much paper and gasoline (to travel to banks) that
| Bitcoin must be more ecological.
|
| And transfers between many country pairs are totally
| impossible without Bitcoin.
| avaldeso wrote:
| There's levels of usefulness. Not dissing your argument but
| gold is still way more useful. There's has to be better
| ways to solve the problem you mention. Like they say,
| Bitcoin is a solution looking for a problem.
| emteycz wrote:
| Gold is not much useful to millions of Nigerians while
| Bitcoin is praised daily there. I think if there was
| another solution, we would be using it already.
| px43 wrote:
| Please put on your critical thinking hat for a minute.
|
| Using electricity is not the same as contributing to carbon
| emissions. Bitcoin is mostly mined in areas overflowing with
| excess green energy, and thus contributes negligibly to carbon
| emissions.
|
| The idea that all electricity generation is bad and therefore all
| electricity usage is bad is completely ridiculous. Instead of
| working so hard to figure out how to hate on some technology you
| feel like you missed out on, maybe try understanding it for a
| minute, and realize the massive net benefits it offers to
| society.
| kwanbix wrote:
| Do you have numbers to back what you are saying or you are just
| pulling numbers out from thin air?
| JumpCrisscross wrote:
| > _Bitcoin is mostly mined in areas overflowing with excess
| green energy_
|
| I thought it's mostly mined in China?
| trogsworth wrote:
| My understanding is that there's a surplus of hydroelectric
| dams, that were built far from any reasonable amount of
| electricity demand, which is why there's excess green energy
| in (parts of) China.
| JumpCrisscross wrote:
| > _Bitcoin is mostly mined in areas overflowing with excess
| green energy_
|
| Source? I thought it's mostly mined in China?
| apexalpha wrote:
| Yes, and most of the mining in China happens in Sichuan,
| which has considerable renewable energy from hydro. I think
| maybe 95%+ of Sichuans electricity is hydro.
| emteycz wrote:
| Exactly! Seems like your knowledge about Chinese electricity
| might be outdated.
| Grustaf wrote:
| > Using electricity is not the same as contributing to carbon
| emissions
|
| Until all electricity comes from renewable source, then yes it
| is.
|
| > The idea that all electricity generation is bad and therefore
| all electricity usage is bad is completely ridiculous
|
| All _frivolous_ electricity usage is obviously bad.
| minikites wrote:
| >realize the massive net benefits it offers to society
|
| Surely you can list some of them.
| paystaxes wrote:
| Preservation of wealth.
| iagovar wrote:
| I think that you miss the tradeoff. By using so much
| electricity, we have:
|
| 1) It's not being stored (where they do). In some places they
| pump water or use other methods, which help to aliviate
| demand/offer tension when needed.
|
| 2) It's actually pushing prices up in the demand side, which
| means it's making everything else more expensive.
|
| 3) If Bitcoin really becomes widely adopted, this problem will
| increase by who knows how much.
|
| In a setting where we're worried about the impact of our energy
| pipeline, the use of bitcoins goes the other way around.
| doctorwho42 wrote:
| (1) power is not free, even green energy. It has production,
| labor, and material costs.
|
| (2) using the term 'excess' green energy is a false statement.
| There is no such thing as excess green energy while a bulk of
| the grid is still coal/gas/etc.
|
| (3) Bitcoin has led to a drain on GPU availability and in turn
| on the finite capacity of our semiconductor fabs. Arguably for
| nothing.
| emteycz wrote:
| > There is no such thing as excess green energy while a bulk
| of the grid is still coal/gas/etc.
|
| Are you saying transporting and storing electricity is free
| or easy? Can you source that please? As far as I know many
| megawatts of electricity go to literal waste every day
| because it's actually extremely hard to store or transfer.
|
| > power is not free, even green energy. It has production,
| labor, and material costs
|
| Indeed. And thanks to Bitcoin powerplants can be paid for
| electricity that will be generated anyways but would go to
| waste, thus making green energy cheaper.
|
| > Arguably for nothing.
|
| For trustless, quick and reliable transfers of money, which
| are for example improving the life of many Nigerians.
| sygma wrote:
| (3) reveals that you are not as well informed as you make it
| sound. Bitcoin hasn't been mined on GPUs for years.
| ajmurmann wrote:
| The only real reason to be upset about this is carbon emissions.
| If we could properly price those into the price of energy and
| products the Bitcoin energy consumption would be a non-topic
| qznc wrote:
| Bitcoin every consumption halves every two years since the mining
| profit halfs. Thus mining bitcoins becomes less profitable and
| thus more energy efficient over time.
|
| In the other, if the price increases faster than the mining yield
| drops, efficiency is decreased.
| celticninja wrote:
| This is incorrect. The mining reward halves every 4 years, but
| if the price of bitcoin goes up then so does the value of the
| reward. Also it is a bit of an arms race so more power is
| required to power more machines,to mine the same number of
| bitcoin.
| epalm wrote:
| Forgive my ignorance but aren't there a finite number of
| bitcoins? A casual search says the world has mined 18.5 million
| out of a total of 21 million, after which, doesn't the mining
| process stop, along with the current environmental impact?
| FabHK wrote:
| Indeed. The "Coinbase" mining reward (currently 6.25 BTC per
| block mined) halves every 4 years. The theory is that the
| proportion of fees (currently only 10%-20% of the total reward
| miners make) will increase and make up for the reduction in
| coinbase.
|
| Currently, a successful block makes 6.25 BTC * 45000 BTCUSD =
| 280k USD in Coinbase, or around 100 USD per transaction, plus a
| 10-20 USD fee per transaction.
|
| As Coinbase drops (or BTCUSD drops), users will have to pay
| around 100+ USD per transaction in fees, or the rewards to
| miners will drop and some will go offline, resulting in a
| reduction in difficulty and less energy wasted.
| detaro wrote:
| No it doesn't, since the primary purpose of mining is
| processing transactions, not creating new bitcoins. The created
| bitcoins are merely an incentive to mine.
| chrisco255 wrote:
| Bitcoin has a halving mechanism, every 4 years the rate of new
| BTC mined drops by half, so that BTC will take over a century
| to actually reach 21 million (2140).
| celticninja wrote:
| Mining is what powers transactions as well as generating new
| coins. Once all 22 million coins are mined it is assumed that
| transaction fees will replace the coins miners earn . So mining
| will always remain in some form or another, and also the size
| of the network is what makes it safe.
| nickpp wrote:
| How much energy does watching porn consume? Playing video games?
| Watching a movie? Browsing Facebook? Using a ski chair? Visiting
| an amusement park? Going in vacation? Cooking your favorite type
| of food? Making ice cream? Driving to your friends? Listening to
| music? Concerts? Having a party? Banking? Casinos?
|
| As a species we use energy to meet our goals. Those goals may be
| situated anywhere in our hierarchy of needs. Some are essential,
| some could be considered trivial. But they are all important for
| their consumers.
|
| Bitcoin is now considered by some important for our future
| finance system. While not everybody agrees, this may be more
| important than countless other ways we use energy, for much more
| trivial reasons.
|
| Being judgmental about how others use energy they pay for reeks
| of hypocrisy, virtue signaling and holier-than-thou attitude.
| starclerk wrote:
| You're getting a lot of replies but I don't see anyone
| answering the initial questions. Some really rough math for
| playing video games:
|
| Assuming I'm playing with someone across the country, I hop 13
| routers in a quick traceroute.
|
| Assuming each router is commercial hardware (~400W) and my
| traffic completely saturates them, that's 5,200W.
|
| Plus the two machines at the end of each line, assuming they're
| beefy gaming PCs/servers with 1,000W power supplies at 100%
| load just for this game. That's 2,000W.
|
| Playing a 30 minute Starcraft game comes to 3.6kWh, or two
| orders of magnitude less than a bitcoin transaction. It's
| almost certainly less than that since my assumptions were very
| conservative.
|
| ~~~
|
| For something live like a concert, a 54,000 sqft hall uses
| about 1,100 kWh of power per day (lighting, HVAC). Plus 15kW of
| speakers for a 6 hour concert is 1,190 kWh. Divided by the 6000
| people attending, is 0.2 kWh per attendee. Adding a 10 mile
| solo drive per person is about 3 kWh. Or again about 2 orders
| of magnitude less.
|
| ~~~
|
| These aren't good comparisons when I could do hundreds of each
| of the activities you listed for the cost of one transaction.
| nr2x wrote:
| If you combine the energy costs of delivering streaming video
| and the client side costs of playing video and executing
| JavaScript I have no doubt porn far outstrips Bitcoin. Hell, I
| bet JavaScript bloat from adtech alone and exceeds the totally
| energy budget of France.
| starclerk wrote:
| There are 3.4 billion internet users.
|
| It takes about 30 W to watch video in a browser [1].
|
| Assuming every internet user watches 85 minutes of video per
| day [2] (517 hr/year), video consumption is 52 TWh per year.
| Or less than half of than the bitcoin network.
|
| Google uses 12 TWh per year [3]. Assuming Google is entirely
| focused on serving the world's video (it likely could), that
| still is ~half of the bitcoin network.
|
| (France consumes about 480 TWh per year [4])
|
| [1] https://techcrunch.com/2013/06/05/microsoft-internet-
| explore...
|
| [2] https://www.marketingcharts.com/digital/video-110520
|
| [3] https://www.forbes.com/sites/robertbryce/2020/10/21/googl
| es-...
|
| [4] https://en.wikipedia.org/wiki/Energy_in_France
| nr2x wrote:
| Seems like I lost my bet if those numbers are correct,
| kudos on doing the math!
| dixego wrote:
| If maintaining the infrastructure for something a miniscule
| percentage of the world's population benefit from requires more
| energy than entire countries, surely it's worth interrogating
| whether the benefits outweigh the costs?
| csomar wrote:
| True. Let's let one guy, then, decides how our energy should
| be consumed.
| loceng wrote:
| Maybe that guy deciding shouldn't have financial
| motivation, incentive, e.g. be part of the MLM scheme that
| they're incentivized to have succeed regardless of the
| costs, e.g. the guy having a conflict of interest?
| CydeWeys wrote:
| But how do you set differential electricity prices by type of
| use? That seems nightmarish to try to enforce. So you
| criticize the miners, but what can actually be done about it?
| sharker8 wrote:
| We do that somewhat by limitations in the grid itself. A
| simple example is that different kind of outlet you use for
| your washer dryer machine.
| mikestew wrote:
| The kind of outlet one sees for 240V is to keep you from
| plugging your 120V iPhone charger into it, not because
| it's any kind of limitation on the grid. You can have
| European-style (or Australian, or Vietnamese, or...)
| outlets in your U. S. house if you like, and pull 220V
| out of every outlet in your house, you'll just have to do
| a ton of rewiring. (Theoretically; if I've forgotten
| something, it's because I've never heard of anyone
| converting a U. S. house to use non-U. S. appliances.)
| suprfsat wrote:
| Is there such a thing as a 120V-only USB charger?
| mikestew wrote:
| Well, if we're going to get all pedantic and stuff, I'm
| pretty sure those old iPhone chargers came with a non-
| swappable U. S. 120V plug. But for the life of me I can't
| find one lying within arm's reach at the moment.
| sharker8 wrote:
| Agreed, but there's more to it I think. The primary
| design goal of the system is don't accidentally start a
| fire or electrocute yourself. The other effect however is
| the inverse, a mechanism by which the power company can
| come up with the right distribution of transformers to
| get the power to your home. If you have not been wired by
| an electrician to handle that much electricity, your
| block may not be sufficiently wired and fused to deliver
| that much. Because presumably the electrician checks such
| things before putting buildings on the grid.
| ragebol wrote:
| What's different about it? All my 230v devices use the
| same outlet and plug. Or is that on a different voltage
| and current, power rating alltogether?
| suprfsat wrote:
| If you don't have a 240V circuit handy you can just find
| two 120V circuits on opposite phases and wire them
| together
| thebean11 wrote:
| > interrogating whether the benefits outweigh the costs
|
| What does this mean, in practice? Who investigates and what
| is the outcome?
|
| Do the things OP listed above warrant a similar
| investigation?
| JumpCrisscross wrote:
| > _Who investigates and what is the outcome?_
|
| The public? Something that benefits a few at the expense of
| the many is the canonical case for regulation.
|
| (I don't think we should ban or even really regulate
| Bitcoin. Not at this point.)
| sombremesa wrote:
| > at the expense of the many
|
| I think you've misunderstood something. Those people are
| buying their own electricity...at their own expense. So,
| you want to bring arbitrary restrictions to electricity -
| as if we didn't have enough issues with net neutrality
| already.
| umanwizard wrote:
| The market could solve this problem properly if there
| were a global carbon tax, but unfortunately, there isn't.
| devlopr wrote:
| Assuming bitcoin is using carbon poluting sources. Some
| of the bigger miners in China use hydro/dam energy. The
| miners in Iceland are using geothermal.
| beckingz wrote:
| Except that most of the energy is subsidized by China or
| other countries.
| jevgeni wrote:
| Ah, so they are paying for the adverse effect on the
| climate. That's alright then. /s
| sombremesa wrote:
| We have solar power, hydroelectricity, nuclear power,
| wind turbines...if the mere fact of electricity existing
| has an adverse effect on the climate, I can tell you one
| thing:
|
| It's not bitcoin's fault.
| jevgeni wrote:
| Cool. 63% if electricity still comes from fossil fuels:
| https://ourworldindata.org/electricity-mix
|
| So, ca. 76 of those TWh/year are still carbon heavy.
| dumbfounder wrote:
| from @umanwizard:
|
| >The market could solve this problem properly if there
| were a global carbon tax, but unfortunately, there isn't.
|
| "Solve it"? How so? Crypto mining is largely powered by
| renewables (40% according to one source in Sep 2020). It
| is a race to find the most energy efficient way create
| power to make it worthwhile to mine, which has some
| positive effect on society by driving innovation. No idea
| if that is a net positive, but this is not black and
| white issue at all the way many here are framing it.
| acdha wrote:
| > Crypto mining is largely powered by renewables (40%
| according to one source in Sep 2020).
|
| That's one source and less than half does not mean
| "largely" in standard English usage. More importantly,
| almost nobody uses Bitcoin so a key question would be how
| that'd change if usage could be scaled up to, say, even
| 0.1% of daily transactions.
| UncleMeat wrote:
| For bitcoin to use an equivalent amount of carbon as visa
| per transaction, it'd need to be 99.9999% powered by
| renewables and visa would need to be 100% powered by
| fossil fuels.
| Grustaf wrote:
| I don't think it matters who you ask to investigate it,
| everyone except bitcoin users themselves will realise that
| it's an absurd waste of electricity, for very little added
| value.
| thebean11 wrote:
| So things that the majority don't like / understand
| should be illegal because they use resources? You can't
| see the issue with that?
|
| And that still doesn't really answer whose job it is to
| ban all these things, and what mechanism would be used to
| enforce it.
| jevgeni wrote:
| You conveniently omit the social cost.
|
| Enforcing could be done via banning any payment with
| bitcoin.
| devlopr wrote:
| Well not really. Most people buy coins because they
| believe the price will climb and never use them for
| buying. For the retailers who accept bitcoin many are in
| smaller countries where the law wouldn't apply and many
| semi-legimate uses (ordering weed by mail) would continue
| to accept payment this way because their activity is more
| illegal (carrys a bigger punishment) than the new bitcoin
| law would.
| jevgeni wrote:
| What is the point of BTC price climbing if you wouldn't
| be able to convert it to cash or pay for goods?
| Grustaf wrote:
| If the majority is 99% and that other fraction of 1% use
| an ENORMOUS amount of resources on their hobby, then yes
| it is reasonably to consider making it illegal.
| africanboy wrote:
| > So things that the majority don't like / understand
| should be illegal because they use resources?
|
| If they produce a net negative for the majority and only
| benefit a small number of people, then yes.
|
| We don't go around driving tanks, do we?
|
| I love tanks, but there's a reason why we can't drive
| them to go to the mall.
| newswasboring wrote:
| > So things that the majority don't like / understand
| should be illegal because they use resources? You can't
| see the issue with that?
|
| There is a difference between majority not liking and
| only like 0.2% of the world consuming more energy than _a
| whole country_. There are 5million bitcoin users, they
| are consuming more electricity than 44 million people's
| daily lives. Think about the scale of imbalance here.
| jeromegv wrote:
| It is good practice to question if a technology is worth
| the social cost of wasting so much electricity. This is
| literally how Bitcoin is built, as it keeps growing, it
| keeps consuming an insane amount of electricity, for a
| very little amount of transactions per day. This is call
| ethics, doesn't mean it should be illegal, but there is
| value in questioning it and investigate if perhaps there
| are better solutions than wasting energy.
| Taek wrote:
| "for very little added value"
|
| That's an awfully subjective claim and one I find to be
| contentious. I think even today Bitcoin's impact on
| global politics has already provided massively more value
| to global society than all of the resources it has spent
| on electricity.
| Grustaf wrote:
| What positive impact on global politics is it that
| Bitcoin has had that motivates all the energy spent?
| beckingz wrote:
| Money laundering
| Erlich_Bachman wrote:
| Again, reading the original comment, you can apply your
| very same line of reasoning to " Playing video games?" or
| the rest of the examples. Should all the people who don't
| play videogames also get together and ban gaming because
| they themselves don't benefit from it and it consumes
| "too much"?
| Grustaf wrote:
| I think video games are a silly waste of time but I don't
| necessarily want to outlaw it. If playing one round of
| Mario Kart consumed several megawatt hours of energy
| though, I don't think anyone would want it to be allowed.
| newswasboring wrote:
| Why do you stop taking into account scale? Gaming as a
| whole does provides entertainment to a large number of
| people and thus consumes large amount of energy. While
| bitcoin is providing benefits (real or imagined) to a
| very small fraction of people and consuming more
| electricity than a _whole country_. If red dead
| redemption was played by 10 people but consumed
| electricity equivalent to 100 people's daily life then we
| would be talking about regulation there too.
|
| BTW, afaik bitcoin has 5million users and Argentina's
| population is 44 million. Also, this energy consumption
| by 44million people includes all the activities you can
| think of to add to this argument.
| ctdonath wrote:
| Scale does not inherently excuse. Energy for gaming could
| be routed to feeding/warming the poor; should 100 die of
| starvation/hypothermia so that 1,000,000 can play
| Fortnite? do you really want to continue such reasoning?
| newswasboring wrote:
| Yes I do. This is why my country had a space program
| before we solved all our social issues. You need to look
| at how much good an activity actually does vs how much
| resources it will consume. Entertainment is a good thing
| so is space exploration. But ISRO did not consume more
| resources than all other social improvement plans
| combined. Bitcoin is consuming more energy than the daily
| lives of a whole country. _Combined_
| ha4fsd3fas wrote:
| Gaming is also consuming more energy than the daily lives
| of a whole country __Combined__. Entertainment is a good
| thing, but watching a movie consumes a lot less resources
| than playing games so why are games acceptable? What
| about VR? VR uses a lot of GPU computations for something
| a small fraction of people use. Surely people playing VR
| could use some other form of entertainment that is less
| resource consuming.
|
| Or then we let people use their own resources the way
| they see fit.
| Grustaf wrote:
| Gaming uses vastly less energy per person.
| africanboy wrote:
| in your example 100 bitcoin users would let a million of
| people die of starvation/hypothermia so that they can
| play blockchain.
|
| scale in general does not excuse, but consumption per
| capita should.
|
| A Ps4 consume around 100 watt/hour
|
| If you keep it on 24 hours a day, 7 days a week, is 876
| KW/year.
|
| Which is not very much.
|
| At 120Tw/year with 5 million users BC consumption per
| capita is an astonishing 24,000kw/year (or 24Mw)
|
| Every bitcoin user consumes 27 times the energy consumed
| by a (quite powerful) gaming console turned on non stop
| (which is never the case)
|
| That's why there have been campaigns around the World to
| replace incandescent bulbs with the energy efficient
| ones.
|
| Compared to the traditional ones the new light bulbs can
| save up to the 80% of the energy, compared to a
| bitcoiner, a non bitcoiner can save ~97% of the energy by
| simply playing videogames.
| thebean11 wrote:
| > A Ps4 consume around 100 watt/hour
|
| You need to take in the manufacturing costs, costs to
| develop software, costs to run servers too, otherwise
| you're only measuring marginal energy consumption for a
| new user.
|
| Marginal energy consumption for a new Bitcoin user is
| probably small too.
| africanboy wrote:
| The website linked is actually measuring the amount of
| energy that BC _is using_ right now to operate.
|
| It's not the total amount of energy used to create the BC
| network, the software, the HW and everything else.
|
| https://cbeci.org/
|
| > _The Cambridge Bitcoin Electricity Consumption Index
| (CBECI) provides a real-time estimate of the total
| electricity load and consumption of the Bitcoin network.
| The model is based on a bottom-up approach initially
| developed by Marc Bevand in 2017 that takes different
| types of available mining hardware as the starting
| point._
|
| > _The first number refers to the total electrical power
| consumed by the Bitcoin network and is expressed in
| gigawatts (GW). This figure is updated every 30 seconds
| and corresponds to the rate at which Bitcoin uses
| electricity. The second number refers to the total yearly
| electricity consumption of the Bitcoin network and is
| expressed in terawatt-hours (TWh). We annualise Bitcoin's
| electricity consumption assuming continuous power usage
| at the aforementioned rate over the period of one year.
| We apply a 7-day moving average to the resulting data
| point in order to make the output value less dependent of
| short-term hashrate movements, and thus more suitable for
| comparisons with alternative uses of electricity._
| thebean11 wrote:
| The parts of PS4 and Bitcoin that are expensive are
| different. It makes zero sense to compare the expensive
| part of Bitcoin to the cheap part of PS4
| foepys wrote:
| Do you think the bitcoin mining rigs materialize
| themselves out of thin air? Those things get constantly
| replaced because they get inefficient due to the rising
| hashrate and advancements in chip efficiency.
| thebean11 wrote:
| The ratio of energy spent running to energy spent
| producing is orders of magnitude higher for bitcoin rigs
| than for PS4s.
|
| I disagree the comparison is useful.
| africanboy wrote:
| that's simply because a PS4 is orders of magnitude more
| energy efficient than BC and was designed to be like that
|
| BC on the other hand are very expensive in terms of
| energy consumed, by design
|
| BTC don't make any sense energy wise and in the end don't
| make any sense to invest in something designed to burn
| energy in the long run, especially now that we are trying
| to fix the mistakes of the past
| boh wrote:
| No you really can't. Gaming employs large amounts of
| people, sustaining economic growth as well as innovation
| (GPU development was originally sustained by demand
| related to gaming) . Bitcoin has little economic impact
| relative to its energy use.
| ctdonath wrote:
| The money spent by interested parties indicates
| otherwise.
| s1artibartfast wrote:
| Money spent by interested parties only indicates that
| there is money to be made. It doesn't mean anything about
| the usefulness of bitcoin.
| boh wrote:
| Feel free to present a case where the economic impact of
| gaming is less than Bitcoin (feel free to include every
| crypto-currency ever made in that comparison).
|
| Market caps in speculative, unregulated markets aren't
| indicators of economic relevance. Gaming facilitates
| billions in production on a yearly basis. Crypto related
| activity produces very little in comparison. And no,
| someone buying billions worth of Bitcoin doesn't count
| (just like people buying GameStop stock doesn't reflect
| the economic impact of the gaming industry).
| janoside wrote:
| Rather than a case, how about a framework to evaluate
| going forward: the market. Given enough time, I'm pretty
| sure the market will root out the "real value" of bitcoin
| and keep assessing the "real value" of gaming.
|
| Let's watch for 5-10 years. If you're right about
| bitcoin, I bet its price will be much lower and you can
| gloat. If you're wrong, I bet its price will be much
| higher (because I agree with the basic assessment that
| gaming "feels" much bigger today). Luckily, we can both
| place our bets based on our best assessments of the
| future.
|
| How confident are you that you can present a substantive
| case _against_ bitcoin that matches the diligence that
| Ross Stevens has done for years?
| https://www.youtube.com/watch?v=lczPTYf_tvA
| boh wrote:
| Asset values don't reflect economic impact/relevance (as
| in a $100MM Picasso doesn't indicate $100MM of economic
| activity). That's why GDP is used as an indicator for
| economic growth, not market caps.
| Grustaf wrote:
| As it happens I just listened to a long talk by him,
| perhaps this one. He kept arguing that "bitcoin isn't
| volatile, because the price of various things measured in
| bitcoins keep falling".
|
| Either he doesn't know what volatility means or he is
| trying to scam people.
| thebean11 wrote:
| Your point is true until it's not true, or Bitcoin fails.
|
| You could make the same argument about any nascent
| technology that hasn't succeeded or failed yet.
| lowbloodsugar wrote:
| This is the slippery slope logical fallacy.
|
| We already do apply such laws. Car manufacturers are
| required to sell a certain number of EVs. Emissions must
| meet standards. Appliances have energy ratings. etc. etc.
|
| If Bitcoin were regulated so that those using the excess
| output of hydroelectric or other fixed output systems
| could do so for free, but everyone else was taxed
| appropriately, then that would actually probably do very
| little because that is largely the situation already: far
| from being an anonymous decentralized anarcho capitalist
| future, it is just large organized crime syndicates in
| China and Russia generating the transactions. And for all
| these reasons, the US should make it illegal.
| [deleted]
| RobinL wrote:
| Yes - nowadays I think pretty much everything that uses a
| lot of energy comes under scrutiny, and, in particular
| people look to see if the same outcome can't be achieved
| with less energy
| whoisninja wrote:
| let the market decide then, step away- don't mine, don't use
| Bitcoin if you prefer
|
| gold mining uses tons of energy we knew automobiles will
| pollute the environment, why didn't we stop using them
| altogether?
| Mordisquitos wrote:
| I will agree with _" letting the market decide"_ on the
| energy expended in Bitcoin when there is an effective and
| globally enforced carbon emissions tax that adequately
| compensates the potential damage caused by these emissions.
|
| Other industries and activities, such gold mining,
| automotives, food production, tourism, etc., must of course
| also be covered by said carbon tax. However, what makes
| Bitcoin particularly noxious compared to them is that it
| intrinsically carries a financial incentive to expend
| _more_ energy as time moves on.
| baron_harkonnen wrote:
| Capitalism always seeks a very local optima of maximizing
| profit with absolutely no question about the cost of
| "externalities". I put that in quotes because on a finite
| planet (that at the dawn of industrialization _felt_
| infinite) there 's no true externality.
|
| Energy is how our society is able to maintain its existence
| and current quality of life. If you over extended that
| energy usage you are looking towards total collapse of that
| system. That's what "unsustainable" means, that the system
| cannot be sustained in it's current state indefinitely.
|
| We already rely on fossil fuels to over extended the
| carrying capacity of the planet for humans by nearly and
| order of magnitude. Ignoring climate change and other
| sustainability issues, the inevitable end of fossil fuels
| would mean billions of lives lost, even if we were able to
| stabilize the current global population.
|
| I suspect, ultimately we will learn that humans are no
| different than bacteria in a petri dish: completely unable
| to do anything but consume all available resource even at
| their own eventual peril. But if you have any hope that we
| as a species _can_ avoid the fate of any other species
| placed in a similar situation, then you, at the very least,
| have to recognize that "markets" can't solve this problem.
| nwah1 wrote:
| What you are talking about is a typical Malthusian
| understanding of reality. At some level, there are
| physical limits that cannot be exceeded. On a practical
| level, those limits are vastly beyond what we can
| currently comprehend or use, and the entirety of human
| history is a testament to doing more and more with less
| and less. (With blockchain technology being a notable
| exception of always doing the same amount of stuff with
| more and more resources)
|
| Also, as a small aside... the concept of an externality
| is not about pollution or waste. It is about a cost that
| is imposed on people other than the individual
| responsible for the cost. The finitude of the planet is
| immaterial to the existence of externalities.
| TrackerFF wrote:
| But then again, gold actually has legitimate uses that
| benefits most people (electronics).
|
| Automobiles pollute, sure, but the vast majority of people
| benefit from vehicles.
|
| But what, if any, benefit does bitcoin offer to the public
| - other than being a speculative asset?
| rawtxapp wrote:
| Being able to store their wealth without being affected
| by the endless money printing is the benefit.
| whoisninja wrote:
| yes, keep learning
|
| gold is not that useful in utility sense tbh, less than
| 10% is industrial use.
| ric2b wrote:
| We have several times more bars of gold than the amounts
| used for industry/jewellery, we could have stopped mining
| it decades ago if that was a serious argument.
| rapnie wrote:
| The market is deciding. It is destroying our world. But for
| market winners there is no problem for a long time to come,
| while 'the market decides' ever more in their favor.
| bccdee wrote:
| We _should_ spend money creating public transit
| infrastructure to reduce the useof cars in urban areas. Not
| only is it more efficient in terms of transportation, it
| wastes much less energy and emits much less CO2. The fact
| that we haven 't is a policy failure.
|
| Incidentally, why would we ever let the market decide when
| the market consistently throws externalities under the bus?
| csharptwdec19 wrote:
| We are lazy.
|
| The original Model T could run on ethanol (not perfect, but
| better than gasoline in many regards for pollution, and
| back then IDK if they would have noticed) and Henry Ford
| was fond of the idea of biofuels; at the time I think he
| was fond of Potatoes for the purpose.
| MisterBastahrd wrote:
| The problem with biofuels derived from crops in that era
| is that people were actually starving to death on a
| regular basis.
| ath92 wrote:
| I wouldn't attribute this to only laziness. At the time
| people weren't yet aware that burning fossil fuels would
| cause climate change. It's also pretty cheap to just pump
| fossil fuels out of the ground. On the other hand, people
| back then did know that fried potatoes taste quite good.
| And you can turn them into vodka too.
| paulgb wrote:
| The market won't decide optimally because the costs
| (climate change) are socialized across the whole population
| but the benefits are not.
|
| It's basically saying if you don't like pollution don't
| pollute, which is flawed in ways I don't have to explain.
| whoisninja wrote:
| ya then debate about it, write about it, learn about it
|
| may be you are right , may be you're wrong
|
| just don't be too sure that you know better than most
| nwah1 wrote:
| The Personal Responsibility Vortex is a decent
| explanation.
|
| https://www.youtube.com/watch?v=SjNRtrZjkfE
| ecommerceguy wrote:
| I'm not against bitcoin anymore than I am against unnecessary
| taxation but since bitcoin uses electricity at an insanely
| unnecessary quantity it should be taxed to the hilt to make
| up for increased environmental and infrastructure costs that
| are borne onto the 99.999% that do not participate in the
| scam.
| rawtxapp wrote:
| Most of it is renewable energy.
|
| edit: 39% of it, as in a lot of it and that number should
| go up as the world is phasing out dirty energy for cleaner
| energy sources.
| pfortuny wrote:
| Which could be used for... heating? Lighting? Cooking?
| Cars? Something _useful_?
| ecommerceguy wrote:
| This is for Raw transaction App person. What is bitcoin
| useful for? Laundering money out of China I give you. Do
| cartels accept bitcoin yet?
|
| Genuinely curious, what it is useful for?
| rawtxapp wrote:
| @ecommerceguy, for protecting my wealth against dilution
| by endless money printing, stimulus and bailouts of
| broken companies/banks.
|
| I strongly believe that the current financial system is
| completely broken, so I'd like to opt out of it as much
| as possible.
| j-pb wrote:
| You're free to do so, buy a plot of land and grab a plow.
|
| Don't ruin the planet for everybody else so that you can
| sit on your un-diluting hoard of tulips like a dutch
| dragon.
| rawtxapp wrote:
| While you might disagree with that, Bitcoin _is_ useful.
| s1artibartfast wrote:
| I think that is the fundamental disagreement. Many people
| do not view bitcoin as doing anything useful. If it is
| useful, how does it compare to other solutions for the
| same problems.
| rawtxapp wrote:
| @s1artibartfast, then it comes down to, _who_ decides
| what 's considered useful? In many ways, the market does,
| right? If it was useless trash, it wouldn't have any
| value, but that's clearly not the case.
| monopoledance wrote:
| I think most of that is hydro-power or geothermal energy,
| as in some situation, these produce _excess_ energy
| locally at times.
|
| This is not the same as "renewable" energy, it's locally
| bound opportunistic energy. Hydro- and geothermal power
| is limited and almost exhausted already. These power
| sources are not chosen because they are ecologically
| neutral, but because mining is portable and can
| opportunistically use temporary cheap sources, like
| hydro-electrical dams build before the intended consumers
| arrived. Nothing in Bitcoin inherently favors sustainable
| energy sources, over cheap supply. In the coming years,
| we will _have to_ bite the bullet and chose very
| expensive endeavors over what the market suggests.
| Bitcoin doesn 't fit this future. It's suggested "value"
| is nothing compared to humanity's survival.
| newswasboring wrote:
| Its really not[1].
|
| > However, the CCAF's report specifies that the 76%
| refers to the share of hashers who use renewable energy
| at any point. It estimates that only 39% of hashing's
| total energy consumption comes from renewables.
|
| > Behind hydroelectricity, coal (38%) and natural gas
| (36%) are the energy sources hashers favour most.
|
| [1]https://www.finextra.com/newsarticle/36672/renewable-
| energy-....
| frongpik wrote:
| Only? I guess that if 40% of the worldwide energy
| production came from clean sources, all news outlets
| would count that as a massive success.
| newswasboring wrote:
| Yes. As they should. Its a much bigger achievement. I
| don't think these things are related.
| ashtonkem wrote:
| The issue is that energy is largely fungible, at least
| when limited in space and time. Occasionally renewables
| are over-produced and can't be transmitted elsewhere, but
| often every kWh of green energy wasted on bitcoin mining
| is a kWh of non-renewable energy that has to be created
| to meet other demands.
| [deleted]
| abecedarius wrote:
| Tax the _externality_ of actually burning carbon. That 's
| what we actually want to discourage, right?
| Mc_Big_G wrote:
| How much does it cost to maintain the dollar? It's reserve
| status is propped up through trillions of dollars spent on
| the military industrial complex. How much energy does that
| waste? Massive taxation on Bitcoin, simply because it's
| energy usage is easily calculated, is questionable.
| ctdonath wrote:
| That's...what money does: evaluate supply vs demand,
| identifying the relationship of value between options,
| decided by those with a vested interest. Such a system
| inherently evaluates cost vs benefits in a holistic networked
| manner (vs wishful thinking by the uninvolved).
| janoside wrote:
| Via Tesla, bitcoin is now implicitly held by all investors in
| the S&P 500, including, very likely, you. You are now a
| benefactor of bitcoin's growth, whether you're aware of it or
| not. This trend, where bitcoin quietly confers benefits to
| growing constituencies of people who remain completely
| unaware of the fact, will continue.
|
| And, at the same time, there are many people, in less
| fortunate circumstances, for whom the benefits of bitcoin are
| felt much more acutely:
| https://twitter.com/gladstein/status/1357757736394444800
|
| The "minuscule percentage" you quote (without reference) is
| very likely already clearly incorrect and will continue, over
| time, to become more incorrect.
| bhupy wrote:
| > a minuscule percentage
|
| This is true right now considering how nascent this is, but
| what happens if adoption picks up?
|
| One thing I'd like to see discussed is what the _marginal_
| power cost of Bitcoin is. From where I sit, the vast majority
| of power consumption is fixed per block, and occurs
| regardless of whether you have 1 or 10,000 transactions.
| tekromancr wrote:
| Almost, but because of the incentives, the greater the
| adoption, the more valuable each individual block reward
| actually is. The more valuable each individual block reward
| is, the more energy you can afford to spend attempting to
| mine it.
| kybernetikos wrote:
| You can't fit 10,000 transactions in a block on BTC.
| michaelscott wrote:
| The power consumption is linked to network size and has
| nothing to do with the block itself. If anything the
| marginal power cost is linked to the price of a Bitcoin, as
| the higher it climbs the more incentive to mine, the
| greater the competition and therefore the greater the
| mining difficulty/energy required. The only way to really
| lower energy consumption is to lower the price I can get
| for a Bitcoin but with the current economic conditions I
| don't see that happening anytime soon.
| sp332 wrote:
| How is power consumption related to network size? I agree
| that the power consumption of the network is directly
| related to the value of the bitcoins mined (and I
| supposed the transaction fee/tip size).
| kybernetikos wrote:
| I think by 'network size' the GP is referring to the
| network hashrate.
|
| For proof of work networks to function securely, the
| network as a whole must have a much higher computation
| rate than an attacker.
|
| Obviously capabilities increase the whole time, so the
| bitcoin network needs to be able to adapt - to do this,
| it adjusts its 'difficulty' approximately every two
| weeks. The power usage corresponds directly to the
| difficulty level set by the network.
|
| If you add more miners, the difficulty will increase, and
| power consumption will go up, if miners leave, the
| difficulty will decrease and power consumption will go
| down.
| x3n0ph3n3 wrote:
| Network size increases competition to mine blocks faster,
| leading to demands for higher hash rate, leading to
| higher power consumption.
| hollerith wrote:
| That's not how Bitcoin mining works.
|
| A certain amount of bitcoin -- the amount determined by a
| schedule that was defined before the network became
| operational -- is given as a mining reward every 10
| minutes. The incentives of the individual miners is such
| that the expenses of the miners (collectively) equals the
| mining reward -- and the major mining expense is
| electricity.
|
| If the mining reward is cut in half, the electricity
| consumption of the network is cut in half, too.
|
| In contrast, if the rate of transactions changes or the
| number of miners change, electricity consumption stays
| the same. (More precisely, the expenses of running the
| network equals the mining reward plus any transaction
| fees, and since the blocks are of fixed size, for more
| transactions to compete for space in the blocks increases
| transaction fees, but I am guessing that transaction fees
| are currently a small fraction of the mining reward.)
| [deleted]
| x3n0ph3n3 wrote:
| I think you are _very_ mistaken.
|
| > If the mining reward is cut in half, the electricity
| consumption of the network is cut in half, too.
|
| That's not true it all -- there is no difficulty
| adjustment when the reward is halved. There may be
| pressure on some miners to stop mining, but that
| adjustment is not immediate and can also be compensated
| for by change in the price of bitcoin.
|
| > In contrast, if the rate of transactions changes or the
| number of miners change, electricity consumption stays
| the same.
|
| Given the network is operating at peak transaction rate
| already, there's not much change here. Neither block size
| nor the transaction count has a meaningful affect on the
| computations required to "solve" a block. The merkle tree
| for the transactions is computed once, but most of
| computation is finding a nonce, that combined with the
| rest of the block header, produces a hash with a certain
| number of leading zeros.
|
| Changing the block size or transaction count doesn't
| meaningfully change electricity consumption.
| hollerith wrote:
| I agree with your final 2 paragraphs.
|
| >that adjustment . . . can also be compensated for by
| change in the price of bitcoin.
|
| It can. When I wrote that if the mining reward is cut in
| half, the electricity consumption of the network is cut
| in half, too, I assumed that the price remains constant.
|
| A miner must pay for the electricity he or she uses.
| Where do you think the money comes from to pay for the
| massive amount of electricity used by the network?
|
| Do you imagine that rich people (i.e., people who can
| afford to lose money) are buying the electricity for pro-
| Bitcoin ideological reasons?
|
| I don't: I believe that it comes out of the revenue made
| (collectively) by the miners. In other words, the
| payments for the electricity are parts of (individual)
| plans to make money through mining.
|
| And I believe that if that (collective) revenue were cut
| in half -- especially if miners and prospective miners
| knew of the halving in advance (particularly, before they
| decided what mining hardware if any to buy) -- then money
| spent on electricity is approximately cut in half, too.
| (Because otherwise the plans to make money would not
| work.)
|
| You are correct that the adjustment in the hash rate is
| not immediate after a halving of the mining reward.
| Mostly that is because miners who recently bought mining
| hardware have to continue mining after the halving to
| continue to pay for their hardware.
|
| If the halving was announced in advance, then the halving
| will start exerting downward pressure on the mining
| difficulty months in advance of the actual date of the
| halving. The major cause of that downward pressure is
| miners opting not to upgrade their hardware and
| prospective miners opting not to enter the mining
| business in the first place (the effect of which is to
| make it take longer for the remaining miners with their
| non-upgraded hardware to solve the proof-of-work puzzles,
| which in turns causes the software to reduce mining
| difficulty to return the average time between successive
| blocks back to 10 minutes).
|
| Basically, it takes many months for newly-manufactured
| mining hardware to pay for itself, and that delay is the
| main reason the response to a reward-rate halving is
| slow. But again the response starts months before the
| actual halving; and the cumulative effect of the halving
| on the rate -- more precisely the effect the rate has on
| how much electricity is consumed by the network over the
| years -- is approximately the same as it would be if the
| effect of the halving on the rate were instantaneous.
|
| It is the fact that one of the major expenses (namely,
| hardware) of the miners is "lumpy" (requires an upfront
| expenditure that is then recouped over many months) that
| obscures the simple relationship whereby the collective
| expenses of the mining community approximately equals the
| collective revenues of that community -- where most of
| that revenue is from mining rewards, which is equal to
| the price of bitcoin (or the value of bitcoin if you
| prefer) times the rate at which the network dispenses
| bitcoins from miners as rewards. What makes me confident
| that expenses = revenues is that miners are rational and
| consequently are capable of taking into account scheduled
| halvings of the rewards to mining and the "lumpiness" of
| the cost of mining hardware (and many other factors).
| Taek wrote:
| Bitcoin is valuable even if adoption never does pick up.
| It's a money system with certain properties that can't be
| found anywhere else, and it's a money system that's that's
| half decent.
|
| The existence of Bitcoin forces all other money systems
| around the world to be at least as good as Bitcoin, or
| citizens will flee into Bitcoin.
|
| Bitcoin adds value simply by existing, even absent serious
| adoption.
| nmfisher wrote:
| How many products and services are bought every day with
| conventional monetary systems?
|
| How many products and services are bought every day with
| Bitcoin?
|
| I suspect BTC will have as much impact on conventional
| currencies as a fly landing on an aircraft carrier.
| Taek wrote:
| Bitcoin also spends about as much money as a fly landing
| on an aircraft carrier. Sorry Argentina, but you just
| don't use that much electricity in the context of the
| global economy.
|
| Companies like Tesla are buying Bitcoin, not because they
| intend to transact with Bitcoin but because it gives them
| protection against inflation within the US economy, and
| it gives them a stash of money that cannot be forcibly
| shut down, allowing them to do business even in
| jurisdictions that don't want them there.
|
| If you are looking at just the "products and services"
| you are missing the forest for the trees.
| nmfisher wrote:
| There's so many things wrong with this comment.
|
| Until people start accepting bitcoin for bread, rent and
| salaries, Tesla most certainly does not have a "stash of
| money that cannot be forcibly shut down". It has
| something that _might_ be able to be exchanged into a
| local currency to buy those things.
|
| What's more, that stash of bitcoin most certainly _could_
| be forcibly shut down at the stroke of a pen. Tesla is a
| public US company listed on a US stock exchange. If the
| USA decided tomorrow to criminalise BTC, Tesla would be
| left with a huge 1.5bn hole in its accounts and a huge
| number of very pissed off investors.
|
| Moreover, if Elbonia doesn't want Tesla there, how in the
| hell are Tesla cars going to arrive at ports? How are
| they going to be registered? How are Tesla going to
| deploy charging infrastructure? BTC has exactly squat to
| offer in terms of dealing with jurisdictions that don't
| want them there.
|
| BTC isn't some magic wand that lets you operate in a
| fairy dimension where none of the rules of reality apply.
| Taek wrote:
| Just because Tesla doesn't have the ability to sell cars
| in Elbonia doesn't mean they don't have some form of
| commerce requirement with Elbonia. Maybe they are paying
| devs to work on the UI, or paying a computing company to
| run simulations.
|
| Bitcoin is already accepted by many for rent and
| salaries. Bread is not likely to ever happen because
| transactions are too inefficient, but that doesn't mean
| you can't viable have an economy based on larger
| exchanges.
| computerlab wrote:
| I often wonder if the release of Zelle around 2017 (near
| instant, fee-free transactions between personal and
| business bank accounts between certain US banks) was
| motivated by a perceived crypto threat.
| nmfisher wrote:
| I mean, that's been pretty standard in every country I've
| dealt with outside the USA for a long long time.
|
| If anything, I'd say that's more a reflection of the poor
| state of the USA banking sector than its currency.
| zht wrote:
| vs the rise of Venmo and Square Cash?
| cesarb wrote:
| > How much energy does watching porn consume? Playing video
| games? Watching a movie? Browsing Facebook? Using a ski chair?
| Visiting an amusement park? Going in vacation? Cooking your
| favorite type of food? Making ice cream? Driving to your
| friends? Listening to music? Concerts? Having a party? Banking?
| Casinos?
|
| The difference is that, for all of these, the incentive is to
| _lower_ the energy usage. For Bitcoin, the incentive is to
| _increase_ the energy usage, until the amount of energy used
| costs the same as the amount of Bitcoin received by the miners.
| agumonkey wrote:
| I'd really like to know the energy cost of HD streaming in
| general. Including god damn hi-res GIFs.
| umanwizard wrote:
| > Bitcoin is now considered by some important for our future
| finance system
|
| Yeah, but those people are wrong. It's perfectly reasonable to
| judge them for doing harmful actions in service of a wrong
| belief.
| pdpi wrote:
| Why are they wrong? People who consider Bitcoin important are
| not a homogeneous mass -- are you saying all those people are
| wrong, or some portion of it?
| umanwizard wrote:
| I believe that everyone who thinks Bitcoin is important to
| the future of the global financial system is wrong about
| that particular point. (They might be fine people in other
| ways, or have other reasons to like Bitcoin, sure).
| meowkit wrote:
| Ok but _why_.
|
| Here is a primer on why BTC and crypto are important to
| the future of the global financial system.
|
| https://research.stlouisfed.org/publications/review/2021/
| 02/...
| rawtxapp wrote:
| Why are they wrong?
| Weebs wrote:
| They're completely ignoring the concept of magnitude, and
| realistically their claim is "we use energy for other
| stuff, so there's nothing wrong with using massive amounts
| of energy for X". They're making an implicit premise that
| using large amounts of energy, which causes harm to humans,
| is okay. If you accept that premise, okay fine, but I
| don't.
|
| As another poster here shared, a single transaction uses
| upwards of hundreds of kwh. That kind of energy that moves
| thousands of pounds hundreds of miles, or power a typical
| US household for almost an entire month.
| rawtxapp wrote:
| If you think this creates a financial system that's much
| more transparent and solid than the current one which is
| completely broken, than that energy usage is worth it.
| Also you shouldn't look at it in terms of
| energy/transaction, the energy consumption isn't a
| function of transactions.
| ashtonkem wrote:
| > If you think this creates a financial system that's
| much more transparent and solid than the current one
| which is completely broken, than that energy usage is
| worth it.
|
| Bitcoin is capable of handling 4 transactions a second.
| If you've created a financial system that consumes more
| energy than Argentina and can't actually handle the
| transaction requirements of a decent sized mall, then I'd
| begin to wonder what definition of "solid" you're using.
|
| > Also you shouldn't look at it in terms of
| energy/transaction, the energy consumption isn't a
| function of transactions.
|
| We can look at energy consumption per block, but there's
| no way to slice and dice this in a way that doesn't make
| Bitcoin look like a massive waste of energy compared to
| competitive systems.
| Weebs wrote:
| A fully trusted and decentralized financial system is
| great, but it's not going to change the fundamental power
| relations that cause so much harm in our society. To me
| that makes the process not worth it
|
| I believe the research is useful, but to base an
| international currency around it with these costs is not
| rawtxapp wrote:
| As long as it stops a few people in the world controlling
| the money supply, that's a big win from my perspective.
| ashtonkem wrote:
| I've never really understood why people ascribe such
| magical capabilities to Bitcoin. Bitcoin has really bad
| wealth inequality, arguably worse than the rest of
| America does.
| umanwizard wrote:
| Because Bitcoin is not important to our future finance
| system. It does not solve any problem that any meaningful
| fraction of people cares about.
| rawtxapp wrote:
| While you might believe that, the market disagrees with
| you.
| orange_tee wrote:
| That is not true. For example I hold bitcoin. But I also
| don't believe that bitcoin will replace the financial
| system or will serve any real purpose in the future. I am
| just speculating on its value.
|
| People speculate on loads of assets which have no real
| life utility. For example, art or classic cars.
| rawtxapp wrote:
| Just because you are speculating doesn't mean other who
| also hold it are speculating. Personally, I hold it
| because I don't want my dollars to get perpetually
| diluted because of endless money printing, stimulus,
| bailouts, etc.
|
| Also, Bitcoin has value and if you wanted, you unlock it
| and spend your money without even selling your asset,
| there was a discussion the other day about defi, highly
| recommend checking out MakerDAO if you want to have a
| practical use for your Bitcoins.
| nickpp wrote:
| Beliefs that used to be "wrong" and now are considered right:
| abolitionism, homosexuality, marijuana.
|
| How do you know this is a wrong belief that will stay wrong?
| cesarb wrote:
| > How do you know this is a wrong belief that will stay
| wrong?
|
| How do you know it won't?
|
| Just because some beliefs that used to be "wrong" are now
| considered "right", does not mean _all_ beliefs that used
| to be "wrong" will in the future be considered "right".
|
| As the quote says, "They laughed at Columbus, they laughed
| at Fulton, they laughed at the Wright brothers. But they
| also laughed at Bozo the Clown."
| loufe wrote:
| This is a bit of a tangent, but I think often of how wrong
| it is that we allow indoor marijuana production in places
| like Canada and the Western USA where it's legal. What a
| horrible waste of energy.
| trimbo wrote:
| Maybe a better comparison would be mutually assured
| destruction. Enormous, world-level resources spent towards
| trying to ensure an outcome for something that no one wants
| to have happen. Those enriched along the way were the
| purveyors, not the population.
| ashtonkem wrote:
| The existence of other beliefs that were overturned, even
| ones with a high emotional value now does not support
| unrelated ideas.
|
| Put more simply: just because gay rights campaigners were
| ultimately vindicated doesn't mean you're their modern
| equivalent.
| matsemann wrote:
| Ah, the brave crypto millionaires marching and fighting for
| human rights.
| umanwizard wrote:
| I don't know for certain, of course; I just very strongly
| suspect it.
| [deleted]
| AshamedCaptain wrote:
| > $X is now considered by some important for our future finance
| system. While not everybody agrees, this may be more important
| than countless other ways we use energy, for much more trivial
| reasons. [...] Being judgmental about how others use energy
| they pay for reeks of hypocrisy, virtue signaling and holier-
| than-thou attitude.
|
| Et voila!
|
| "Some" people think $X is now important, and thus, the rest of
| the world shall no longer be able to produce judgements on
| either $X or "those people".
|
| I think it is definitely up for debate, and we can ask
| questions such as how absurd $X actually is (or is not), how
| absurdly wasteful (or not) $X is, how many "some people" is,
| whether the assumption that $X is important for $Y is true (or
| not), etc.
|
| Please...
| jp555 wrote:
| Even more directly - How much energy does all the world's
| "legacy" Fintech use?
|
| Banks, exchanges, government tax agencies, accountants, money
| printing, retail cash machines (ATM, registers, etc) and all
| the way to gold mining.
| bccdee wrote:
| If you want to analogize 1:1, a bitcoin transaction consumes
| approximately five hundred thousand times more energy than a
| visa transaction [1].
|
| [1]: https://www.statista.com/statistics/881541/bitcoin-
| energy-co...
| xorcist wrote:
| A better comparison with Visa is perhaps an intra-exchange
| transaction, such as Bakkt? Or perhaps a Bitcoin Lightning
| transaction?
| rawtxapp wrote:
| But you're also not counting all the people, buildings,
| surrounding systems needed to make the VISA network work.
| bccdee wrote:
| Nor am I counting the infrastructure surrounding Bitcoin
| mining. This tabulates only the energy expenditure of the
| computers performing the transactions.
| hakesdev wrote:
| Please read. Nic Carter is a good place to start.
| https://www.coindesk.com/what-bloomberg-gets-wrong-about-
| bit...
|
| "First of all, Bitcoin and Visa are fundamentally different
| systems. Bitcoin is a complete, self-contained monetary
| settlement system; Visa transactions are non-final credit
| transactions that rely on external underlying settlement
| rails. Visa relies on ACH, Fedwire, SWIFT, the global
| correspondent banking system, the Federal Reserve and, of
| course, the military and diplomatic strength of the U.S.
| government to ensure all of the above are working smoothly.
|
| Any energy comparison must take the above into account -
| including the externalities from the extraction of oil,
| which implicitly backs the dollar. As those who make this
| comparison inevitably fail to mention, the dollar's
| ubiquity is partly due to a covert arrangement whereby the
| U.S. provides military support to countries like Saudi
| Arabia that agree to sell oil exclusively for dollars. It's
| worth noting that the grossly oversized U.S. military,
| whose presence worldwide is necessary to backstop the
| international dollar system, is the largest single consumer
| of oil worldwide."
| bccdee wrote:
| Obviously there's more infrastructure behind USD
| transactions than just Visa. But that doesn't change much
| about my initial comparison -- Fedwire energy costs are
| low and amortize across many transactions, as is true of
| the rest of the infrastructure you list.
|
| And if you want to start talking about the Fed and US
| imperial power, then we have to start talking about the
| bitcoin hype industry which exists to pump the value of
| various cryptocurriencies. Cruises, conferences, etc,
| etc. Besides, it's not as if we could get rid of US
| imperialism or oil extraction by switching from USD to
| BTC. You're just naming tangentially-related institutions
| with high externalities, not actual costs of USD
| transactions.
|
| This is a deliberate obfuscation on the massive
| inefficiency in Bitcoin's transaction infrastructure. We
| don't need to talk about geopolitical power to talk about
| Bitcoin's transparent wastefulness.
| Nursie wrote:
| When bitcoin provides 1% of the services that the "legacy"
| financial world does, let's talk.
| choward wrote:
| Nobody uses the gold standard anymore.
| Shoue wrote:
| When the alternative is simply just using Proof of Stake and
| lowering the energy consumption by an estimated 99%, yes, we
| can be judgmental of how others use energy in this specific
| case. It's not Bitcoin/PoW or no cryptocurrencies at all,
| that's a false dichotomy, if that's what you're implying.
| Nursie wrote:
| Good luck with that. The bitcoin core folks can't even agree
| to change blocksizes to increase transaction throughput.
| Switching to PoS is highly unlikely.
| DennisP wrote:
| True, but the rest of us can switch blockchains.
| Nursie wrote:
| Good luck with that too.
| deeeeplearning wrote:
| Ether is the number 2 coin and has been steadily gaining
| on Btc. Do you think everyone uses Btc exclusively?
| Nursie wrote:
| No, but I don't think ether uses PoS either (though I
| know they've been trying to move to it for years).
|
| Further, whether or not some folks move to ethereum is
| more or less irrelevant to whether BTC carries on doing
| what it's doing. The problem is not individuals making
| the switch, it's getting enough people to switch in order
| to reduce the energy footprint of BTC.
| DennisP wrote:
| They've been trying for years but now it's been running
| smoothly in production for several months. They plan a
| few minor tweaks, then after watching it some more
| they'll migrate the legacy chain to it. That's a fairly
| simple software engineering task, rather than the
| difficult research challenge that PoS has been until
| recently.
|
| The other big change on the way is a massive increase in
| scalability, which I'm hoping will help move the market
| in a more sustainable direction.
| bcheung wrote:
| It's already being done. There is a ton of financial
| transactions in the DeFi space happening on Ethereum
| right now and other protocols on other chains are rapidly
| being developed and rolled out.
| Nursie wrote:
| I'm not saying ether is a ghost town, I'm saying good
| luck making bitcoin an irrelevance to the point its
| energy use drops.
| onyb wrote:
| PoS lacks fairness.
|
| To participate in PoS, you need an existing stash of coins,
| which is inaccessible for many individuals from countries
| where cryptocurrencies are outlawed. Not forgetting to
| mention that participation in consensus would indirectly
| require going through KYC.
|
| PoW, on the other hand, is akin to buying Bitcoin with
| electricity - a borderless natural resource.
| mcosta wrote:
| You pay electicity with fiat money.
| vntok wrote:
| Solar panels are a thing. Depending on the region you are
| setting them up in, a couple dozen panels and a battery
| could reliably power an ASIC 24/7.
|
| Hydro, wind are other possibilities.
| bcheung wrote:
| They both require large financial investments don't they?
| And both PoW and PoS have pooling options if you want to
| invest less.
|
| I'm not seeing much difference in terms of accessibility.
| In theory PoS is easier because PoW requires actual
| hardware and/or more technical knowledge.
| kybernetikos wrote:
| > PoS lacks fairness.
|
| I dislike the way that cryptocurrencies have managed their
| initial allocations, but it's way better than the way that
| fiat currencies have managed their initial allocations
| (usually encoding generations of violence, rascism and
| oppression).
|
| To 'participate' in PoS (by which you mean mining a block I
| suppose), you can buy all the stake you need from other
| people, just like if you want to 'participate' in stock
| ownership, or land ownership or ownership of nearly
| anything else in the world.
|
| > PoW, on the other hand, is akin to buying Bitcoin with
| electricity - a borderless natural resource.
|
| Well.... if you try to mine BTC these days with a standard
| computer on a standard electricity tarif, you're not going
| to have a fun time.
|
| Given the fact that to reasonably 'participate' in PoS you
| need only the kind of computer you already have and an
| easily acquired stake, while to reasonably 'participate' in
| many forms of PoW you need unusual, expensive custom
| hardware and cheap electricity, I'm not at all convinced
| that PoW has anything better to say about 'fairness'.
| UncleMeat wrote:
| What is fairness? In voting, we usually consider a system
| which permits those with more money to vote more times to
| be unfair. PoW is fair only if wealth is distributed
| fairly.
| kazinator wrote:
| In voting, we consider voting more than once to be a
| criminal offense.
|
| (For values of "we" denoting various constitutional
| democracies of the so-called free world.)
| casi wrote:
| You can participate in most(all i am aware of) PoS chains
| with any amount of underlying tokens, in the same way you
| can participate in a mining pool if you lack the hashrate
| to mine independently.
|
| There will be independent PoS validators who can afford
| upfront costs, but there are independent miners too who
| purchase lots of hardware. In PoS the next block is
| randomly distributed, so those with better hardware dont
| outperform. So you can validate off a solar powered
| raspberry pi or nuc if you'd like and not underperform
| someone with a highend gpu, so the hardware cost is much
| lower, added to this in long run it will be cheaper to
| participate in staking than having to replace gpus/asics to
| mine with.
|
| I don't see how this leads you to think it is unfair in
| comparison to mining? Upfront costs pretty similar, running
| costs cheaper, long term hardware replacement costs much
| less.
| jude- wrote:
| Moreover, anyone who can stake their tokens to produce
| blocks will never sell you enough tokens that you'll be
| able to compete with them for future block rewards. Put
| another way, the value of a staker's token-minting stake is
| at least equal to the expected ROI over its lifetime (much
| like how the value of a stock is worth its expected
| dividends over time). PoS is a digital manifestation of a
| hereditary aristocracy -- you can almost never buy your way
| in; you have to be a first mover.
| tekromancr wrote:
| You need WAY more than just electricity. In order to have
| any chance of receiving any amount of bitcoin, you also
| need specialized equipment, connection to the network, and
| access to a mining pool.
|
| Those three things would give a government interested in
| banning cryptocurrencies plenty of leverage to disrupt
| mining operations in their country.
|
| All they would need to do is regulate the import of ASIC
| mining hardware; sinkhole any traffic that looks
| "bitcoin-y" (damn the collateral damage, we're fighting
| fascist communist pedophile terrorist drug traffickers
| here!) and similarly block access to any known mining
| pools.
|
| They could go even further and introduce severe and
| draconian penalties to anyone producing, possessing, or
| using cryptocurrencies (which of course would be
| selectively enforced).
|
| At this point, once you factor in the real-world element,
| the fact that, in theory, you only need electricity to
| produce bitcoin becomes such a small part of that equation.
|
| I think at that point why not use PoS (or better yet, a
| DPoS scheme), if there isn't any real-world benefit to PoW?
| I think the tradeoff of introducing a small amount of
| revocable trust in exchange for RADICALLY reduced energy
| consumption is pretty clearly worth it, given the real
| world constraints.
| bccdee wrote:
| > a borderless natural resource.
|
| Wow, I never knew ASICs grew on trees.
| hacknat wrote:
| PoW lacks fairness, most of the rewards go to folks who can
| allocate capital to very expensive mining operations. I
| would actually argue that PoS might be more fair/accessible
| than PoW is now.
| justapassenger wrote:
| Bitcoin isn't religion (although it has many religious-like
| followers), so there aren't dogmas you cannot question.
|
| Energy usage of it is ridiculously high and people are totally
| allowed to question how wasteful it is, no matter if you allow
| them to.
| cambaceres wrote:
| If Bitcoin uses that amount of energy now, imagine how much it
| will consume when a large amount of the population actualy uses
| it for payments.
| zadler wrote:
| How many people use it for payments is not the right metric,
| it's not the payments that cost a lot of electricity it's the
| competition to win block rewards where more energy means a
| higher chance of mining a block.
|
| Indirectly, if a lot of people use it for payments it may be
| worth more and attract more mining competition.
| zie wrote:
| Bitcoin and most(all?) crypto currencies pretty much suck for
| payments. I think a BTC transaction costs around $16 USD just
| to get it on the blockchain now. Plus transactions are not
| private, and they are permanently public, so even if your BTC
| Address is unknown today, doesn't mean it won't be known
| tomorrow.
|
| There are perhaps, some reasonable arguments for using
| crypto-currencies, but buying groceries is not on the list.
| Buying Houses... *MAYBE*, since that information is already
| public anyway.
| pixelpoet wrote:
| I tried to make this point on Reddit, and was downvoted to a
| smoking hole in the ground by people who were complaining that
| they can't get GPUs to play games, and that it's not eco-
| friendly. Of course, playing games on high powered GPUs is
| super eco-friendly, as are many other ways of making money...
|
| Half of them think people are mining Bitcoin on GPUs, and
| almost none of them know about Proof of Stake coins. Not that I
| want to excuse the egregious power consumption of PoW coins,
| but I do wish the holier-than-thou crowd would at least do a
| little more research.
| Weebs wrote:
| Yes, high powered gaming isn't eco friendly either, but can
| we please stop ignoring magnitude and utility in this thread?
|
| You can power a typical US household for almost an entire
| month using the energy of a single bitcoin transaction. What
| utility does Bitcoin bring with that single transaction? Is
| it worth the measurable harm it's doing to our ecosystem and
| human lives?
| pixelpoet wrote:
| I wasn't ignoring it, only pointing out that they were
| ignoring the eco-unfriendliness of their preferred use of
| GPUs (single users with single GPU, also not mining
| fulltime probably since it's in their PC). Please tell me
| you see the hypocrisy.
|
| I'm personally fully onboard with Bitcoin and all PoW coins
| being crap and wish they would die, leaving only PoS coins
| in the crypto space.
| louwrentius wrote:
| Most people have a job and game part-time. GPUs in gaming
| rigs are not powered on 24/7. Let's be honest about this.
| jcranmer wrote:
| The price of all cryptocurrencies more or less move in
| tandem, so that when Bitcoin has a good time, so does all the
| cryptocurrencies that can be mined with GPUs.
| bonestamp2 wrote:
| Some people are really out of touch. By the time they found
| out about Bitcoin in the past couple years it had moved past
| GPU mining almost a decade ago.
| hummusman wrote:
| When it became blindingly apparent that mining diamonds, gold
| and rare earth metals was proving harmful to societies
| (pollution, war etc.) countries put into place regulation to
| ensure that future mining would be conducted in ways to try and
| eliminate these harms.
|
| Mining bitcoin is a growing contributor to energy consumption,
| and subsequently environmental damage and harm.
|
| Similar precedent?
| Taek wrote:
| Kind of but not really. People aren't upset at _how_ bitcoin
| is using electricity, they are upset at how much bitcoin is
| using electricity.
|
| If you want to save the environment, regulate the production
| of electricity irrespective of how that electricity is put to
| use. Let the market figure out how to allocate the
| electricity to various tasks.
| chrisco255 wrote:
| Energy consumption does not necessarily mean environmental
| harm. That's not a law of the universe at all.
| mentalpiracy wrote:
| Where do you think energy being consumed comes from?
| chrisco255 wrote:
| Depends on the source, right? For example, in Iceland
| it's mostly geothermal power plants. And that's why
| electricity is so cheap there, and that's why, despite
| being one of the smallest countries in terms of
| population, it is #4 for Bitcoin mining:
| https://www.cryptoknowmics.com/news/bitcoin-mining-
| top-5-cou...
| xirbeosbwo1234 wrote:
| Oh, come on. All of those things, except for travel, draw
| roughly zero watts compared to Bitcoin.
|
| One Bitcoin transaction is about 750 kWh. That's enough to
| power a typical home for a month. It's enough to drive about
| 500 miles in an electric car, or (with vigorous handwaving
| based on EPA numbers) about 200 miles in an efficient gasoline
| car.
|
| Bitcoin uses about 1/3 the energy of all the datacenters in the
| world. There are about 120 million Bitcoin transactions per
| year. If we assume 360 million people are using services that
| run in datacenters (obviously too low), one Bitcoin transaction
| uses as much electricity as the server time to support one user
| across all the services they use for a year.
|
| >Being judgmental about how others use energy they pay for
| reeks of hypocrisy, virtue signaling and holier-than-thou
| attitude.
|
| This is an engineering problem.
| bcheung wrote:
| A transaction or a block? Multiple transactions are recorded
| in a single block. The massive computational power is used to
| certify and lock down blocks at a time, not individual
| transactions.
| xirbeosbwo1234 wrote:
| A transaction. A block can hold a limited number of
| transactions, so the throughput is limited. It works out to
| about four transactions per second on average.
|
| The cost to "mine" a whole block is even more ludicrous.
| ctdonath wrote:
| Excellent questions with interesting answers. OP's observation
| begins a fascinating discussion. I've been roughing out minimal
| cost of living, finding baseline around 5C//hr; need to re-cast
| to kWh units.
| sharkjacobs wrote:
| > Being judgmental about how others use energy they pay for
| reeks of hypocrisy, virtue signaling and holier-than-thou
| attitude.
|
| Are you actually seeing this or are you conflating criticisms
| of bitcoin with criticisms of bitcoin miners? Because I feel
| like I see a lot of the former and very little of the latter,
| but maybe I'm looking in the wrong places.
| matsemann wrote:
| > _Being judgmental about how others use energy they pay for
| reeks of hypocrisy, virtue signaling and holier-than-thou
| attitude._
|
| It's impossible to have a good debate if you from the get-go
| insult everyone that disagree with you and heighten bitcoin to
| something not allowed to be criticized because some people
| believe it can be important in the future. As if that absolves
| something from all sins.
| betterunix2 wrote:
| Important difference between Bitcoin and everything else you
| mentioned: there is no incentive to improve the energy-
| efficiency of mining. We went from CPU to GPU to ASIC mining,
| each time reducing the per-hash energy consumption, and all the
| miners did was hash more using the same amount of energy.
| Whereas, for example, the energy used to watch porn -- energy
| spent by all the routers, switches, and servers involved --
| will be reduced if technological improvements allow the same
| task to be accomplished with less energy.
| leeoniya wrote:
| aka https://en.m.wikipedia.org/wiki/Jevons_paradox
| betterunix2 wrote:
| Nope, not the same. Bitcoin mining does not "produce"
| hashes, it "produces" Bitcoin blocks. All that changed with
| the improvement in hashing speed is the number of hashes
| that must be computed before a block is added to the block
| chain.
| Taek wrote:
| Spending material wealth on mining is what makes it secure.
| We work on improving the per-hash cost because it makes it
| more difficult for someone with a brilliant technological
| innovation to compromise the security of the system.
|
| And there is incentive to improve the total energy use. Every
| participant in the system pays for the electricity that
| secures bitcoin in the form of inflation and transaction
| fees. If some alternative to Bitcoin can provide all the same
| benefit but with less inflation and lower fees, then there is
| a good reason to switch to that alternative. And people are
| trying to innovate here continuously, the blockchain sector
| at this point is getting more investment than the AI sector.
| betterunix2 wrote:
| Basically your argument is, "Bitcoin may not incentivize
| improvements in energy efficiency, so we should scrap
| Bitcoin and use something more efficient." Great, let's do
| it. The technology is already here, in fact, the technology
| was always there. Have a consortium of banks operate a
| distributed public ledger. The banks will charge fees to
| include transactions on the ledger, just like miners charge
| fees now, and the economic incentives to raise or lower
| fees will be similar -- but the fees will be lower because
| the consortium members will not need to cover the
| electricity cost of mining, only the cost of operating
| their servers.
|
| The only problem Bitcoin mining solves is the lack of
| identification among the miners (i.e. the "Sybil attack"
| problem). Seems pretty obvious to solve the problem by
| introducing identity, particularly given that the large
| miners / mining pools are not really anonymous. Sacrifice
| the small miners who contribute little to the system, set
| up a consortium, and enjoy whatever benefits the
| distributed ledger provide without the waste.
|
| (Yes I know, banks are evil, how dare anyone suggest that
| we acknowledge any authorities in a system, why should we
| trust the banks, etc.)
| dubcanada wrote:
| I do agree that most of these articles are picking on bitcoin.
|
| I think the main problem people have is the actual result of
| the mining is useless, say compared to using all those
| computers for MI or Folding @ Home.
|
| I think a better solution would be to get rid of these random
| bytes and replace them with a Folding @ Home or similar
| solution, where the computing power you donate results in you
| getting X bitcoin. Things that are a positive on society,
| rather then a negative.
|
| But then again that is me being judgmental on others, maybe
| people care a ton about that string of random alphanumeric
| characters.
| pdpi wrote:
| The actual result of mining is defending the network against
| double-spending (and censorship, to a degree -- though this
| is more fragile). Insofar as you believe that Bitcoin-the-
| currency is itself a social positive, the mining process has
| a positive effect. (But also a very meaningful cost, which
| leads us to a subtler question -- is it a _net_ positive?)
| hakesdev wrote:
| this is a really dumb argument that is trotted out every 4
| years. There's also already a FoldingCoin that's been around
| since 2014. https://bitcoinexchangeguide.com/foldingcoin/
|
| For PoW to work it must be a _costly_ signal. If you
| introduce positive externalities of mining (such as Folding @
| Home) the system isn 't sustainable.
| toolz wrote:
| I don't know that name-calling adds much value to the
| conversation, but I will say it's a failing strategy to try and
| make value judgements for other people. The way forward is
| technological advancement. That has always been the case. We're
| not going to solve climate crisis by stifling anything as
| should be evident just by looking at China. I'd imagine we're
| all much better off supporting green energy rather than
| pointing fingers at anyone who has a different value judgement
| for how that energy should be used.
| bccdee wrote:
| One bitcoin transaction uses FIVE HUNDRED THOUSAND TIMES more
| energy than one Visa transaction [1]. This is like lighting a
| cigar with a $500 bill and going "what, I have to light my
| cigars _somehow,_ and inevitably it 'll cost something. I spend
| money to meet my goals."
|
| [1]: https://www.statista.com/statistics/881541/bitcoin-energy-
| co...
| parliament32 wrote:
| Compared to the cost of lighting a cigar with a matchstick,
| it'd be more like lighting it with a penny. Despite Visa
| transactions being cheap, bitcoin transactions are also very
| cheap -- you spend more power turning on your living room
| light for a few seconds. Probably best if we keep things in
| perspective.
|
| Further: https://hackernoon.com/the-bitcoin-vs-visa-
| electricity-consu...
| bccdee wrote:
| Okay, so the gist of that article is that bitcoin burns
| about a third as much energy as _the entire global
| institution of banking,_ based on some extremely back-of-
| the-envelope calculations.
|
| Bitcoin's current market cap is about $600 billion. There
| are quadrillions of dollars worth of capital in the the
| world, mostly managed by banks. Bitcoin remains EXTREMELY
| inefficient in comparison.
| Erlich_Bachman wrote:
| This is the most concise and crystallized attempt at putting
| this (certainly popular and in some ways inevitable) argument
| into relatable words. Kudos.
| undersuit wrote:
| I've always wondered what the cost for HDCP encryption on our
| media wastes.
| titzer wrote:
| Like it or not, we live on the same planet. I have to smell
| your farts, and inhale your air pollution, and your CO2 output
| ruins my climate. You can use energy however you want when you
| pay for all the externalities yourself. Right now, you can't.
| In aggregate, this concept is known as social responsibility.
| cft wrote:
| It's a salvo in the imminent central banks attack against this
| serious threat, that would compete with their fiat experiment.
| They are not sure yet whether to use the environmental angle or
| the "terrorist use of Bitcoin" like Yellen announced .
| moonbug wrote:
| > Bitcoin is now considered by some important for our future
| finance system.
|
| Really? give us a source, one who isn't either a grifter, a
| shill, or a criminal.
| meowkit wrote:
| https://research.stlouisfed.org/publications/review/2021/02/.
| ..
|
| Bitcoin may not be around for ever if it isn't upgraded to be
| more efficient, but public and private blockchains are here
| to stay and have real use cases.
|
| You can be a salty Luddite if you want, but assuming
| proponents are mostly grifters, shills, or criminals just
| tells me you don't have a clue.
| moonbug wrote:
| "As such, DeFi may potentially contribute to a more robust
| and transparent financial infrastructure."
|
| check your comprehension.
| RIMR wrote:
| Does it count if they're all three?
| tw04 wrote:
| How many of those directly convert electricity into profit?
|
| How many of those businesses have been rent seeking
| countries/states/locations that subsidize electricity for their
| populations?
|
| Electricity is one of those things most of society has deemed
| an essential good, and as such has subsidized it for the
| poorest among us. Bitcoin farmers are abusing that system to
| turn the government subsidies into personal profit for a
| handful.
|
| Let's not even begin to equate THAT to someone going to a
| concert put on for the benefit of and at the cost to those
| participating.
| ha4fsd3fas wrote:
| Well it's like any other business that runs on electricity.
| AWS converts electricity directly into profit. They provide a
| service for paying customers, just like a miner does. I'm
| sure many datacenters are located in places where electricity
| is cheap, hell I bet some datacenters get it even cheaper
| with lobbying.
| tw04 wrote:
| Can you list an example of AWS building a datacenter, in
| secret, in a location with subsidized power? I _GUARANTEE
| YOU_ Amazon lets the local municipality know when they 're
| building a new datacenter and they aren't getting
| subsidized rates.
| ric2b wrote:
| > Electricity is one of those things most of society has
| deemed an essential good, and as such has subsidized it for
| the poorest among us.
|
| Sounds like an argument for giving subsidies to the poor
| instead of anyone using electricity.
| _jal wrote:
| Watching porn and playing video games do not have structural
| ratchets essentially forcing ever-greater porn-watching or
| game-playing.
| pattisapu wrote:
| Wait a minute . . .
| wcarron wrote:
| > Being judgmental about how others use energy they pay for
| reeks of hypocrisy, virtue signaling and holier-than-thou
| attitude.
|
| No, seeing a bunch of rich nerds wasting massive amounts of
| energy in a time of environmental crisis so they can make
| millions convincing people a store of value is actually a
| currency, and then getting mad about it, is not hypocritical.
|
| > While not everybody agrees, this may be more important than
| countless other ways we use energy,
|
| It's not. It's a massive waste. Stop killing the planet.
| saalweachter wrote:
| Hell, just consider that it's a store of value that costs
| $12B+ / year to secure.
| nelsonenzo wrote:
| > reeks of hypocrisy says the bitcoin holder that profits from
| it's adoption.
| nickpp wrote:
| I own zero cryptocurrency, they are not aligned with my
| investment strategy. But I do think they are an experiment
| worth pursuing.
| louwrentius wrote:
| That energy consumption provides a ton of benefits for a very
| large group of people.
|
| The energy consumption of Bitcoin makes a few thousand people
| rich and that's about it.
|
| Yes other things consume a lot of energy, maybe even more, but
| that doesn't justify the energy consumption of Bitcoin.
| A4ET8a8uTh0 wrote:
| I mostly agree. As long as the price of energy is adequately
| priced, we should be able to make our own decisions on what
| amenities we need. You need a F150? Great, but be prepared to
| pay for its use. Naturally, the question immediately becomes,
| who decides what is adequate, which is not fun.
|
| Incidentally, I am learning about bitcoin now since it is
| clearly becoming mainstream and it is related to my job. I am
| trying to build a miner ( I don't want one click zerohash
| solutions for variety of reasons ) on Ubuntu derivative ( POPos
| ) and now I am stuck troubleshooting pool connections. Anyone
| could recommend a reliable resource? I am starting to get
| really aggravated by having to google every single error
| encountered.
| Nursie wrote:
| > As long as the price of energy is adequately priced.
|
| It's not, and doing so is a hard problem, requiring a global
| solution, against the wishes of many interests and
| industries. It doesn't seem likely any time soon.
| game_the0ry wrote:
| Agreed. Governments and financial institutions are having to
| resort to "virtue" and "value" arguments against bitcoin,
| instead of technical arguments:
|
| - Bitcoin consumes so much energy! Think of the planet!
|
| - Iran, China, and Russia mine bitcoin! They are our enemies!
|
| Indeed it does reek of hypocrisy. Oh, now you care about the
| environment and international competition? Please...
| RIMR wrote:
| But here's the thing: This article didn't say anything bad
| about Bitcoin's energy usage. It's simply quantifying it.
|
| If quantifying the energy usage of Bitcoin makes you angry, you
| should probably self-reflect a bit.
|
| This is a very unbiased source, and nothing they have published
| is untrue.
| gnramires wrote:
| The problem is that Bitcoin doesn't _need_ to use this much
| energy. We 've now discovered distributed consensus algorithms
| that don't rely on Proof of Work, so it's really quite terrible
| we still waste so much by using an outdated consensus
| algorithm.
| bcheung wrote:
| A lot of the interest in BTC is driven by media and the fact
| that it is the oldest and original blockchain solution. The
| newer solutions like Ethereum, and even newer like Cardano
| and Polkadot are game changing because they use proof of
| stake instead.
|
| Bitcoin can be used as a store of value (among other garbage
| text that people have thrown into the blocks as a joke) but
| the newer blockchain solutions also allow from "smart
| contracts" which BTC does not.
|
| Personally I don't see why Elon Musk invested so much in BTC
| instead of things like ETH which are much better solutions
| and stores of value.
| ric2b wrote:
| I'm not aware of any other consensus algorithm that is proven
| to be as secure as PoW.
| gnramires wrote:
| Proof of Stake has proven quite robust. None of the larger
| PoS coins have been compromised (despite much theoretical
| discussion), and newer ones such as Cardano seem to address
| early objections. Peercoin has been around for a while
| without any issues.
|
| The fact is, I see all of those massive distributed
| consensus algorithms as much more robust than they appeared
| initially. 51%/double spend attacks in practice are
| extremely hard to occur because of the exposure/publicity
| of the ledger and how hard it would be to capitalize on
| crashing the currency (PoS/PoW does not change it).
| ric2b wrote:
| > Proof of Stake has proven quite robust.
|
| They're not mathematically provable and the jury is still
| out. Attackers who know some exploit might be waiting for
| the much larger Ethereum to switch to PoS so they can
| reap maximum profit.
| cstein2 wrote:
| Here's the paper of Cardano's provably secure PoS
| algorithm https://eprint.iacr.org/2016/889.pdf
| bcheung wrote:
| They are known as "proof of stake".
|
| The way it works is that "validator" nodes confirm the
| blocks. The validators are randomly chosen based on the
| percentage they have staked.
|
| You stake by owning the coin and locking it up using a
| staking mechanism tied into the protocol. This locks up
| your coins for a set period of time.
|
| If a validator does not validate correctly or fakes the
| transactions then they run the risk of being "slashed".
| Slashing means they forfeit what they have invested.
|
| Usually you need to stake $10K+ USD but there are also
| pools where people can combine their money.
|
| Both pools and proof of work mining farms suffer from large
| groups consolidating the validation power.
|
| One of the newer blockchains (Caradano) introduces the
| concept of a penalty for large pools in favor of having
| lots of smaller validators to make the network more
| resilient to a single group having too much validation
| power. This encourages decentralization.
| maclured wrote:
| > How much energy does watching porn consume?
|
| Just about all of mine
| ausbah wrote:
| and this post reeks of missing the point. people should be
| judged for how they consume energy because excess consumption
| is simply wasteful, and in the middle of the ongoing global
| catastrophe called climate change - isn't something we can
| exactly afford
|
| obviously this raises the question of what is and isn't
| excessive, but I think there are apparent cases where the
| benefits of excessive energy consumption people clearly don't
| out weight the cost - see flying, cruises, rampant shopping,
| etc.
|
| I think Bitcoin and similar cryptocurrencies fall into that
| category, especially when there are other coins that require
| nearly as many resources to function
| [deleted]
| minitoar wrote:
| The almighty dollar rights all wrongs. If I'm paying for it,
| what do you care? This is a slightly dressed up Tragedy in The
| Commons.
| alecbz wrote:
| Yeah I don't really understand -- normally people buying
| things (energy) at a price the supplier is willing to sell is
| good. If energy is priced appropriately, this shouldn't be a
| problem.
|
| Are people concerned with the negative externalities of
| energy usage? If so, it seems like the real issue is that all
| energy use is "bad", anything that causes people to severely
| increase their energy usage is especially bad, and bitcoin is
| one such thing.
|
| But even though it's bitcoin in practice, the real issue
| seems like not being able to correctly price energy.
| js8 wrote:
| > If energy is priced appropriately, this shouldn't be a
| problem.
|
| It's not a problem only in the ethical framework of the
| free market, where the morality of any kind of consumption
| is judged only by its cost to society.
|
| So for example, in the free market ethics, it's perfectly
| acceptable, when the water is generally scarce, for
| somebody to have a swimming pool in their garden
| (definitely not a necessity in that situation), as long as
| he can pay for it.
|
| But many, if not all, societies do not fully accept this
| ethical framework. Often, we collectively agree to limit
| frivolous usages of extremely scarce resources.
| Nursie wrote:
| > Are people concerned with the negative externalities of
| energy usage?
|
| YES.
|
| > anything that causes people to severely increase their
| energy usage is especially bad
|
| YES.
|
| This is not hard. The earth's climate is being affected by
| the emissions from our energy demands. Most nations are
| trying to control emissions and one major way of doing that
| is energy efficiency. Bitcoin comes along and is anti-
| efficient, incentivises using as much power as is still
| (just about) profitable in mining, and creates nothing but
| a speculative financial instrument on the back of it. It
| looks like the worst kind of insult to anyone that gives a
| crap about climate change.
| alecbz wrote:
| Maybe this is too idealistic, but like I said, the root
| issue feels like energy not being priced correctly (i.e.,
| in a way that captures the true costs of energy
| consumption to the climate/planet).
|
| Rough analogy to "safer systems over safer processes": if
| an intern presses a big red button that brings down
| google, the problem isn't that they pressed that button,
| it's that there's a button any intern can just press to
| bring down google.
|
| The fact that the market allows trades that are net
| negative is a bug. Bitcoin just happens to be the intern
| that pressed the button.
|
| BUT, if we're in a state where we can't get rid of the
| big red button, it seems reasonable to get people to stop
| pressing it in the interim.
| Nursie wrote:
| Pricing in the 'true' externalities is a hard problem in
| itself to define. It's a problem that would require some
| sort of global standard (maybe in 20 years then), and one
| that would be pushed back upon by a large number of
| industries and interests.
|
| There are baby steps in some places, and there is massive
| progress in some countries towards renewables and carbon-
| zero energy. But in the current state, huge increases in
| energy consumption are a bad thing.
|
| So I think we're in a state where we could potentially
| get rid of the big red button but a lot of people don't
| really want to and the realistic chances of doing so are
| basically zero. And in that situation, yes, we call out
| the button pressers.
| jeromegv wrote:
| What if the externality is not into the price? When the
| externality of it (pollution, global warming, etc) is not
| within the price, then yes, we do care, because you aren't
| paying the true cost and you transfer that cost to me.
|
| If you have a carbon tax? Then sure. But if you dump all your
| emission on the rest of us and wash your hand because "you
| paid for it", then yes, we will question the value of a waste
| of energy because that's really the only thing we can do.
| minitoar wrote:
| Yes, you are agreeing with me. A tragedy in the commons is
| a negative thing. That's why I used that language.
| IndySun wrote:
| Some people do say that whatever anything costs is what it is
| worth.
| UncleMeat wrote:
| Climate change. Carbon taxes don't exist right now. So you
| _aren 't_ paying for it.
|
| People who use disproportionately large amounts of
| electricity should absolutely be judged (yes, this includes
| things other than btc).
| minitoar wrote:
| Yes, I agree. This is why I described it as a tragedy in
| the commons.
| ForHackernews wrote:
| Mining a single bitcoin block takes way way more energy than
| every one of the things you listed. Somebody on a different
| thread estimated you could drive a Tesla down the whole
| California coastline for the energy used processing a single
| BTC transaction.
|
| So yes, I absolutely do judge people who leave an SUV idling in
| their driveway 24/7 because "you never know when I'll need to
| jump in and run away from government agents"
| noch wrote:
| > Somebody on a different thread estimated you could drive a
| Tesla down the whole California coastline for the energy used
| processing a single BTC transaction.
|
| _Bitcoin energy consumption is not a function of the number
| of transactions_. A node broadcasts a transaction which
| miners then include in a block which, within limits, can have
| an arbitrary number of transactions. It is the Proof of
| Work(PoW) contest to find a valid hash for the block at a
| certain level of difficulty that creates a valid block.
|
| Further, with Layer 2 solutions, a single transaction in a
| Bitcoin block can be "dense" with the value of an arbitrary
| number of transactions that occurred in Layer 2. That is
| Bitcoin providing the settlement layer.
|
| Importantly, because Bitcoin is a timechain where the current
| blockheight represents the entire history of Bitcoin.
|
| "The average cost per transaction isn't an adequate metric
| for measuring the efficiency of Bitcoin's PoW, it should be
| defined in terms of the security of an economic history. The
| energy spend secures the stock of bitcoin, and that
| percentage is going down over time as inflation decreases. A
| Bitcoin "accumulates" the energy associated with all the
| blocks mined since its creation. LaurentMT, a researcher, has
| found empirically that Bitcoin's PoW is indeed becoming more
| efficient over time: increasing cost is counterbalanced by
| the even greater increasing total value secured by the
| system."[0]
|
| [0] : https://danhedl.medium.com/pow-is-efficient-
| aa3d442754d3
| sharpneli wrote:
| > within limits
|
| And those limits come up to the theoretical maximum of was
| it 7 or so and in practice around 4
|
| https://www.blockchain.com/charts/transactions-per-second
|
| Also PoW is hilariously inefficient. Because the amount of
| energy one needs to spend is basically related to the
| amount of value one could grab by cheating, so if all
| economy would be based on Bitcoin we'd be talking about
| basically cooking the planet due to PoW.
|
| When Satoshi originally devised PoW it was more about
| owning the hardware and using that as basis for voting.
| Energy costs were miniscule. He simply didn't foresee the,
| now obvious, result that it will became a function of
| burned energy rather than amount of hardware out there.
| noch wrote:
| > And those limits come up to the theoretical maximum of
| was it 7 or so and in practice around 4
|
| > https://www.blockchain.com/charts/transactions-per-
| second
|
| The link you provided indicates transactions added to the
| mempool per second! The mempool is a cache of broadcast
| transactions from which miners pick transactions to be
| added to the next block.
|
| At the current block height, 2700 transactions were in
| the block. https://mempool.space/block/000000000000000000
| 07a3688746c1d0...
|
| > Also PoW is hilariously inefficient. Because the amount
| of energy one needs to spend is basically related to the
| amount of value one could grab by cheating
|
| Your statement is entirely unclear. Could you restate it?
| For Steelman purposes, I'll ignore the non-sequitur about
| cheating.
|
| You claim that algorithm x is inefficient in absolute
| terms? Assuming you're an engineer, you know that
| engineering operates by comparisons and tradeoffs. PoW is
| how Bitcoin provides final settlement of transactions and
| unforgeable costliness compared to existing systems of
| money (e.g. fiat) and money transfer(e.g. visa, paypal,
| swift) which are all centralised and built for
| censorship, while bitcoin is decentralised and censorship
| resistant. And it provides final settlement of
| transactions every hour for thousands of transactions.
| "Finality" and "Unforgeability" are the terms you should
| attend to. These are both tied to hashrate which is tied
| to the profitability of mining the heaviest chain.
|
| "Bitcoin has unforgeable costliness, because it costs a
| lot of electricity to produce new bitcoins. Producing
| bitcoins cannot be easily faked [..]" [0]
|
| "So what are settlement assurances exactly? They refer to
| a system's ability to grant recipients confidence that an
| inbound transaction will not be reversed. Wire transfers
| using a messaging system like SWIFT are popular in part
| because they are practically impossible to reverse. They
| are considered safe for recipients because originating
| banks will only release the funds if they are fully
| present in the sender's account. [...] recipients of a
| Bitcoin transaction can have extremely high confidence
| that, once buried under a few blocks, a transaction is
| unlikely to be reversed."[1]
|
| > When Satoshi originally devised PoW [...] Energy costs
| were miniscule.
|
| I'm not sure what you mean. In general, energy costs seem
| to be dropping over time
| https://ourworldindata.org/grapher/levelized-cost-of-
| energy
|
| > [Satoshi] simply didn't foresee the, now obvious,
| result that it will became a function of burned energy
| rather than amount of hardware out there.
|
| I'm wary of trying to interpret Satoshi, but here are his
| own words:
|
| "I think the case will be the same for Bitcoin. The
| utility of the exchanges made possible by Bitcoin will
| far exceed the cost of electricity used. Therefore, not
| having Bitcoin would be the net waste. [...] Each node's
| influence on the network is proportional to its CPU
| power. The only way to show the network how much CPU
| power you have is to actually use it." [2]
|
| [0]: https://medium.com/@100trillionUSD/modeling-
| bitcoins-value-w...
|
| [1]: https://medium.com/@nic__carter/its-the-settlement-
| assurance...
|
| [2]: https://satoshi.nakamotoinstitute.org/posts/bitcoint
| alk/327/
| sharpneli wrote:
| 2700 transactions for 10 minutes comes at 4.5 per second.
| So yeah, matches.
|
| > Your statement is entirely unclear. Could you restate
| it? For Steelman purposes, I'll ignore the non-sequitur
| about cheating.
|
| By cheating I meant making a sidechain that would become
| longer than the mainchain, thus enabling a double
| spending attack. If the amount of money to be made in
| double spending attack is higher than honest mining
| someone will make it, the only thing protecting against
| that is that the cost of mining must be large enough
| compared to value being transferred.
|
| >I'm not sure what you mean. In general, energy costs
| seem to be dropping over time
|
| Back when it was CPU mined. Before even the first GPU
| mining. It was just about proving that you have an actual
| HW dedicated into the task.
|
| Exactly as mentioned in the quote that you said. He
| didn't have a clue that it would become dedicated HW that
| has only a single function, burning energy to calculate
| SHA256 and nothing more.
|
| Also do note that the whole concept of non mining node
| was foreign. Instead of the original design of nodes that
| mine we're in situation where nodes don't mine and most
| mining happens in centralized farms.
| noch wrote:
| > By cheating I meant making a sidechain that would
| become longer than the mainchain, thus enabling a double
| spending attack.
|
| A double spend attack can only spend the attackers coins.
|
| > If the amount of money to be made in double spending
| attack is higher than honest mining someone will make it,
| the only thing protecting against that is that the cost
| of mining must be large enough compared to value being
| transferred.
|
| That's precisely the game theory and why the network
| remains secure. It's addressed in the whitepaper and
| fundamental. Economic incentives are the security model.
| [0]
|
| I'm not sure what the rest of your points have to do with
| settlement finality and assurances so I can't address
| them.
|
| There's been a decade of analysis of Bitcoin engineering.
| I'm yet to hear anyone venture an original criticism that
| hasn't been rigorously and extensively rebutted already
| since genesis.
|
| [0]: https://blog.lopp.net/are-chinese-miners-threat-
| bitcoin/
| Grustaf wrote:
| The only reasonable metric is energy usage per NECESSARY
| effect. If bitcoin spends inordinate amounts of energy on
| storing historic transactions, that is not our problem.
| That is not a value most people care about.
| noch wrote:
| > That is not a value most people care about.
|
| People in a free market pay for what they care about. To
| date, those who use Bitcoin have been happy to pay for
| the energy the network consumes. In the end, that is all
| that matters.
| bccdee wrote:
| Markets don't account for externalities. That's the
| reason this is an issue -- people as individuals are
| willing to pay for the energy they spend mining
| cryptocurrency, but as a society it's a huge waste of
| energy and a massive source of carbon that is entirely
| unnecessary. Like, I don't just want to say "the tragedy
| of the commons" over and over again, but you can't just
| wave your hands and go "the free market will ensure that
| we don't emit too much carbon"
| noch wrote:
| > individuals are willing to pay for the energy they
| spend mining cryptocurrency, but as a society it's a huge
| waste of energy and a massive source of carbon that is
| entirely unnecessary.
|
| Society is made up of individuals. Assuming you don't
| believe a small cabal of individuals should, in the name
| of society and ideology, force other individuals to
| follow their dictates, the questions then are:
|
| - will eliminating Bitcoin really reduce carbon emissions
| to a meaningful extent compared to other sources of
| carbon emissions?
|
| - How much are individuals willing to pay to reduce
| carbon emissions? i.e. skin in the game. One way to pay
| to reduce Bitcoin's carbon emissions would be to
| sufficiently/relentlessly short Bitcoin to tank the price
| or develop/invest in an alternative green currency and
| let the market decide which is best.
|
| - How much, in carbon emission, are individuals willing
| to pay for the benefit of a given technology like
| Bitcoin?
| Grustaf wrote:
| You really don't get the concept of "tragedy of the
| commons" do you? The problem is that the people that use
| bitcoins are not the only ones that pay for them.
|
| We all pay because of the negative externalities involved
| with producing electricity. They are not part of the
| price of electricity currently.
|
| If all countries had robust carbon taxes or similar
| schemes, then you could possibly argue that the price of
| bitcoin reflects their true cost. Possibly. But
| definitely not now.
| noch wrote:
| > If all countries had robust carbon taxes or similar
| schemes, then you could possibly argue that the price of
| bitcoin reflects their true cost. Possibly. But
| definitely not now.
|
| This contradicts your earlier point that markets can't
| resolve negative externalities. Presumably a tax will
| cause a marked market response.
|
| Further, Bitcoin's price is a reflection of demand, not
| cost. In the long run, however, the price of any currency
| will likely converge to its cost of production, which is
| also why fiat is fundamentally a poor store of value.
|
| > You really don't get the concept of "tragedy of the
| commons" do you?
|
| The tragedy of the commons is mostly in the word
| "commons", as opposed to "private property".
|
| I merely have a different opinion on how negative
| externalities should be resolved. [0]
|
| > We all pay because of the negative externalities
| involved with producing electricity [...]
|
| Such a statement is too nebulous to be useful. Consider
| that what "we" pay is entirely subjective based on what
| individuals value. I know people who care deeply about
| every part per millon of carbon emission while others
| don't. How then do you propose to determine what "we"
| pay? Who is this "we"?
|
| Are you going to somehow convince nonplussed people that
| they are paying for some particular externality that they
| don't care about? Suffering and loss are subjective.
|
| You want carbon taxes, enforced by some authority who can
| presumably accurately determine the correct price for
| such things. All I can say is good luck.
|
| And how many other externalities would you like taxed? At
| what granularity? Perhaps households or individuals
| should pay carbon taxes too? What about all that energy
| wasted on Christmas lights?[1] What's your preferred
| maximum level of elictricity production that will
| guarantee carbon neutrality? Is carbon neutrality the
| most important thing and everything else a distant
| second?
|
| However, for those who care deeply about the matter, they
| can make their preferences and values felt right now and
| every day in the market, which is especially easy to do
| in cryptocurrency markets.
|
| Organise a coalition to short Bitcoin to protect the
| environment. Surely there are many of you just on HN
| alone given that this article was on the front page.
| Shorting is a form of taxing. Drive the price to 0. Save
| the environment. If one is not willing to have skin in
| the game to stop Bitcoin's energy consumption, they are
| just larping as saviours of the environment.
|
| [0]: https://mises.org/library/austrian-theory-
| environmental-econ...
|
| [1] https://www.nsenergybusiness.com/features/christmas-
| lights-e...
| Grustaf wrote:
| > This contradicts your earlier point that markets can't
| resolve negative externalities. Presumably a tax will
| cause a marked market response.
|
| Not at all. Things like carbon taxes internalise the
| externalities. It makes all electricity consumers pay the
| true cost of electricity, at least as far as can be
| determined.
|
| I know that libertarians are as dogmatic as any marxist,
| but it seems to me that you should be more interested
| than anyone else in internalising the true cost of things
| into their price?
|
| If you want to rely on the market as much as possible,
| then all the more reason to make sure that the cost of
| making things includes all the costs. Only then can
| consumers make a considered purchase.
|
| As the text in your link so eloquently puts it:
|
| "Social inefficiency arises when the social costs
| associated with external effects, such as air or water
| pollution, are not incorporated into the cost of
| producing the pollution generating product or its market
| price."
|
| Almost every single one of your statements here reflect a
| misunderstanding of my argument, basic economics and/or
| your own Austrian philosophy.
| noch wrote:
| > Almost every single one of your statements here reflect
| a misunderstanding of my argument, basic economics and/or
| your own Austrian philosophy.
|
| You think I don't understand my own thoughts (which
| aren't Austrian but merely mine). Meanwhile I think you
| don't understand what I'm expressing. Thus, we agree to
| disagree. Thanks for the conversation. Bonne chance.
| Grustaf wrote:
| The link you posted to refute my points very clearly and
| eloquently repeated my point.
| Grustaf wrote:
| I'm not saying people are not willing to pay for it, I'm
| saying it's inefficient and specifically that the metric
| mentioned is not relevant.
| noch wrote:
| > I'm saying it's inefficient
|
| Compared to what else that provides a decentralised,
| censorship resistant monetary network without trusted
| third parties required to secure it?
|
| > the metric mentioned is not relevant
|
| It's relevant in explaining the energy usage relative to
| economic value and architecture of an engineered monetary
| system.
|
| If you have a metric that can explain Bitcoin's design
| and value proposition with respect to energy consumption
| better than Dan Held's explanation, you should propose it
| and logically demonstrate your idea's superior
| explanatory and predictive power.
| Grustaf wrote:
| > Compared to what else that provides a decentralised,
| censorship resistant monetary network without trusted
| third parties required to secure it?
|
| I don't particularly feel that any of those
| characteristics are very important, and I think most
| people would agree.
|
| > It's relevant in explaining the energy usage relative
| to economic value and architecture of an engineered
| monetary system
|
| Again, that is not how you construct a metric for how
| cost efficient something is. You start with the "job to
| be done" of the object. And storing all historical
| transactions forever is seldom desirable.
|
| If you want to measure the efficiency of electric cars vs
| combustion engine ones you look at things like miles/Wh
| or CO2 emissions/mile.
|
| You DON'T look at explosions per second or something like
| that. It might explain how combustion engines work but it
| is not the goal of a car.
| ForHackernews wrote:
| Furthermore nothing about bitcoin is "necessary", even in
| some loose consumer-demand sense of the term.
|
| - There are other, better cryptocurrencies that don't
| bake the planet.
|
| - There are other, better financial infrastructures that
| process more transactions and provide a better stable
| store of value.
|
| - There are other, better distributed computing networks
| that do more than calculate sha256 over and over again.
| ric2b wrote:
| That argument is similar to saying a nuclear power plant
| is ridiculously expensive because it started operating
| last week and is currently only connected to a single
| factory.
|
| The energy usage of Bitcoin doesn't meaningfully go up
| with more transactions, so pretending that each
| transaction uses some specific amount of energy is just
| misleading.
| ForHackernews wrote:
| > The energy usage of Bitcoin doesn't meaningfully go up
| with more transactions,
|
| No it just always always goes up regardless of
| transaction volume as the block-difficulty increases
| infinitely. You've built a system that _by design_ can
| literally only become less efficient.
|
| It's actually even worse and stupider than if it were a
| per-transaction energy usage.
| noch wrote:
| > No it just always always goes up regardless of
| transaction volume as the block-difficulty increases
| infinitely.
|
| [sigh] The difficulty adjustment is so a block is issued
| on average every 10 minutes. It therefore does not
| increase infinitely but both increases and decreases
| depending on the amount of hashpower in the network.
|
| https://en.bitcoin.it/wiki/Difficulty
| ForHackernews wrote:
| Has it ever decreased?
|
| > What is the maximum difficulty?
|
| > There is no minimum target. The maximum difficulty is
| roughly: maximum_target / 1 (since 0 would result in
| infinity), which is a ridiculously huge number (about
| 2^224).
| noch wrote:
| > Has it ever decreased?
|
| Obviously.
|
| https://www.coindesk.com/bitcoin-mining-difficulty-large-
| dro...
| ashtonkem wrote:
| That's a neat slight of hand trick you've pulled off there,
| connecting Bitcoin to entertainment in order to shame those of
| us concerned about Bitcoin energy usage.
|
| Everything else you've listed provides subjective value to the
| user, which makes them hard to attack. Who can say what the
| value of skiing is to a society in terms of kWh? There is no
| way to objectively compare the value of energy spent on a ski
| lift vs. driving to see friends; that's all subjective value.
|
| But the issue is that Bitcoin isn't supposed to provide
| subjective value, it's supposed to provide _objective_ value;
| it's literally supposed to be money. Once you remember that
| it's supposed to literally be money, then comparisons to ski
| lifts become extremely disingenuous. It also becomes fair to
| compare Bitcoin against other competitors that provide the
| exact same service to society, comparisons that make Bitcoin
| look very wasteful indeed.
| undefined1 wrote:
| it does provide objective value. bitcoin is a store of value.
| digital gold.
|
| even if it never proves to be a viable currency, a secure
| digital store of value is objectively useful. especially if
| you're in a country experiencing institutional failure, risk
| of hyperinflation and so on.
| ashtonkem wrote:
| > it does provide objective value. bitcoin is a store of
| value. digital gold.
|
| The only reason I don't laugh at these arguments is because
| I'm utterly exhausted by hearing them. The value prop for
| bitcoin is, fundamentally, circular. It's valuable because
| it's money (like gold!), but when you point out how it's an
| objectively crap currency, it's suddenly a store of value.
| When you ask why it has value, it's because it's the
| currency of the future. Round and round it goes.
|
| > even if it never proves to be a viable currency, a secure
| digital store of value is objectively useful.
|
| I mean, you're just asserting that it stores value. But,
| _why_ does it have value?
| [deleted]
| ric2b wrote:
| > But the issue is that Bitcoin isn't supposed to provide
| subjective value, it's supposed to provide objective value;
| it's literally supposed to be money.
|
| Money's value is also subjective, I'm not sure what you think
| is objective about it.
|
| Sounds like you're just trying to dodge the comparison.
| ashtonkem wrote:
| Definitionally, money's value is not supposed to be
| subjective.
| dragonwriter wrote:
| > Definitionally, money's value is not supposed to be
| subjective.
|
| Not only is that not true, but if to was it would just
| render "money" a non-concept, because definitionally
| value (in general, not just of money) _is_ subjective.
| ashtonkem wrote:
| Ah, the "everything is subjective" rabbit hole. No
| thanks, that's never a useful conversation.
|
| The purpose of any monetary system is to facilitate the
| exchange of goods and services. That's why humans make
| money; to avoid the need to barter or depend on social
| credit systems that don't scale well. This provides us
| some objective goals with which we can compare and
| contrast monetary systems against; while what one does
| with money is subjective, we can objectively compare the
| efficiency and ease with which a monetary system can
| facilitate transactions. In this area Bitcoin does
| _terribly_. This is probably why Bitcoin advocates have
| mostly moved onto "it's a store of value", that's more a
| more defensible proposition.
| dragonwriter wrote:
| > Ah, the "everything is subjective" rabbit hole
|
| "Everything is subjective" is a (reasonable)
| epistemological argument about all access to data about
| the world being through subjective lenses, and thus all
| conclusions about the world being grounded in
| subjectivity. But that's _not_ the sense in which value
| _specifically_ is subjective.
|
| Value specifically is subjective because value is
| dependent on the subjective utility functions of people
| who have (or who might seek to acquire) the good and it's
| competing/alternative goods.
|
| > This provides us some objective goals
|
| That's about the value of a _monetary system_ not the
| value of _money_ , but both the specific goals, and more
| particularly how they are weighted against each other,
| remain subjective and the source of considerable
| disagreement.
| ric2b wrote:
| > we can objectively compare the efficiency and ease with
| which a monetary system can facilitate transactions.
|
| Ok. How much does ease of use matter for the value of a
| currency? 50%? 20%? 80%? What about all it's other
| characteristics?
|
| You can certainly be objective when comparing each
| characteristic in isolation but the value of the currency
| depends on how all of them are weighted against each
| other, and that is completely subjective.
|
| Just like the value of anything else. Even the same
| person might change the weights they use to value
| something depending on what's going on in their life.
| ashtonkem wrote:
| Ah, I see where this went wrong. I really should have
| been using the word "utility", not "value". This would've
| gone much smoother if I'd used that word throughout
| instead of "value".
|
| The original poster's argument was that we all "waste"
| power watching pornography and going on skiing trips, so
| how dare we judge Bitcoin. My counter argument is that
| they're mixing up energy usage between subjective and
| objective utility in an attempt to shift Bitcoin into a
| harder to compare category.
|
| Subjectively, how can we judge the relative utility of a
| kWh spent on entertainment? The utility of each of the
| activities listed (minus Bitcoin) are all literally in
| the eye of the beholder; we can't possibly hope to
| compare the utility of a kWh spent on pornography vs.
| skiing. Obviously we can compare energy usage per minute
| of each, but comparing the utility of a kWh spent running
| a ski lift vs. PornHub's servers really just breaks down
| to which form of entertainment you value more.
|
| My issue is that Bitcoin is supposed to do something
| objective; it's supposed to be money. This means that we
| absolutely can (and should!) sit down and compare it
| against its alternatives on numeric values, such as kWh
| consumption. The moment one starts actually comparing
| Bitcoin against its direct competitors in measurable
| categories it starts looking really bad, which is
| probably why its proponents try to prevent that.
|
| > You can certainly be objective when comparing each
| characteristic in isolation but the value of the currency
| depends on how all of them are weighted against each
| other, and that is completely subjective.
|
| Back to value now.
|
| Ideally currencies aren't supposed to have value per se,
| rather other things are supposed to have value in terms
| of it. Obviously this runs into the reality of multiple
| currencies and exchange rates, but at the local level it
| actually works this way. You and I might disagree about
| the relative value of a product, but we express our own
| disagreement in terms of dollars. We don't disagree about
| the relative value of the dollar itself. This is why
| inflation is usually measured in the shift of common
| goods and services in terms of dollars, since measuring
| the value of the dollar itself is a fool's errand.
|
| As far as the value of Bitcoin _in terms of USD_ , that's
| a subject that has been pretty thoroughly dug into. I
| doubt that I'll add anything new and interesting here.
| ric2b wrote:
| What do you mean by "objective value"? My belief is that
| such a thing doesn't exist.
| boh wrote:
| I mean it's just a standard economic argument concerning the
| use of scarce resources. All your examples have a higher impact
| on the real economy vs. Bitcoin. As in, these industries employ
| large numbers of people and sustain economic growth to some
| degree, in contrast Bitcoin services a comparatively limited
| population engaged in limited productive activity relative to
| its energy use.
|
| People are free to be judgmental about anything they like.
| kingkawn wrote:
| Why is not wanting to waste electricity on Ponzi schemes so
| triggering?
| bccdee wrote:
| They're emotionally invested in cryptocurrency being the
| future. When people challenge them by suggesting that it's
| basically bad all the way down, they lash out.
| Weebs wrote:
| "It is difficult to get a man to understand something, when
| his salary depends upon his not understanding it"
| Erlich_Bachman wrote:
| It is a really low form of argument to simply use the word
| "triggering". Implying that the original poster doesn't have
| any real reasoning behind what they are writing, no original
| thoughts or responsible viewpoints that they have worked on -
| instead that they are "triggered", - thus are reacting in a
| simply emotional way. Implying that somehow all of their
| argument can be simply discarded.
|
| Really? You mean that just because you have used the word
| "triggering" (there are no other meaningful arguments in your
| comment), that would somehow invalidate an argument? What
| grade is that logic from?
| kingkawn wrote:
| Lol at calling anything "low" as a form of argument and
| expecting to be heard
| bryanrasmussen wrote:
| >How much energy does watching porn consume?
|
| I guess if you got stats on how much porn they watch in
| Argentina you would be well on your way to answering this
| question. Same for the rest.
|
| I think the more interesting thing is: as bitcoin becomes more
| difficult to mine energy needs go up, but countries are working
| hard to bring their energy usage down. Can bitcoin be overtaken
| on the downward journey by a country, or will it always be
| bitcoin overtaking countries on its upward swing. Is there some
| country decreasing its usage as bitcoin increases its, and the
| two pass each other like ships in the night.
|
| What is the next country most likely to be surpassed by
| bitcoin?
| ric2b wrote:
| > as bitcoin becomes more difficult to mine energy needs go
| up
|
| Difficulty adjusts up and down as needed to maintain an
| average of 1 block every 10 minutes, it doesn't just tend to
| infinity.
|
| It's mostly correlated to the block reward, miners won't
| spend more money on energy than they get back from mining
| blocks.
| newswasboring wrote:
| I may be confused here. But the regulation mechanism to get
| to 1block/min is to ask miners to do more computations,
| right? Making the problem harder in this context does have
| the effect of more power consumed. A block is an answer to
| the riddle who's parameters are being regulated. So the
| block rate is not important, number of computations is. And
| that is directly linked with power consumption.
| ric2b wrote:
| It's 1 block every 10 minutes.
|
| The difficulty adjustment goes both ways, if blocks start
| taking longer than 10 minutes to be mined (for example if
| some large miner stops mining for some reason) the
| difficulty goes down, which likely means less energy is
| used.
|
| You're correct that the actual adjustment is on the
| number of computations, so the correlation to energy use
| isn't direct, different machines can be more or less
| efficient at making those calculations.
| newswasboring wrote:
| So basically the more popular bitcoin is, more
| inefficient it is. Great.
| ric2b wrote:
| Not necessarily, depends on the ratio between users and
| value of the block reward.
| spathi_fwiffo wrote:
| Stats not even needed.
|
| If the enegry used in Argentina <= energy used in bitcoin
| transactions.
|
| and, if people living in Argentina are doing any of the
| things listed (watching porn, etc).
|
| Then the energy used to watch all the porn in Argentina must
| still be included as part of the Energy use of Argentina;
| thus less than the use of bitcoin. (I guess this would have
| to assume the porn is also hosted in Argentina; but I would
| imagine at least 1 porn unit is hosted and viewed internally
| to Argentina).
| snickms wrote:
| If those damned Argentinians would just mine bitcoin
| exclusively, we could all get on with our lives.
|
| We also need to talk to South Africa about Youtube.
| bryanrasmussen wrote:
| obviously, but you still don't know how much greater the
| bitcoin amount is the porn amount.
|
| Also how much bitcoin is mined in Argentina, obviously less
| than 50% of the world's bitcoin - but how much less!?!
| tomxor wrote:
| A maximum of 178 things on the planet consume >= to the
| electricity of Bitcoin.
|
| 99.44%/0.56% = ~178 according to their estimate. So if you want
| to compare, the premise is that there are no more than 178
| things on Earth more valuable per watt, no more than 178 things
| to compare to... That is absurd.
| AnonsLadder wrote:
| It's hilarious to see the naysayers about Bitcoin say that BTC is
| not usable. Now it's worth almost 50 grand and all they can come
| up with is expensive transaction fees which in hindsight, are
| really not that expensive, and the energy consumption of
| maintaining the Bitcoin network.
|
| It sure is a lot better than using human lives, usually & most
| likely forced labor, to mine real Gold. Right? After all, energy
| is free when you're using solar power to mine your Bitcoins or
| any other coins. Does the energy really goes to waste when it
| provides heating? Etc?
|
| It just seems like people are running out of excuses at this
| point. I wonder what they'll be saying when BTC hits $100,000.
| lapetitejort wrote:
| > It just seems like people are running out of excuses at this
| point. I wonder what they'll be saying when BTC hits $100,000.
|
| At what price will I be able to buy a cup of coffee
| conveniently?
| kgwgk wrote:
| Twice a silly price is still just a silly price.
| enraged_camel wrote:
| >>It sure is a lot better than using human lives, usually &
| most likely forced labor, to mine real Gold. Right?
|
| Bitcoin is purported to be an alternative to fiat money, not
| gold. And most governments can print fiat money at will, with
| virtually no energy.
| bhupy wrote:
| > Bitcoin is purported to be an alternative to fiat money,
| not gold. And most governments can print fiat money at will,
| with virtually no energy.
|
| That's not completely true. Bitcoin is purported to be an
| alternative to fiat money _because_ it 's purported to be an
| alternative to gold.
|
| The argument for Bitcoin as a replacement for fiat money
| actually rolls up 2 big arguments into 1:
|
| 1. That fiat money should be replaced with money backed by
| some commodity like gold (the Goldbug argument)
|
| 2. That cryptocurrency is the ideal underlying commodity
| because it's more easily transferrable than gold.
|
| To clarify, I don't have a strong position on either of these
| arguments.
| hoseja wrote:
| And what is the cost of the massive capacity for and monopoly
| on violence that nation-states derive this capability to
| print money out of thin air from?
| stickfigure wrote:
| > governments can print fiat money at will, with virtually no
| energy
|
| I get what you're saying, but that's not really true. You
| have to account for the military spending required to
| preserve the legitimacy of your fiat currency. Any nation-
| state can afford the same printing presses you have.
| sparkie wrote:
| The State printing fiat money is essentially stealing time
| from people who have laboured to create wealth. That wealth
| is pilfered through devaluing the money supply, with those
| close to central bank who receive the new money first
| benefiting from it.
|
| Bitcoin fixes this theft problem, and demand for it will
| continue to increase for as long as this theft occurs.
|
| The only way bitcoin can be stopped is if central banks start
| contracting the supply of their money, which you and I know
| will never happen.
| [deleted]
| Proven wrote:
| That's a non-issue.
| nedsma wrote:
| People/companies who invested significantly in BTC will go to
| extreme measures to defend their investments. Anything negative
| said about BTC will be faced with various whataboutisms, how it
| uses renewables, it's a value store and other marketing talk.
| It's also pathetic that Tesla and Musk are pledging $100M for a
| CO2 capture solution, whereas in reality Bitcoin is adding 35MT
| (mega tons) of CO2 per year.
| madacol wrote:
| I think the real value in Bitcoin is its immutability. I don't
| think there's any piece of information in the world as immutable
| as the first bitcoin block mined by satoshi.
|
| This property is what powers amazing projects like OpenTimeStamps
| (https://opentimestamps.org/), this will become an essential tool
| for notaries all around the world, seriously!, and this has
| nothing to do with number of transactions, this scales to O(1)
| (you only need one transaction to prove as many things as there
| needs to be proved). Previous to bitcoin existence I don't think
| there was ever a distributed way of proving a piece of
| information existed previous to X, and even if there was, it was
| probably centralized or much much MUCH weaker than bitcoin.
| There's just no replacement, not even a million years as
| effective as bitcoin is for this, if I'm wrong please tell me! I
| want to know!
|
| Most people here in favor of bitcoin argue about inflation, I
| understand the reasoning, and I'm from Venezuela, I pretty sure
| understand that value, but that's just missing the point,
| immutability >>> inflation protection.
|
| And if we go to the smart-contracts terrain, that's a whole other
| world of very diverse and unexplored possibilities of values
| Jonnax wrote:
| From what I understand bitcoin currently has a $20+ transaction
| fee with a transaction time takes 60 minutes+
|
| With these issues in addition to the high power consumption, how
| will Bitcoin become a usable currency?
| slazaro wrote:
| Some of us ask ourselves the same thing. NANO, for instance,
| has no fees and is basically instantaneous (<1s). But unlike
| Bitcoin, Elon Musk isn't hyping it, and you can't make money by
| using computer farms, so most people don't know about it.
| charcircuit wrote:
| It's about $7 at the moment to be included in the next block. A
| new block is added approximately every 10 minutes. Since
| bitcoin does not guarantee finality some services require you
| to wait for a certain amount of extra blocks after yours to
| reduce the chance of a change reorginaztion happening that
| doesn't include your transaction.
|
| Bitcoin will not function as a currency due to it's high
| volatility. For a more usable currency look at DAI, USDT, and
| USDC which are stable coins pegged to the dollar. DAI is
| collateralized with on chain assets where USDT and USDC are
| collateralized with real life assets which are mainly regular
| USD.
| thargor90 wrote:
| The public does not have proof that USDT is collateralized
| with real life assets. I'm not sure about USDC.
| luka-birsa wrote:
| The public know that USDT is not fully collateralised with
| real life assets. This has been publicly stated on Tether
| page as well. So can we please stop parroting this USDT
| bullshit, nobody cares how tether is backed and with all
| the alternatives to USDT there is no reason to use it but
| from a perspective of ease-of-use and wider offering of
| trading pairs. You have DAI, USDC, TUSD, BUSD.... You can
| check which one is audited (USDC and TUSD) and will credit
| you fully if you need so. You can also work directly with
| USD at various reputable crypto exchanges (eg Bitstamp,
| Coinbase, Kraken).
|
| This tether FUD always resurfaces as price goes up as
| people are butthurt that they did not buy the last dip. No
| worries, history will repeat itself. This year we'll see
| BTC hit 100k+ and end the massive bull run in 250k teritory
| by 2022. After that we'll see everybody dumping their cash
| in BTC and the bubble will burst on the wings of massive
| FUD & regulatory bullshit. Bitcoin willl drop to ~20k and
| cycle will repeat.
|
| For those that weren't watching, this repeats itself every
| ~3 years for past 10 years. Keep watching the news... USDT
| stories will become more regular, next will be China bans,
| Russia bans... then we'll continue with EU regulation push,
| US regulation push, new tax laws....
|
| The only smart thing you can do is start investing a small
| amount every week and forgetting about it. Cancel two
| lattes (or lottery cards, donuts) per week and buy BTC and
| ETH instead. Imagine starting doing this in 2016, when ETH
| was launched. You bought ETH for 1 USD. Today it's hitting
| ~1700 USD. You would retire easily.
|
| Too bad you're so hard at work telling the world that
| crypto is a scam.
| dang wrote:
| Please don't take HN threads into flamewar like this. We
| ban such accounts, because we're trying for something
| significantly different on this site. Fortunately your
| account doesn't seem to have a history of this; please go
| back to avoiding it here.
|
| https://news.ycombinator.com/newsguidelines.html
| wpietri wrote:
| USDT _claims_ to be collateralized with real life assets. But
| their story keeps changing, they refuse to allow an audit,
| and they 're under serious investigation by the NY Attorney
| General. It can reasonably be thought of as a fraud that
| hasn't popped yet:
| https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
| emteycz wrote:
| I keep hearing this for years and so far it didn't pop. I
| can't trust this anymore.
| ucha wrote:
| Buying US stocks takes 2 days to settle.
|
| Sending simple wires in the US takes hours.
|
| Last time I tried to send significant funds from France to the
| UK, it took me a whole week of back and forth with the bank to
| complete all the AML/KYC paperwork.
|
| Let's not even talk about how long it would take to move gold
| from one part of the world to another cf.
| https://www.bloomberg.com/news/articles/2020-04-30/iran-is-h...
|
| You can buy or send bitcoin in seconds if you're not trying to
| do it on-chain, the same way you can do it with stocks and
| other assets. But definitive settlement of a bitcoin
| transaction is faster than pretty much any other asset.
| JumpCrisscross wrote:
| > _Sending simple wires in the US takes hours_
|
| What? No. It happens instantly at a protocol level.
| Practically, about thirty minutes. Most people don't send and
| receive wires and so don't choose bank accounts that
| prioritise them.
|
| Practically speaking, Venmo and Apple Pay and Zelle are
| frictionless and instantaneous and more widely adopted than
| Bitcoin. For heavy users of international transfers, there
| are _usually_ better solutions.
|
| There are absolutely edge cases, and so a legitimate use case
| for a cryptocurrency there, but that's not enough use to
| sustain Bitcoin's value. To say nothing of the transactional
| motivation having been long since abandoned when inconvenient
| for the current store of value one.
| ucha wrote:
| Yes sure, it takes 30 mins to send wires in a best case
| scenario it is executed immediately when you send it but
| that's not what happens in practice for most people. I do
| that regularly and it takes me a couple of hours.
|
| Venmo and co aren't "real" transfers of asset, it's an
| update to a "permissioned" database. You can make immediate
| transfers on coinbase too but they could be reversed, or
| your account could get locked just as with venmo. It is
| just as easy to have banks hold everyone's bitcoin and
| instantaneously update a database so that feature is not an
| advantage of fiat over bitcoin.
| JumpCrisscross wrote:
| > _it takes 30 mins to send wires in a best case scenario
| it is executed immediately when you send it but that 's
| not what happens in practice for most people. I do that
| regularly and it takes me a couple of hours._
|
| Your bank is not set up for wires. Try Fidelity or First
| Republic or Silicon Valley Bank. Between 10 and 30
| minutes from my hitting transfer to appearing in the
| recipient's account. Exceptions are large wires which may
| require a phone call for verification, though I can
| usually turn that off if I wanted to.
| ucha wrote:
| Ok, interesting... I think your general point is valid,
| which is that, transacting in USD with a bank is, under
| certain circumstances, simpler and faster than
| transacting in bitcoin on-chain.
|
| But you always have to rely on a third party,
| transactions can be reversed, your funds can be locked
| etc... It's completely different from say, transferring
| actual bank notes, or actual gold bars or any kind of
| transaction where a third party is not needed, you can't
| be censored and it can't be reversed.
|
| And again, everything you do with USD, you could do
| eventually do with bitcoin. If banks decide to hold
| bitcoin, they'll let you send bitcoin wires with all the
| issues associated with fiat wire. Bitcoin wires don't
| exist but they could. Permissionless, uncensorable,
| irreversible, under 1-hour USD transactions don't exist
| and they never will.
| villasv wrote:
| > Sending simple wires in the US takes hours.
|
| Joke is on you, though. Even Brazil now has instant wires
| (zero fees).
| dan-robertson wrote:
| I feel like Iran and Venezuela are bad examples as they are
| typically denied access to much of the global financial
| system. It's normally pretty easy to move gold around and
| this process is handled by banks. Of course you might not get
| the same gold bars if you move gold between countries (for
| one thing they tend to come in different sizes in different
| places) and it likely won't even be physically the same gold,
| but the banks tend to handle the arbitrage of taking physical
| gold to refineries across to move it from one market to
| another (though there were some worries this might break down
| between the US futures markets and London physical markets
| due to coronavirus restrictions)
| rjsw wrote:
| > Last time I tried to send significant funds from France to
| the UK, it took me a whole week of back and forth with the
| bank to complete all the AML/KYC paperwork.
|
| You would need to do the same paperwork with bitcoin.
|
| I have UK and French bank accounts, transfers between them
| take seconds. Transfers from the French account to any other
| Eurozone account take seconds.
| seibelj wrote:
| This comment made me laugh! Filing paperwork to send
| bitcoin? You are in outer space!
| beervirus wrote:
| Legal requirements can be surprising.
| charcircuit wrote:
| A bitcoin transaction never settles. If a longer chain is
| created without that transaction it will become the current
| state and that transaction will be effectively rolled back.
| zadler wrote:
| A bank transaction never settles. Though unlikely, it is
| possible that quantum events may sporadically reverse the
| transaction.
|
| Both are probabilistic and highly unlikely.
| charcircuit wrote:
| >Both are probabilistic and highly unlikely.
|
| A simple case of this happening with bitcoin is if the
| network fragmented. For example if a country had a
| firewall which temporarily blocked bitcoin. The country
| would continue slowly adding blocks which would likely
| revert when they reconnected back with the rest of the
| network.
| ucha wrote:
| People would only mine on the shorter blockchain if they
| think it's valid and good luck adding a country firewall
| in an undetected fashion. It will be directly visible in
| one of the two forked blockchain that a lot of the
| hashpower has vanished.
|
| If a country is behind a firewall, most likely, almost no
| new blocks will be mined because the hashrate difficulty
| will stay constant while the computational power behind
| the firewall will become too low. Blocks will be mined
| much more slowly for a period of time inversely
| proportional to the hashpower behind the firewall. Most
| likely, that chain will enter into a "mining death
| spiral".
| throw_m239339 wrote:
| > Last time I tried to send significant funds from France to
| the UK, it took me a whole week of back and forth with the
| bank to complete all the AML/KYC paperwork.
|
| How much time would it take to convert, transfer to a bank
| account AND withdraw that same amount of money from Bitcoin
| to plain FIAT?
| eternauta3k wrote:
| It could become a backbone for large transactions, while side
| chains (Dash, Eth, etc.) provide faster, smaller transactions.
| kkarpkkarp wrote:
| > how will Bitcoin become a usable currency?
|
| Wake up, this question was reasonable in 2010, maybe 2015. :)
| Today no serious person is still thinking it would be usable :)
| pjanoman wrote:
| Maybe people close to Bitcoin know it won't be a usable
| currency, but unless you closely follow bitcoin, it sure
| seems like it is built to be a usable currency. Even the name
| implies this relationship, and the idea of a 'wallet' does
| too. Tesla just recently bought $1.5 billion worth for
| exchange, no?
| 2pEXgD0fZ5cF wrote:
| The last years were the strongest indicator that bitcoin will
| not become any kind of usable currency. Seeing that it is as
| volatile as ever I'm honestly not sure what bitcoin can even
| still become except yet another abstract plaything to "invest"
| (bet) money on, the very thing it has been for a while now.
|
| Also while it is decentralized, the reality of how it is used
| is very much not. The typical use case is buying and selling it
| via an exchange, not much else. Depending on where you live you
| have to reveal more information about yourself to "just buy
| bitcoin" than you have to when opening a bank account.
| alisonkisk wrote:
| Right or wrong, the theory is that eventually it will
| stabilize and then the early adopters got a reward for
| commiting early.
|
| This isn't so different from any network.
| joshxyz wrote:
| For large transactions.
|
| Small transactions can be done on sidechains and other chains.
| Cthulhu_ wrote:
| It won't, but it's also not transferred as much because of
| cost, time, and transactions/second limit; I have no solid
| figures, but I wouldn't be surprised if 99% of actual bitcoin
| transactions are virtual, in databases on the exchanges. You
| can't do high frequency trading on the blockchain.
| jiriknesl wrote:
| I use it as a currency for years.
|
| Especially for large transactions internationally, where my
| bank asks me+the other party to fees like $30 and it takes 3
| days if everything goes well.
|
| In comparison with that, BTC for those years, gave me on
| average 40 minutes and $1 fee.
|
| This is thirty times better than what my bank provides.
| alisonkisk wrote:
| Do you feel bad that you used bitcoin to save $30 instead of
| speculating on it to make $30K?
| jiriknesl wrote:
| No. I don't use BTC as a speculative asset. I use it for
| two things:
|
| 1. when it is expensive or difficult to send money to
| places like Vietnam, post-soviet countries, Iran. 2. some
| saving in case the shit hits the fan and I will have to
| survive for a couple of months without TransferWise,
| Revolut.
| picks_at_nits wrote:
| This may not be the most constructive way to make the
| point, but this is a feature of any speculative asset. If
| the market as a whole has a very high confidence it will
| continue to rise in value, few people will want to trade it
| for goods and services unless they have no choice or can
| make even more money from the goods and services than they
| can from holding the asset.
|
| Otherwise, it's like getting options in a startup and
| spending them on pizza.
| nly wrote:
| What countries?
| jiriknesl wrote:
| Russia, Belarus, Ukraine, Vietnam, Iran
| afavour wrote:
| I use TransferWise in those situations. It works great.
| jiriknesl wrote:
| I use TW too. But it doesn't work with post-soviet
| countries. It doesn't work to Vietnam. It doesn't work to
| Iran.
| csomar wrote:
| It's already a usable currency. You overpay the fee to get your
| transaction confirmed in the next average 10 minutes. You use
| lightening (though support is still limited) to have cheap and
| fast confirmations and you settle later.
|
| Also, it's still faster and cheaper than an international
| SWIFT.
| AnIdiotOnTheNet wrote:
| It won't and even BTC enthusiasts have given up on that. They
| narrative is now that BTC is a "store of value".
| wpietri wrote:
| Exactly. Here's VC and prominent cryptocurrency enthusiast
| Fred Wilson saying exactly that:
| https://avc.com/2017/08/store-of-value-vs-payment-system/
|
| While I agree with him that Bitcoin is a terrible currency, I
| think the "store of value" thing is nonsense as well. Stores
| of value need to have relatively stable value. Bitcoin is
| hugely volatile. That's great for speculation, but nobody
| with any sense would use it as the equivalent of a savings
| account.
| gruez wrote:
| >Bitcoin is hugely volatile. That's great for speculation,
| but nobody with any sense would use it as the equivalent of
| a savings account.
|
| Consider the classic store of value asset: gold. It's up
| 17% compared to a year ago, and down 11% compared to its
| peak last august. Sure, it's less volatile as bitcoin, but
| it's hugely more volatile compared to t-bills or a FDIC
| insured bank account. Does that mean gold also isn't a good
| store of value?
| koheripbal wrote:
| Which is why fixed income products are now the go-to
| "store of value" for any corporation or high-net-worth
| individuals.
|
| Few financially savvy entities keep gold as a store of
| value.
| spinchange wrote:
| If you consider the amount of investment dollars parked
| in gold and metals relative to the amount of total
| investment dollars/flows in other financialized assets,
| isn't the answer kind of self evident? Sure, there are
| _worse_ stores of value but there are better, more stable
| (and modern) ones that are more prevalent in actual
| practice. Much of the total interest in gold is emotional
| or speculative too.
| toyg wrote:
| But the point is, it's not an exclusive choice. BTC will
| coexist with other commodities. It won't be the be-all-
| end-all of financial transactions, but it will probably
| endure.
| pradn wrote:
| Gold isn't the best store of value if stability of value
| is the only concern.
|
| In places like India, gold jewelry has a prominent
| cultural value (a part of most wedding rituals, for
| example). So its desired and even required no matter its
| price - though demand is, I imagine, pretty elastic. The
| volatility of gold prices competes with 8% inflation,
|
| Even if gold is volatile, it competes favorably in an
| investment environment where 1) cash inflates at 8% a
| year 2) private banks can often be risky, with many going
| bankrupt over the years 3) the average person has no
| access to US T-bills 4) gold can be melted any time to
| make jewelry anew, so one can always be fashionable
| (keeping the use-value of the material fresh) 5) gold can
| be pawned in emergencies, in practically every town 6)
| where access to digital banking may be spotty,
| transporting jewelry is an easy way to transport wealth
|
| A store of value has many attributes that make it a good
| store of value - ubiquity, tradability, use-value,
| transportability, its value relative to the other options
| in the investment environment.
| iexplainbtc wrote:
| Created an account just to say this but you beat me to
| it.
| boh wrote:
| Not a fan of this sort of argument logic.
|
| Y is like X to a lesser degree, and no it's not as good
| as Z, but does that mean Y is bad? We're only talking
| about X and no it's not a good store of value given the
| other options.
| alistairSH wrote:
| Yes, that's exactly what it means. Very few people
| actually use gold as a value store - they put their
| savings in various USD-based (or Euro, etc) savings
| vessels - money market, CDs, etc.
|
| Gold is generally considered a last resort for the case
| where the US completely falls apart. But if that happens,
| I'm not sure gold is going to be much use - the global
| economy will be screwed enough that everybody suffers,
| gold or no gold.
| crazydoggers wrote:
| You have to take into account that we are at the birth of
| a new asset class which means volatility is part of it.
| Look at the birth of the stock market, for example, the
| birth of industry or real estate, the list goes on.
|
| Gold has been used as a store of wealth since at least
| ancient times. So it's not quite a fair comparison.
|
| And the whole economy doesn't need to collapse for an
| asset to be valuable. The reason Bitcoin is up is because
| people looking to maintain wealth are looking to broaden
| portfolios. S&P is overvalued for some, the US dollar is
| weak for some. Fed rates are still low, bond yields are
| low. If you take into account inflation those CDs and
| Money Markets you mention lose money. An extremely good
| CD will currently earn you 1% interest, meanwhile
| inflation will remove 2%.
|
| So it doesn't need to be nonvolatile for it to be seen as
| part of a portfolio of wealth management, and it
| definitely doesn't need to only be a last resort against
| complete economic failure since almost nothing qualifies.
|
| If you don't already have a fully balanced and
| diversified portfolio, you may not need or be ready for
| Bitcoin yet... but that doesn't mean there's not
| trillions of dollars that are ready for it.
| crazydoggers wrote:
| Again, valid useful discourse just gets downvoted
| nowadays. Not HN of past.
|
| Usually constructive comments would get some actual
| criticism or disagreement rather than just downvotes.
|
| I get it... BTC sour grapes just downvote. Same thing
| happened when I called out the GME fiasco when that was
| $300 a share.
|
| But pro tip so you're not sour grapes in the future. Put
| aside you're egos, and instead of downvoting things here
| that scare you or you simply disagree with. Try using HN
| as a learning tool.
|
| If you disagree with something.. comment first... then
| downvote. Discourse, discussion, debate. Those are the
| paths to learning and understanding.
| sixQuarks wrote:
| There is $8 trillion held in gold. Whether you believe
| that qualifies as a store of value or not, if Bitcoin
| reaches the same level, each Bitcoin will be valued at
| $500,000
| bluGill wrote:
| Gold is potentially useful AFTER things get back together
| again. If there is a major disaster - US falls apart, as
| does the rest off the world. 95% of the world population
| dies, but by luck you are one of the survivors (this luck
| seems to be a factor most survivalists don't think
| about). For a few years there is chaos as people try to
| figure out how to get food without the supply chains in
| place. (worse in the cities, but even rural areas are
| dependent on the supply chain for fuel, fertilizer, seed,
| repair parts, and lots of other things)
|
| After a few years things start to settle down. Trade with
| your neighbors becomes possible for some division of
| labor. However trade works better if there is a currency.
| Paper money is either degraded (the most common bills
| last a couple years), and the replacements are all
| obviously bad copies. What is needed is something that is
| easy to verify, that is hard to copy, has some intrinsic
| value, isn't so common that you need vast quantities, and
| something you are willing to trade. There are many
| choices for this, but gold is one of the better ones.
| Even if something other than gold is chosen, it is rare
| enough, and valuable enough (for good looks, and it is
| somewhat easy to for into useful shapes) so you can
| expect to find a market for your gold. Many of the things
| you can choose instead are either useless (computers
| without the entire power grid can't do anything), or so
| common that nobody will care (why would I want your iron
| when there are junk cars everywhere with plenty)
|
| Note that in order for this to work you need to actually
| have the gold in hand. If you invest in gold without a
| safe to store it in, then it does you no good. Even if
| you can get to Fort Knox, whoever is there first won't
| recognize your claim to the gold inside.
|
| You also need to consider inflation, thousands is a nest
| egg. millions is more than the local economy needs.
| People don't need to accept your gold, unless you are the
| local warlord, and then you don't need gold.
| shawnz wrote:
| > Very few people actually use gold as a value store -
| they put their savings in various USD-based (or Euro,
| etc) savings vessels - money market, CDs, etc.
|
| Do you mean that very few people use gold as their
| only/primary store of value? I am sure many people have
| small amounts of their net worth in gold. Similarly I
| think Bitcoin is a promising technology but that doesn't
| mean I think users should allocate a significant
| percentage of their portfolio to it.
| spamizbad wrote:
| One thing I don't understand is how will gold retain its
| value during a societal collapse when most of the
| industrial demand - and the trading/insuring/transporting
| infrastructure around it - disappears? It doesn't really
| make sense as a post-apocalyptic currency since most
| people won't have any and it's utility to help you
| survive is limited.
| bluGill wrote:
| It is pretty, and easy to form in stone age processes.
| Thus it is actual useful unlike dollars.
|
| Even if gold isn't a means of currency, you can still
| trade for it because someone will be interested in buying
| it. After the collapse bonds and paper money will be
| worthless, but you can still trade gold for things.
|
| Currency is whatever we use to avoid having to create
| 10-way exchanges. (Baker offers the cobbler 600 loafs off
| bread for a pair of shoes, but cobbler doesn't want that
| many because they will obviously go stale, so we need to
| bring in dozens of other people who need bread and can
| trade something else to the cobbler). Gold is a good
| choice for this, but is isn't the only possible choice.
| spamizbad wrote:
| I'm still trying to understand why someone in the
| aftermath societal collapse would be interested in gold.
| It's something that would be useful _after_ society
| rebuilds. If I am trading it why am I trading it? What
| are people doing with it? If it's just a currency, why
| assume it would be adopted when it would be a relatively
| scarce resource.
| bluGill wrote:
| why did society collapse? It is hard to come up with
| something realistic. There are a lot of shocks that will
| make things bad for a few weeks, but society will recover
| - or at least the survivors will.
|
| I can think of two, but perhaps you can think of more.
|
| First is the local society collapse because of war. Could
| happen to everyone, and while your armies might win in
| the long run, you might be forced to flee. At that point
| gold is useful because it is small enough to hide on your
| person, thus meaning you have a chance to get it out to a
| safer area. You might not be able to prove you own
| foreign bonds (or maybe you can, but it takes years of
| paperwork). Gold still has value to the rest of the world
| in this, so if you can get out with it that is a good
| thing.
|
| A nuclear nation decides to end it all and shoot randomly
| targeted ICBMs everywhere. In this case the few percent
| of the world that survives by luck will need to start
| over. It is just your village, you can't travel far
| because of the wastelands surrounding you. Gold is useful
| because it can be formed into tools. Iron is better, but
| harder to form, and you may not have fuel to spare to
| heat it (proper heat treatment of steel is one of the
| things that makes iron useful). Gold also is pretty and
| so there will still be the jewelry aspects.
|
| Neither of the above require the gold be currency, though
| it is a good choice for currency in general in the latter
| case when starting over. (not the only good choice)
| Scarcity is part of what has always made gold useful. You
| could get it in enough quantities that most travelers
| could carry their wealth around in that form (when not in
| the form of trade goods - traveler implies trader in
| those historical days)
|
| Both of the above are long shots. I don't personally
| invest in gold because I find the risks of the above low
| enough that I don't bother to insurance against them.
| robotbikes wrote:
| If civilization collapses then I'm pretty sure bitcoins
| would be worthless as the whole mining chain collapses. I
| guess it is a good store of value in the more cyberpunk
| dystopia where large corporations continue to grow in
| influence and power and it is used to funnel funds for
| the shadow economy. I mean it is valuable because people
| with money are convinced it is valuable and that whole
| feedback loop.
| sailfast wrote:
| Sure, but any crypto coin could do that, and I doubt we
| would be using a currency as "mainstream" as bitcoin at
| this point to do it at that point because we could not
| afford the transaction costs. Probably be some privately
| issued Zaibatsu coin or something, with bitcoin use being
| reserved for the upper classes that had made it out. (OK
| I guess I've been reading too much Gibson lately)
| JumpCrisscross wrote:
| > _If civilization collapses then I 'm pretty sure
| bitcoins would be worthless_
|
| If all civilisations collapse, yes. But if _your_
| civilisation collapses, a neutral store of value is
| easier to own than _e.g._ a portfolio of foreign bonds in
| a handful of offshore accounts.
| FlownScepter wrote:
| Not really, no? When the monetary system itself is as
| unstable as it is, I struggle to think of what could be a
| good store of value.
|
| Maybe we should all just acknowledge that money is made
| up and any security it provides depends on tons of
| interconnected systems made up of people largely
| unaccountable to the layman.
|
| Edit: I think the mistake people make is trying to create
| stability on unstable ground.
| artificialLimbs wrote:
| > ... I struggle to think of what could be a good store
| of value.
|
| Land.
| mateuszf wrote:
| Land is hard to liquidate when needed, unless it's in a
| popular place.
| FlownScepter wrote:
| _the 2008 mortgage crisis has entered the chat_
|
| But yeah, fair point. It's pretty much the only 99% safe
| asset.
| machinebun wrote:
| Tell that to landowners in 1917 Russia :)
| lottin wrote:
| Gold has a reputation for being a 'safe haven' asset,
| which is not quite the same as a 'store of value'. Gold
| returns are supposedly negatively correlated with those
| of stocks and other financial assets and so holding gold
| provides a sort of protection against market downturns.
| _jal wrote:
| In other words if you're a goldbug, you now have an even
| worse option.
|
| > Does that mean gold also isn't a good store of value?
|
| You answered your own question. There's a good reason to
| prefer FDIC insurance. If your fashion choices require
| you to avoid fiat currency, that's on you.
| iforgetti wrote:
| What incentive will there be for the community to continue
| verifying transactions after all the bitcoins are mined?
|
| Is it just that the system of storage will have Ongoing
| operational cost like a vault has ongoing costs to protect
| gold?
|
| Has anyone modeled what these costs might look like?
| riffraff wrote:
| there's still a fee for just verifying transactions.
| veesahni wrote:
| I suspect transaction costs will rise when that's the
| only gain
| gorbypark wrote:
| Currently, miners get the block reward plus transaction
| fees. Miners get to pick which transactions to include in
| the blocks they are processing, so of course they only
| include the ones with highest fees. Once there is no more
| block rewards, they would would have to survive off
| transaction fees alone.
| boh wrote:
| If the economics of verifying transactions is no longer
| sustainable, the code will be updated to allow more
| mining. That's something no one wants to admit, but the
| SegWit soft fork confirmed the influence concentrated
| miners have on development. The idea that somehow Bitcoin
| just works outside of any social influence is a complete
| fallacy.
| corty wrote:
| Exactly. Miners will decide to continue mining. Probably
| in just the right amount such that inflation/deflation is
| controlled enough to create sustained profits for them.
| Thus basically acting like a central bank.
| boh wrote:
| True, and honestly this can happen before they even get
| near the mining cap, since computational costs will
| likely be unsustainable before that.
| px43 wrote:
| > What incentive will there be for the community to
| continue verifying transactions after all the bitcoins
| are mined?
|
| How are these questions still being asked, and more
| amazingly, still being upvoted? First off, there will not
| be a time when "all the bitcoins are mined". Mining
| rewards are on a geometric curve that approaches 21
| million but never touches it. Second, transaction fees
| also go to miners, so even when mining emissions are
| negligible, transaction fees will keep the miners
| incentivized to keep mining.
|
| This is all pretty much in the intro of the whitepaper,
| and the first thing you should learn if you spend 5
| minutes looking into this technology.
| p0nce wrote:
| Honest question: if there is little transactions because
| it's a "store of value", and if the mining reward
| continuously go down, why would anyone be incenticized to
| be a miner?
| mj4m1n wrote:
| When in doubt, zoom out.
|
| On larger timescales, this isn't really that much of an
| issue.
|
| Volatility is also trending downwards. The bigger it gets,
| the more stable it becomes.
| koheripbal wrote:
| Businesses don't operate on a "zoomed out" timeline.
| Volatility in the short term causes cashflow driven
| liquidity bankruptcy.
| beefield wrote:
| > The bigger it gets, the more stable it becomes.
|
| To be clear, there is no mechanism, logic or reason (at
| least revealed to me) why this would be true. Vice versa,
| increased amount of trading typically increases
| volatility.
| krona wrote:
| _increased amount of trading typically increases
| volatility._
|
| Define _amount_. If you mean number of trades, then the
| effect is decreased standard deviation if the average
| trade is smaller as a percentage of total market
| capitalisation. That seems completely logical.
|
| See: pretty much every study in to HFT.
| beefield wrote:
| Trading volume. It was taught to me so long time ago and
| I have thought it so obviously true that I haven't
| questioned it ever. If you want sources, here is one
| example (TBH, I only read abstract) I quickly googled. To
| me, number of trades does not sound a reasonable measure
| for analyzing markets in macro level, even if for HFT it
| may be interesting, I know nothing about that.
|
| https://core.ac.uk/download/pdf/4837179.pdf
| jakupovic wrote:
| If more powerful actors are owners they will not need to
| sell upon volatility hence providing more stability.
| mj4m1n wrote:
| Yes, Microstrategy or Tesla have no interest in
| daytrading.
| beefield wrote:
| I am not sure I follow the logic. Bitcoin becomes
| "bigger" when there are more big actors not using it but
| just hoarding it? And thus less volatile - until one of
| these big actors decide to dump their holdings to the
| thin market used to trade only scraps left from these big
| actors... Sorry, not convincing.
| MereInterest wrote:
| You're appealing to future data that are not available
| yet. Bitcoin has never been stable in its existence. You
| are positing without evidence that it will become stable
| in the future.
| _alex_ wrote:
| Many assets start volatile and become more stable over
| time. As more money comes into bitcoin and the market cap
| goes up, it's reasonable to assume that volatility will
| go down.
| mcosta wrote:
| Many assets start volatile and end up in a stable 0.
| mj4m1n wrote:
| https://charts.woobull.com/bitcoin-volatility/
| undefined1 wrote:
| it's volatile because it's still in price discovery mode.
|
| also, volatility only matters if you sell it. if you're
| holding as a store of value, then you've done extremely
| well over the long term.
| joshxyz wrote:
| It's volatile because it is exposed to a fuckton of
| markets, but 1btc will always be 1btc.
| perpetualpatzer wrote:
| This could be said of any economic good.
|
| "1 Tulip bulb will always be 1 tulip bulb. It's just that
| people but them with a bunch of different currencies and
| all the other currencies have been really volatile
| relative to tulips (though not relative to one another)."
| lxgr wrote:
| That's not how measuring the "store of value" quality
| works at all.
|
| For example, inflation of a given currency is measured
| using a basket of goods and services, not other
| currencies.
| lallysingh wrote:
| What competes with these stores of value? As a high-risk-
| high-return investment, it makes a lot of sense. I'd count
| it in the same category as artwork as an investment.
| toyg wrote:
| The counter-counter-argument is that it's volatile because
| it's still in its infancy. Gold used to be that volatile
| too, when wars were commonplace and new sources were found
| quite often. It can still swing significantly.
|
| I've come around to the idea. I don't hold any bitcoin
| anymore, and the best chance to get rich is gone, but I can
| see a future where something digital (hence fundamentally
| ethereal) acts as dense and largely unregulated store of
| value, for the people who need it. In the same way the drug
| trade currently uses artworks and commodities when it needs
| to move value across national boundaries, they can use
| hashes or something like that. Transaction costs to convert
| those from/to cash are actually higher and slower than
| bitcoin will likely ever be (i.e. a week or two, and
| several hundrend USDs, will still be acceptable).
|
| We'll never pay taxes or coffees with bitcoin, or hold
| savings accounts, but it will still act as a commodity.
| lawn wrote:
| > The counter-counter-argument is that it's volatile
| because it's still in its infancy.
|
| So you're saying that Bitcoin isn't a store of value, but
| you speculate that it will be in the future.
| toyg wrote:
| One can play True Scotsman all day with certain
| definitions.
| [deleted]
| sharedfrog wrote:
| > the best chance to get rich is gone
|
| The second best time to plant a tree is today.
| ncallaway wrote:
| Yes, but not always true with investments.
|
| Such a strategy is dangerous when you're looking at a
| Ponzi scheme, or a pump and dump, or anything else that
| is designed to leave the late entrants as the bag
| holders.
|
| I'm not saying that's what Bitcoin is, just that it's
| dangerous to be a late entrant to an investment and you
| should be more wary
| Taek wrote:
| Bitcoin makes sense as a store of value because it is
| likely to survive dramatic global economic failure. The
| short term volatility is higher, but it's counter-
| correlated with almost everything else and is a great hedge
| against societal collapse.
|
| Perhaps not the most fun thing to hedge against, but just
| like buying life insurance it's a good idea.
| robjan wrote:
| Bitcoin is not counter-correlated. When the stock market
| corrected last year, bitcoin also crashed.
| neilwilson wrote:
| I'd rather use Whisky as my store of value. With that you can
| still have a party when the power goes off.
| twaybtclong wrote:
| My bitcoin bought my airplanes, wine cellar, and whiskey
| collection. It's comparatively very difficult to hold as
| it's price increases.
| harikb wrote:
| I think both of you agree on this one - once it is too
| expensive to transact, it will be a permanent store of value
| ;p
| lottin wrote:
| Yes, the only question is what amount of value it will
| store. N.B.: Zero is an amount.
| maclured wrote:
| It's going to take some pretty big balls to dump your money
| into bitcoin instead of gold or cash the next time the stock
| market crashes. Then we'll see how good a store of value it
| is.
| nickysielicki wrote:
| Big balls, surely, but are we waiting to see that happen,
| or haven't we seen that happen? The stock market has
| settled around ATHs, not pushing too far down or up.
| Meanwhile, 40% of all US currency _ever minted_ has been
| printed in the last 365 days [1], and Bitcoin is worth
| nearly $50k.
|
| Maybe it's just me, but it's clear to me that markets
| crashed, the shockwave just hasn't been felt by everyone
| yet.
|
| [1]: https://fred.stlouisfed.org/series/M1
| maclured wrote:
| No, I mean a depression. What we've seen is investors
| scrambling to find returns in riskier assets due to low
| interest rates, but the bubble hasn't burst yet.
|
| Once it does, we're likely to see a depression at some
| point [1].
|
| Since Bitcoin is famously volatile I'd bet that once
| there's a scare, people who've pumped the price up to the
| current highs will abandon it in droves. After all,
| there's a huge difference in risk between buying in <$5k
| vs ~$30-50k
|
| [1] https://economicprinciples.org/
| sub7 wrote:
| We know exactly what happens in a rush to liquidity.
| BTC/other non income producing "assets" are the first to
| go.
| iexplainbtc wrote:
| I'd rather invest into something that is highly volatile
| but almost certainly appreciates over time rather than
| something that depreciates at a predictable yet increasing
| rate.
|
| We could discuss the fact that BTC _might_ be overpriced or
| underpriced, nobody really knows. But that it 's going to
| go up in value (in terms of purchasing power) in the long
| term is, black swan events aside, almost a certainty
| because of its engineered stock to flow.
|
| Scarcity is real whether it's physical or digital (as we've
| seen with art, collectibles or more recently NFTs). Gold is
| a good store of value because of historically predictable
| scarcity but it's not predictable _with certainty_. Bitcoin
| is. We 'll know exactly how many bitcoins are in
| circulation 10 minutes, 10 days, 10 or even 100 years from
| now. If anything many will be lost, which will contribute
| to its scarcity.
|
| Will Bitcoin be replaced by something else in the future?
| Almost certainly. But let's not forget that unbacked cash
| has been around for just half a century. Even if Bitcoin is
| replaced by something 50, 100 years from now that's plenty
| of time for a couple of generations to use it as a store of
| value (and payment system).
| Priem19 wrote:
| >Even if Bitcoin is replaced by something 50, 100 years
|
| How about 5 years?
| iexplainbtc wrote:
| Extremely unlikely. Bitcoin has been around 12 years and
| it's just now starting to go mainstream. Most people
| still have no idea what it even is. You can count the
| number of publicly traded companies that have Bitcoin in
| their treasury on 2 hands and that's only destined to
| increase.
|
| I can't give you an actual estimate of how long it will
| take for Bitcoin to lose its market share but I can
| confidently say it will take decades. At very least until
| it replaces a good chunk of gold's market cap.
| Priem19 wrote:
| Seems like an Is/Ought Fallacy. Also, governments won't
| willingly surrender their control of the money supply. I
| think that with one stroke of a pen they could let the
| price /10 as fast as it went x10.
|
| Moreover, since technology is accelerating ever faster,
| five years from now is a lot longer than five years
| starting from 1980.
| notahacker wrote:
| There are many, many things other than Bitcoin which are
| also guaranteed to be finite in supply (more so in the
| case of physical goods, since they cannot be forked).
| BCash, most shitcoins and inactive ICO tokens, for
| example, are limited in supply in exactly the same way.
| Share certificates of bust companies are fixed in supply,
| and yet rarely worth more than the paper they're printed
| on. The creative output of every dead person is fixed in
| supply, and yet some dead people's work appreciates
| massively in value whilst others' is near worthless.
|
| Price is the interaction of supply _and demand_ , and
| there is no particular reason to believe that people will
| be more willing to pay over $45k to update ledgers to
| indicate possession of a particular alphanumeric string
| in a couple of decades' time than they are now.
| iexplainbtc wrote:
| Yep and that's Bitcoin's network effect. There _is_
| demand for Bitcoin. 2017 was the year of retail interest,
| 2021 is the year of institutional interest. It 's easy to
| see that the price is now uncorrelated with the retail
| interest, using Google Trends as an example. [0]
|
| > there is no particular reason to believe that people
| will be more willing to pay over $45k to update ledgers
| to indicate possession of a particular alphanumeric
| string in a couple of decades' time than they are now
|
| Absolutely. Nobody can know with certainty what will
| happen but if you compare Bitcoin with something like
| gold you immediately realize that Bitcoin is better in
| any possible way. There is literally no reason to think
| that Bitcoin won't replace gold in terms of market
| capitalization (except for the 7.5% actually used in
| manufacturing) [1].
|
| [0] https://trends.google.com/trends/explore?date=today%2
| 05-y&ge...
|
| [1] https://www.statista.com/statistics/299609/gold-
| demand-by-in...
| notahacker wrote:
| > Nobody can know with certainty what will happen but if
| you compare Bitcoin with something like gold you
| immediately realize that Bitcoin is better in any
| possible way.
|
| Again, this is cargo-cult nonsense. Gold does not take
| the electricity resources of a large country to render it
| secure and make transactions possible. People cannot vote
| for a greater gold supply or fork gold, or create an
| alternative gold which lacks the need to use the
| electricity resources of a small country to secure it but
| is in every other respect functionally identical. Gold is
| pretty to look at and can be made into jewellery, not
| intrinsically worthless. Gold's price might be pushed
| higher than that intrinsic value by interest in its use
| as a store of value, but it's driven by millenia of
| desire to possess gold as a status symbol and currency
| substitute across a vast array of cultures, not a 12 year
| bull run propped up by counterfeit dollars and
| increasingly unrealistic claims that it will replace
| currency. There is literally no reason to believe that
| Bitcoin will ever 'replace gold in terms of market
| capitalization'
| iexplainbtc wrote:
| > Gold does not take the electricity resources of a large
| country to render it secure and make transactions
| possible.
|
| Except it does [0].
|
| > Gold is pretty to look at and can be made into
| jewellery, not intrinsically worthless.
|
| The first argument is laughable, the second is simply
| incorrect. Oil is intrinsically worthless. It's worth
| something only if you can turn it into fuel, plastic or
| some other product for which there is demand. Same goes
| for gold.
|
| And although it's true that you can turn a piece of gold
| into a piece of jewelry that piece of jewelry will
| _decrease_ in value over time unless it gains intangible
| value because of its history. Try buying a gold necklace
| and selling it the next day at the same value.
|
| _Nothing_ has "intrinsic" value. All value is relative.
|
| [0] https://medium.com/@hillpot/bitcoin-vs-gold-which-
| hurts-the-....
| notahacker wrote:
| > Except it does [0].
|
| That energy is used in production, not securing the
| existing stock of gold. With the very significant
| consequence for gold's "store of value" role that if
| environmental activists succeed in curtailing gold
| mining, gold owners would see their gold go up in value,
| not transactions becoming incredibly difficult and prone
| to fraud and a price crash. (But FWIW I'm not saying that
| gold mining to use as a "store of value" isn't _also_
| wasteful)
|
| > It's worth something only if you can turn it into fuel,
| plastic or some other product for which there is demand.
| Same goes for gold.
|
| I'm sorry to hear you find the aesthetic preferences of
| virtually every culture in history and the role they have
| played in promoting gold as a symbol of wealth laughable.
| You'd be surprised how much harder it is to enthuse them
| about the aesthetic properties of Bitcoins though.
|
| And no, oil or gold is not "intrinsically worthless"
| because it is possible to use oil or gold for purposes
| other than exchange, and thus people value them for those
| use cases independently of beliefs about their future
| price.
|
| > And although it's true that you can turn a piece of
| gold into a piece of jewelry that piece of jewelry will
| decrease in value over time unless it gains intangible
| value because of its history. Try buying a gold necklace
| and selling it the next day at the same value.
|
| And yet gold necklaces of a given design are invariably
| more scarce in supply than Bitcoin! Almost like the
| demand side of the equation actually matters! Luckily,
| people do not buy gold necklaces solely because they
| believe gold necklaces will go up in price, and are not
| motivated to sell them as soon as they fear the price
| will fall in future. The same does not apply to Bitcoins,
| because unlike Bitcoins, people hold necklaces for the
| intrinsic pleasure of having a shiny necklace.
| iexplainbtc wrote:
| > That energy is used in production, not securing the
| existing stock of gold.
|
| Safes and transportation equipment have to be built too.
| And we already have layer 2 infrastructure that minimizes
| the amount of energy spent to secure transactions on
| chain. It needs a lot of work, sure, but it's not
| unfeasible for Bitcoin to use a fraction of the energy
| used today, at some point.
|
| Furthermore mining gold requires mining equipment to use
| whatever source of energy is nearby or ship expensive
| tanks of fuel and/or batteries. With Bitcoin you could
| set up a mining rig where there's a source of energy that
| would otherwise be left unused. Meaning we could be using
| a lot of renewable resources that would otherwise be
| wasted to create and exchange value.
|
| > I'm sorry to hear you find the aesthetic preferences of
| virtually every culture in history and the role they have
| played in promoting gold as a symbol of wealth laughable.
|
| I don't and you took what I said out of context. Of
| course aesthetic properties are important. But quartz is
| arguably "prettier" than gold in most cultures. Gold is
| scarcer. That's why _only_ considering the aesthetics is
| laughable.
|
| > And yet gold necklaces of a given design are invariably
| more scarce in supply than Bitcoin!
|
| Gold necklaces of a certain _brand_. Not any custom
| designed necklace. It 's an important distinction. A
| brand is a very real and important source of intangible
| value. And a brand can be related to a company's IP or to
| other less predictable events (think Banksy).
|
| > because unlike Bitcoins, people hold necklaces for the
| intrinsic pleasure of having a shiny necklace.
|
| You seem to be unaware of how many people hold Bitcoin
| just because they like doing so (think GME and WSB). A
| strong niche of Bitcoin holders has ties with
| libertarianism and, therefore, attributes a non-zero
| intangible value to it in terms of it being an instrument
| against totalitarianism and governments in general.
| notahacker wrote:
| > Safes and transportation equipment have to be built
| too.
|
| Because gold will be worthless and useless if it is not
| possible to continue using as much energy as Argentina on
| a daily basis to build and maintain safes and Securicor
| vans?
|
| > Meaning we could be using a lot of renewable resources
| that would otherwise be wasted to create and exchange
| value.
|
| Because the world is famously short of use cases and
| storage media for electrical power? As I already pointed
| out, none of the energy used to mine new gold is
| essential (or even remotely helpful) to securing and
| transacting with the existing gold supply, gold mining
| being energy use is something of a moot point when
| considering possible advantages of holding gold instead.
|
| > I don't and you took what I said out of context Of
| course aesthetic properties are important. But quartz is
| arguably "prettier" than gold in most cultures. Gold is
| scarcer. That's why only considering the aesthetics is
| laughable.
|
| At no point have I even hinted at considering _only_ the
| aesthetics, and no good faith reading of my arguments
| would conclude I did. I did, after all, include the
| clause "price is the interaction of supply and demand"
| in my opening post.
|
| I noted that aesthetics were _a_ factor creating demand
| for gold independently from its perceived resale value.
| You summarily dismissed this as "laughable". There was
| nothing substantive for me to "take out of context", but
| I'm glad you now agree that the intrinsic aesthetic
| properties of gold are important.
|
| > Gold necklaces of a certain brand. Not any custom
| designed necklace. It's an important distinction
|
| Yes. I am aware that brands exist. Sometimes brands even
| produce limited editions so "we'll know exactly how many
| [necklaces] are in circulation 10 minutes, 10 days, 10 or
| even 100 years from now", but even this doesn't guarantee
| their gold necklaces retain their value. The fact that
| scarcity of particular designs often does not make them
| more useful as a store of value than the less scarce raw
| material supports my argument not yours. Second hand
| necklace preferences are fickle, and financial instrument
| preferences even more so.
|
| > You seem to be unaware of how many people hold Bitcoin
| just because they like doing so (think GME and WSB)
|
| How's GME performed as a store of value since WSB pumped?
| It's just as scarce as it was 10 days ago, but apparently
| not guaranteed to go up after all...
|
| And come to think of it, the "terms of it being an
| instrument against totalitarianism and governments in
| general" are not independent from BTCs potential for
| future exchange use. Certainly neither as independent
| from future use nor as widespread as people taking
| pleasure from things' intrinsic shininess.
| maclured wrote:
| > Oil is ... worth something only if you can turn it into
| fuel, plastic or some other product for which there is
| demand. Same goes for gold.
|
| You clearly don't understand what "intrinsic value" means
| if you believe this. The very fact it can be fabricated
| into something of value gives it some intrinsic value.
| dang wrote:
| Please omit personal swipes from your comments, and
| please don't post in the flamewar style.
|
| https://news.ycombinator.com/newsguidelines.html
| iexplainbtc wrote:
| > The very fact it can be _fabricated_ into something _of
| value_ gives it some _intrinsic_ value.
|
| That's a plain contradiction. Oil is valuable because
| there is _demand_ for products manufactured with it. In a
| world where there 's no demand for gasoline, plastic or
| any other derivative of oil the "intrinsic value" of oil
| is zero, which proves there is no such thing as intrinsic
| value that isn't relative to a market.
|
| Just to be clear we're discussing commodities and _not_
| company stocks, for which there is a very specific
| definition of "intrinsic value", according to
| fundamental analysis at least.
|
| I'm pretty sure you're the one who's confused, but ok.
| dang wrote:
| Please omit personal swipes from your comments, and
| please don't post in the flamewar style.
|
| https://news.ycombinator.com/newsguidelines.html
| maclured wrote:
| The question is, will people run to it as a safe haven in
| the event of a huge stock market crash, or away from it?
| Nobody knows for sure. It's a game of chicken - not
| having the heritage of gold, I don't think it'd take much
| for people to get scared and realise that all they have
| are a load of strings of characters (scarce or not) and
| want to dump it. After all, it's crashed before.
|
| Until then, it's potentially a great investment in
| today's climate (especially if you don't care about the
| climate).
| iexplainbtc wrote:
| > all they have are a load of strings of characters
|
| Most things valuable nowadays are strings of characters.
| It's not the byte sequence that's valuable, it's what it
| represents. Bitcoin is, conceptually speaking, an asset
| that is orders of magnitude better than most existing
| financial instruments and commodities. The fact that it's
| implemented using bits instead of atoms is completely
| irrelevant.
|
| I really don't understand this urge of breaking down
| anything digital into its fundamental units to try and
| diminish its value. It's the equivalent of evaluating
| anything in the physical world as "just a bunch of
| atoms".
| maclured wrote:
| > I really don't understand this urge of breaking down
| anything digital into its fundamental units to try and
| diminish its value. It's the equivalent of evaluating
| anything in the physical world as "just a bunch of
| atoms".
|
| Because in the good times, people think these things are
| great investments. But as soon as things go south they
| look at what they have from a different perspective.
| Something with some intrinsic value (e.g. a "bunch of
| atoms" that can be eaten or lived in) is likely to be
| much easier to rationalise holding on to in that
| scenario, rather than something that's only worth
| something due to consensus by a bunch of strangers.
|
| And that's the risk - it doesn't matter if as an
| individual you see great potential. If everyone else
| disagrees, gets scared and sells, then BTC could be
| battered.
| iexplainbtc wrote:
| Most subjectively "useless" objects are used as a store
| of value. Only 7/8% of gold is used in the manufacturing
| industry, the rest is sitting there with no active
| purpose other than existing. Same goes for collectibles
| (you can't eat or live in a baseball card or a valuable
| artwork).
|
| Also the "live in" is a big misconception. Real estate
| doesn't increase in value. What does is the land on top
| of which it sits. A house depreciates over time exactly
| like a car (prefabs on rented land are a great example of
| that).
|
| The only question that matters is: is Bitcoin better than
| commodity X? Where X can be gold, silver, oil or whatever
| else. And if the answer is yes there's no reason to
| believe it wouldn't take over X in terms of market
| capitalization (and, therefore, value).
| maclured wrote:
| > The only question that matters is: is Bitcoin better
| than commodity X
|
| No. The only question that matters is will people
| collectively continue to agree that it's worth something,
| lacking any intrinsic value?
|
| If interest rates go up and people need to call in their
| assets to repay their debts, what do you think will
| happen? Would people rather lose their houses or their
| bitcoins?
|
| I think people will dump stocks and risky "assets" like
| BTC and take flight into cash with some percentage in
| traditional safe havens with a proven track record (like
| gold) until things settle down. This is exactly what
| happened a year ago. There's no reason in my mind to
| believe anything would change regarding BTC's status now
| - I think it'll be dumped like it was last year. It may
| recover faster (I'd certainly buy it for a heavy
| discount), but I just don't buy the "store of value",
| "digital gold" argument.
|
| It's an early-stage speculative asset IMO - let's not
| pretend it's a stable, low-risk store of value.
|
| > A house depreciates over time
|
| Tell that to people unable to buy because house prices
| have shot up. Property can also generate a good rental
| income - yield obviously dependent on the price paid. BTC
| doesn't provide any such perpetuity.
| iexplainbtc wrote:
| You fail to understand 3 things:
|
| 1. There is no such thing as "intrinsic value" and I
| explained clearly why in a different reply to your
| comment.
|
| 2. What goes up is the value of _land_ , not _houses_. If
| houses themselves were valuable movable homes would also
| increase in value. They don 't. The reason why land goes
| up in value is that (residential) land is scarce.
|
| 3. Gold isn't a safe haven because of its track record
| (in fact gold is relatively volatile [0] and if you had
| bought gold in 1980 you'd have _lost_ money today,
| adjusted to inflation), it 's considered a safe haven
| because it's the only commodity that has a historically
| predictable stock to flow and can (and normally does) act
| as a hedge against inflation. Bitcoin does that and more.
|
| > It's an early-stage speculative asset IMO
|
| So was gold in its early stages as a store of value. So
| is any valuable company's stock in the first few months
| after IPO. Speculation is uncorrelated with the lack of
| fundamental valuable _features_.
|
| At this point I'm not sure your intent is to try to
| understand more about Bitcoin (or economy, for that
| matter) but rather to force a narrative that isn't at all
| obvious, unlike what you're trying to imply. And I'm not
| saying you're wrong, rather that you're unable to
| corroborate your statements with data and facts.
|
| "And for that reason, I'm out".
|
| [0] https://www.macrotrends.net/1333/historical-gold-
| prices-100-...
| dang wrote:
| Please don't post in the flamewar style to HN. You've
| crossed noticeably into that here and it's not cool--
| we're trying to avoid that kind of thing on this site.
|
| If you wouldn't mind reviewing
| https://news.ycombinator.com/newsguidelines.html and
| sticking to the rules when posting here, we'd be
| grateful.
| auggierose wrote:
| But it doesn't have any value. Except that some people think
| it has. In times of truly global trouble, nobody will accept
| bitcoins as payment for bread.
| rorykoehler wrote:
| The same could be said it FIAT currencies. It's all an
| illusion/religion.
| notahacker wrote:
| One is an illusion based around a legal system of
| enforceable debt, and the other is an illusion based on
| current speculator psychology.
|
| One of those illusions is more powerful and sustainable
| than the other
| UncleMeat wrote:
| Fiat currencies (of democratic nations) are
| democratically controlled. That makes them fundamentally
| different from cryptocurrencies controlled by early
| adopters, a few engineers, and mining rigs.
| freddieoduks wrote:
| serious question, how is the democratic process different
| between the two? One i.e. democratic nations are a group
| of people on the same piece of land that. The other is a
| group of people on the internet.
| UncleMeat wrote:
| A few years ago the BTC/BCH split happened. This was a
| major philosophical decision that creates winners and
| losers and changes the trajectory of the winning coin
| forever. It was a fiscal policy decision.
|
| It was made _exclusively_ by software engineers and
| miners. Miners get to vote based on their wealth. I don
| 't consider that to be "a democratic process". There is
| no guarantee of enfranchisement. Some people get far far
| far more votes than others. It is more like a council of
| aristocrats.
| ForHackernews wrote:
| Absolutely. It's just funny that many cryptocurrency
| advocates reject "fiat" currencies for being fake and
| arbitrary, but bitcoin is even more fake and arbitrary.
| At least USD has the non-illusionary property of keeping
| me out of jail when paid to the IRS. ;)
|
| Why is BTC worth more than BCH?
| auggierose wrote:
| it is, but bitcoin is a particularly stupid one
| yokaze wrote:
| No, FIAT currencies derive a value by the government
| putting one to it. The government spends it and accepts
| payment with it.
|
| Government spending in the US is 35% of the whole GDP.
|
| Try to argue with your tax office, that it is an
| illusion/religion.
| anthonypasq wrote:
| no, this is literally macro economics 101 dude.
| Governments don't give money value. People's belief it
| has value is what gives money value.
| freddieoduks wrote:
| the only reason the dollar has any value at all is that
| it is issued within the context of a society full of
| people who have agreed to treat it as though it has
| value. Without that faith, every major currency on Earth
| would be as useful as small pieces of paper generally are
| root_axis wrote:
| Indeed, it doesn't even need to be global trouble, e.g. if
| you were a bitcoin enthusiast living in Puerto Rico during
| 2017, you learned first-hand exactly how useless bitcoin
| becomes when a major disaster strikes. Cash and gold didn't
| suffer the same fate.
| miracle2k wrote:
| Presumably it wasn't used for everyday payments before,
| and obviously the global price was unaffected, so when
| you say it become useless, in what way do you mean?
| root_axis wrote:
| I mean that the island was without power for months so
| anybody that was expecting to rely on bitcoin in any
| capacity during the disaster was totally screwed.
| samfisher83 wrote:
| That is true of a lot of things. Would diamonds or gold be
| as valuable if people didn't think it was a store of value?
| auggierose wrote:
| You can use diamonds to cut things. As for store of
| value, nobody sees it as a store of value. If you think
| it has value, go and buy a large diamond from a jewellery
| store, and then try to sell it somewhere for the same
| price.
| RC_ITR wrote:
| Diamonds are mostly consumption. Used diamonds always
| sell for WAY less than new, unless there's some other
| factor.
| ragnese wrote:
| Right. It's all mass psychology. Gold, the stock market,
| bitcoin, whatever.
|
| It only has value as long as people believe it has value.
|
| The caveat of course is that all of the things I listed
| have SOME more inherent value, but that is NOT the major
| contributor to their actual trading prices. Gold is not
| THAT useful. Neither is owning a billionth of a company.
| Grustaf wrote:
| Obviously this is much less true for gold than for
| bitcoin, and the value of the stock market is very real.
| If you own a piece of Apple or the local hot dog stand,
| you own a piece of something that is continuously
| producing value for people.
| Strom wrote:
| > _you own a piece of something that is continuously
| producing value for people._
|
| People will only pay for the next Apple product as long
| as they believe it provides value to them. It's all the
| same. Perception is king.
| Grustaf wrote:
| Over a billion people use Apple products, it's an
| extremely solid business. You can't compare that to a
| speculative bubble. Tulips were also very expensive once.
| machinebun wrote:
| True, but when you own a part of Apple you also have to
| have faith that your shares won't be diluted to nothing
| via new stock offerings (which numerous companies have
| done in the past). So while there is intrinsic value in
| the shares, some of that is still based on faith (if
| Apple doubled their outstanding shares overnight, the
| value of yours would go down).
| sz4kerto wrote:
| > In times of truly global trouble, nobody will accept
| bitcoins as payment for bread.
|
| That is true for gold as well. (Ofc not 'nobody', just
| 'almost nobody'.)
| XorNot wrote:
| This is why there is no gold standard anymore. Like, this
| right here is the exact reason: because collectively it's
| apparent gold is not worth much to anyone in a pinch. So
| why bother trading with it as a proxy for your nation-
| state's goods and services output?
|
| Interestingly, I went and looked up what the price of
| gold would actually be if it was solely used for
| industrial processes, and it's hard to actually figure
| out: it's speculated on a lot, but world gold demand in
| 2019 was 4355.7t. Of that, 48.5% was for the jewelery
| industry, and 7.48% for technology - the rest accounted
| for by investment. So industrially world demand for gold
| for productive or decorative uses is about 2439.2 tons
| (as of 2019), whereas mining production in that year was
| about 3,300 tons.
|
| So about 45% of world gold demand is essentially from
| financial speculators. To figure out pricing you'd have
| to really get into the current mining economics for
| technological use...
|
| https://www.statista.com/statistics/299609/gold-demand-
| by-in...
| https://www.statista.com/statistics/264628/world-mine-
| produc... https://www.gold.org/about-gold/gold-supply
| auggierose wrote:
| Gold makes a nice filling for your teeth, if you like
| that look.
| [deleted]
| fogihujy wrote:
| It also has industrial applications, not to mention that
| it's being used for jewellery.
|
| A golden chain with a gold-plated USB key containing a
| Bitcoin wallet might have a considerable bling factor
| though. :)
| ForHackernews wrote:
| Is this really true historically? Obviously these are
| biased goldbugs, but there are at least some anecdotes
| that suggest https://www.bullionstar.com/blogs/ronan-
| manly/the-power-of-g...
|
| It seems more likely that people conflict zones would be
| happy to accept gold (with the assumption it will be
| valuable in the future/in more stable areas) than
| bitcoins that require electricity, stable internet and
| tons of disk space.
| XorNot wrote:
| Conflict zones are generally aware that there are non-
| conflict zones. The existence of the first world, and
| detailed knowledge of it's demands, means people know to
| collect assets that will be valued there.
|
| The problem with Bitcoin is it's not a physical thing at
| the end of the day: nobody mints jewellery out of
| bitcoin.
| burade wrote:
| Gold is a real thing that has value though. Bitcoin
| literally stops existing if you stop believing in it.
| throwaway3699 wrote:
| So does fiat.
| lottin wrote:
| Bitcoin is fiat. It's not backed by a commodity.
| iagovar wrote:
| But fiat has taxes, and state-backed violence and jails.
|
| If your state demands your taxes be paid in FIAT, no
| matter what you wan't, you'll be paying in FIAT (or
| fined, or in jail, or depending on the circunstances
| maybe dead).
| tarsinge wrote:
| > Bitcoin literally stops existing if you stop believing
| in it.
|
| That is the case for countless things. Is a corporation a
| real thing or a belief? Where is the physical entity
| Facebook or the physical entity Apple? Is it the people
| working for them? Their logo? Their contracts? It's all
| that and a collective belief in an abstract entity.
| That's true for fiat or states too, even if that belief
| can be enforced through e.g. army, that doesn't change
| the fact that's is a collective belief in something that
| has no material reality.
| ChuckNorris89 wrote:
| _> That is true for gold as well._
|
| Not even close. Gold is a tangible psychical asset, a
| finite resource on Earth that can not only make valuables
| you can wear or leave as heirloom but is also a really
| good heat-reflector and electricity conductor needed in
| anything from semiconductors and precision electronics to
| supercars and satellites. Without it, the global
| electronics industry would suffer terribly.
| _alex_ wrote:
| Gold's market cap isn't driven by industrial use.
| epx wrote:
| +1, _lots_ of things have been manufactured with gold in
| the past and would go back to gold if it got any cheaper.
| snarfy wrote:
| The irony is we place a lot of value on energy. The current
| economic system reflects this with oil being a proxy for
| energy.
| tal8d wrote:
| I haven't received my official enthusiast talking points
| memo, but the obvious solution was proposed years ago: off
| chain transaction that use smart contracts for settlement on
| the public ledger. I vaguely remember "store of value" being
| used for what would more accurately be described as "trust
| anchor" or "root authority".
| MichaelApproved wrote:
| As you've said, it's been years since that was proposed but
| it's still not helping because none of the off chain
| networks have gotten any traction.
|
| Admittedly, my experience with BTC is limited so please
| enlighten me if I have this wrong. That's not a sarcastic
| request. I'm being genuine.
| bob33212 wrote:
| Off Chain transactions look so much like a credit card
| that as soon as you begin to build the off chain
| transaction system you see that Amex/Visa/MC could just
| allow customers to settle payment in BTC and get the same
| value.
| tal8d wrote:
| I'm trying to imagine how you think that'd work without
| them also running an exchange and eating slippage, or
| maintaining a massive hot wallet.
| bob33212 wrote:
| You could make it a debit card and require people to
| deposit BTC. But in general the USD is a better
| settlement currency. That is why BTC isn't being used in
| transactions.
|
| BTC is a pump and dump play.
| tal8d wrote:
| lol, so nothing even close to an off chain network - but
| somehow the "same value". Well, except for the real time
| cryptographically secure stuff - but nobody wanted those
| values anyway.
|
| 10+ years is a pretty long con, that satoshi is one
| patient fraudster.
| bob33212 wrote:
| satoshi obviously isn't part of the con. He would have
| sold a long time ago if that was the case.
|
| It is the people who have latched on as "bitcoin
| evangelists" and are recruiting more people into the
| network to get the price to go up. Classic Ponzi scheme.
| tal8d wrote:
| So not a "Classic Ponzi scheme", but the opposite - where
| Charles Ponzi is the victim of "people who have latched
| on". That is twice now that you've claimed something
| based on a bizarre redefinition. Even if there were some
| kind of campaign of revolving pyramid schemes over all
| these YEARS, bitcoin is net positive... while pyramid
| schemes operate at a deficit all the way up to the point
| where they go to zero.
| bob33212 wrote:
| I think you are right, this doesn't perfectly fit with
| existing definitions of other scams. This is more like
| the beanie baby situation combined with some libertarian
| political beliefs.
| tal8d wrote:
| But the beanie baby craze only lasted 3 years. The CBOE
| didn't start trading beanie baby options. NIST didn't
| begin several beanie baby focused work groups and
| studies. The IRS didn't provide tax guidance on beanie
| babies... You guys really need to update that script, but
| I do congratulate you on dropping the tulip mania talking
| point - given the fact that there is no evidence it ever
| happened in the first place.
| bob33212 wrote:
| I never suggested this was tulip mania. Nice strawman
| there.
| tal8d wrote:
| ...that is why you were congratulated. Nice reading
| comprehension there. I've had this exact conversation at
| least a dozen times over the years, it is formulaic.
| There is always a claim of some kind of nonsensical
| fraud, after that unravels then it turns to speculation
| about mass delusion, and it usually ends with political
| appeal/slander and "we live in a society!" Every year
| there are positive developments and evidence of wider
| interest, but the opposition's script has remained
| unchanged. I got into it with a tech reporter a while ago
| who was obviously very emotionally invested in bitcoin
| being a fad/scam/bubble, after searching archives of his
| timeline I understood why: he had been predicting
| bitcoin's demise, very confidently and regularly, since
| back when it was trading at $130. Every year it gets
| funnier.
| bob33212 wrote:
| I never said there wasn't wider interest. I said the
| opposite, I said that the enthusiasts are activity
| looking to expand the number of people investing.
|
| If you want to talk about previous conversations around
| this, the ones I have had always end in people believing
| that decentralization or cryptography are magical words
| that solve all kinds of problems without creating new
| ones. I have never invested in currency so the price
| doesn't matter to me. I assume it will go up proportional
| to the number of people that can be convinced to invest.
| tal8d wrote:
| > > BTC is a pump and dump play.
|
| > > ..."bitcoin evangelists" and are recruiting more
| people into the network to get the price to go up.
| Classic Ponzi scheme.
|
| > > ...this doesn't perfectly fit with existing
| definitions of other scams.
|
| > I said that the enthusiasts are activity looking to
| expand the number of people investing.
|
| I wonder. Are you aware of how far your characterization
| of the situation has shifted within the same thread?
|
| evangelist -> enthusiast
|
| recruiting -> expanding
|
| Ponzi scheme/scam -> investment
|
| Have you changed your position, or simply softened your
| language as a result of finding your position
| indefensible? If the former, congrats; if the latter,
| maybe think on that a little more.
|
| > ...always end in people believing that decentralization
| or cryptography are magical words...
|
| Well, you claimed earlier that off chain transactions
| were functionally equivalent, from the perspective of the
| money transfer service, to credit cards. When challenged,
| you adjusted that to debit cards - which is also not even
| close to being true. Even if you were talking about it
| from the perspective of the end user, or merchant, you'd
| still be very wrong. So you clearly don't know much about
| the stuff you've expressed strong opinions on, and that
| means your estimates of others' opinions on the same
| carry no weight.
|
| > ...the price doesn't matter to me.
|
| You might want that to be true, but it rarely works out
| that way. Opportunity cost can do funny things to people,
| like compel them to construct elaborate coping mechanisms
| in defense of their ego. Sometimes that looks like a
| confidently stated, but ill-informed, opinion that
| crumbles in the face of any pushback. Like I said, I've
| been here a long time and I've seen it all. There is one
| guy I worked with years ago who asked me about bitcoin
| but took no action. I only pay attention to the price
| toward the end of the year, when working on taxes. But
| without fail if I get a call from him then I know that
| bitcoin has just had a major selloff. The funny thing is
| that he is totally unaware of the behavior, it isn't as
| if he aggressively gloats - but he always brings up
| bitcoin, and then I don't hear from him again until the
| next selloff.
| tal8d wrote:
| I don't follow the day to day, and it has been years
| since I contributed any code, but a quick peek at the
| lightning network stats makes me think that everything is
| fine. Good organic growth, with over 1000 BTC presently
| in flight. A lot of people seemed to be under the
| impression that the off chain networks would take center
| stage, and the blockchain would quietly power it from
| behind the scenes - but I'm pretty sure the direct
| opposite will occur. As far as why there hasn't been an
| explosion in network activity: I guess there isn't enough
| pressure. Every so often there is a spike that gets
| people up in arms, then it quiets down and they forget.
| Larger wallets will eventually start moving transactions
| off chain, but they've obviously got as much enthusiasm
| about it as they did in updating their backends to take
| advantage of space saving changes in the protocol. But
| once its done, its done.
|
| https://bitcoinvisuals.com/ln-capacity
| mj4m1n wrote:
| For many BTC enthusiasts the store of value narrative has
| been in place for a very long time.
|
| "I see Bitcoin as ultimately becoming a reserve currency for
| banks, playing much the same role as gold did in the early
| days of banking. Banks could issue digital cash with greater
| anonymity and lighter weight, more efficient transactions." -
| Hal Finney (2010)
| Igelau wrote:
| > Banks could issue digital cash _with greater anonymity_
|
| Why would (a) my bank want to do this, and (b) why would I
| want my bank to do this?
| mj4m1n wrote:
| The point here is that bitcoin is incredibly transparent,
| which on one level one may welcome, but on another
| certainly not.
|
| (a) providing cash level privacy to customers, which (b)
| they should probably value more than they do.
| inter_netuser wrote:
| just post all your financial statements on the web for
| everyone to see.
|
| you've got nothing to hide, right?
| Grustaf wrote:
| Now I'm confused. Bitcoin is not lighter weight than
| existing digital cash. It's not really lighter weight than
| anything. Well, possibly the large hadron collider consumes
| more, I don't know.
| jcbrand wrote:
| There is no such thing as digital cash outside of
| cryptocurrencies.
|
| The money in your bank account is a liability of the
| bank, it's not cash.
| Grustaf wrote:
| You can go through life without ever using physical cash.
| You get paid digitally, you buy groceries digitally. You
| even borrow money for a house digitally.
|
| The thing you transact with is digital, liquid and
| fungible. In what sense is it not cash?
| mj4m1n wrote:
| All those transactions are reversible at any point with a
| flip of a bit (or two).
|
| If you receive physical cash, it's in your control.
|
| Now if only that cash could not be inflated as much as it
| can.
| Grustaf wrote:
| I don't think any common definition of cash includes the
| idea that payments are "irreversible". I don't even see
| why this is so important. If someone pays me physical
| cash by mistake they have legal recourse to get it back.
| It's not finder's keepers.
| onion2k wrote:
| _It won 't_
|
| It won't _for small transactions_. Buying a car or a house
| with BTC could still be viable in the future.
| gambiting wrote:
| I still don't see how. When we bought our house in the UK I
| sent the entire transfer from my phone, paid 0 fee, and it
| arrived 30 seconds later. Why would I use bitcoin for it?
| lkbm wrote:
| Meanwhile, if I want to donate over $25,000 to charity in
| the US, I have to go into the bank (in person even during
| the pandemic) spend half an hour while they fill out
| forms, pay a $12 fee (still negligible, granted), and
| they'll process it within 12 hours.
|
| Bitcoin might not be as good as the UK, but you have to
| understand that the consumer US financial system remains
| stuck in the 1980s.
| jefftk wrote:
| _> if I want to donate over $25,000 to charity in the US,
| I have to go into the bank (in person even during the
| pandemic) spend half an hour while they fill out forms,
| pay a $12 fee (still negligible, granted), and they 'll
| process it within 12 hours._
|
| You can do it from home for a negligible fee ($0-$3) if
| you're ok with ACH instead.
|
| (Same-day ACH has a max of $100k, though it used to be
| $25k. Next-day ACH is something like $100M, though your
| bank likely has a lower limit.)
| leesalminen wrote:
| I'm currently buying a house internationally.
| International wire transfers take multiple days and I
| have to produce all sorts of documents for the receiving
| country's government showing the source of the money.
| It's an annoying and lengthy process. I'd much rather
| send BTC to a wallet than this.
| gambiting wrote:
| No they don't? I frequently send large(about PS50k/month)
| amounts of money between one EU country and UK, we always
| pay extra(50 euro) to have the transfer done as an
| express transfer and the money arrives within 60 minutes
| in the UK bank. Or if you don't mind doing a SEPA
| transfer then it's 15 minutes. And no, I was never asked
| to prove any source of anything, it's an invoice payment,
| it goes straight through.
|
| Maybe by "international" you mean something else, but at
| least in the EU(and EEA and UK) transfers can be
| incredibly quick.
| sneak wrote:
| 14x more people live outside of SEPA than live within it.
| gambiting wrote:
| And it's the biggest(by operating revenue) market in the
| world, what's your point?
| sneak wrote:
| Apologies, I thought I was being clear. A payment system
| that lets people transfer unlimited amounts of value to
| 14x more people than SEPA (presuming internet access),
| without censorship, irreversibly, and effectively for
| free, has, it seems to me, substantial value.
|
| Even if it's less useful than, say, access to SEPA, it'd
| have to be 14x less valuable to break even (again,
| presuming internet access available to everyone, which
| isn't a thing yet).
| Hamuko wrote:
| Does the SEPA network use >1.0 Argentina worth of
| electricity to operate?
| JackFr wrote:
| > irreversibly
|
| People think that's a feature until they don't.
| JackFr wrote:
| Ummm, I've seen a lot of movies and international wire
| transfers are not like that at all. Basically one click
| and they're instantaneous.
|
| Well, almost -- they do always feature cool progress bars
| as the money is transferred.
| corford wrote:
| >International wire transfers take multiple days
|
| Not in the EU they don't. A SEPA transfer takes max 1
| business day and is usually free. More info:
| https://www.gbm.hsbc.com/solutions/global-liquidity-and-
| cash...
| picks_at_nits wrote:
| If you are buying and selling real estate in a
| functioning jurisdiction, hiding your identity by making
| the payment opaque is not going to do much for you.
|
| There are title deeds and tax rolls. In many
| jurisdictions you have obligations like building codes
| that need to be inspected and an owner needs to be held
| to account. If you need privacy, you have to set up shell
| companies to act as the legal owner, not hide the payment
| from your bank or government.
|
| Speaking of showing the source of the money, if you
| bought my house from me with bitcoin, I would have to
| speak to a lawyer about not running afoul of money-
| laundering regulations. And no, I won't take the
| internet's word for it that somehow, those laws only
| pertain to fiat currency.
|
| Something tells me that the cost of fighting my
| government in court would far exceed the value of my home
| regardless of whether I was technically in the right not
| to fill out all those same forms.
| Hamuko wrote:
| Are you saying that if you were buying a house with
| Bitcoin that the government wouldn't want to see where
| the money is sourced from?
| nannal wrote:
| It would be easier, this TX came from my work's hotwallet
| & this one was part of my inheritance, you can see these
| TXs where that address sent to the tax authority assuring
| all tax has been paid as opposed to being passed around a
| call centre to talk to "Bob" so the bank can provide
| those details.
| gambiting wrote:
| So......exactly the same way it works with a bank
| nowadays? When I did it it was just a printed statement
| from my bank(that I printed myself), showing money
| arriving from X account, Y amount paid for tax, document
| from solicitor confirming inheritence, 3 copies of my
| payslip, done. How exactly is that easier with bitcoin?
| alisonkisk wrote:
| Bitcoin is useful for evading the law, but of course
| there had a host of other issues and risks.
| Twisell wrote:
| Like finding out that the house is actually not yours
| after landing in a foreign country and having spend you
| life saving on a BTC transaction.
|
| Big issues, big risks, but maybe you have big balls
| too... I personally don't feel so self assured about
| myself.
| [deleted]
| jcranmer wrote:
| The main reason for a lot of that documentation is know
| your customer/anti-money-laundering laws. Even if you
| were sending BTC, you would still have to provide that
| documentation to not break the law.
| gsich wrote:
| Maybe you don't want your bank to know.
| rvx80 wrote:
| You can't just buy a house with a suitcase full of cash
| these days, it's not possible. The gov will be asking
| where that money came from, to prevent money laundering
| and to ensure it's not proceeds of crime. Whether not you
| agree with that, this is the situation.
|
| The idea that somehow they'll let you buy something with
| Bitcoin without requiring the same level of disclosure is
| a complete fantasy.
| gambiting wrote:
| While I think technically there isn't anything stopping
| you from buying a house with hard cash in the UK, I very
| much doubt that either side's solicitor would agree to it
| without extensive documentation as to where how and when
| you got that cash.
| rvx80 wrote:
| Yes, for clarity I meant to say "you can't just buy a
| house with a suitcase full of cash and no explanation of
| where it came from".
|
| I'm sure it's possible, although almost certainly very
| much not really liked by your solicitor!
| riffraff wrote:
| > You can't just buy a house with a suitcase full of cash
| these days, it's not possible
|
| I must point out I know a couple people who did that in
| Hungary in the last ten years, just because it seemed
| absolutely insane to me (cheques don't exist here,
| either..).
|
| I am reasonably sure this isn't that common though, and
| the government still tracks the transaction :)
| XorNot wrote:
| I mean the only reason you own a house is because the
| government tracks the transaction.
| Hamuko wrote:
| For what reason?
| gsich wrote:
| Any reason.
| Hamuko wrote:
| Like what? For what reason would one not want their bank
| to know that they have a house?
| gsich wrote:
| The reason is "any reason". A wildcard.
|
| "I don't want them to know." is therefore a valid reason.
| inter_netuser wrote:
| banks in the UK are operating a charity? someone pays for
| all those skyscrapers.
| gambiting wrote:
| Well I mean, clearly they make their money elsewhere. I
| don't pay anything for having an account, debit card for
| it, or for making any transfers - that's with barclays.
| So their entire money making process is elsewhere.
| mschip wrote:
| In what way? As in financiers will pay with BTC? I don't
| know many people who pay for their cars or houses in one
| payment. Or is the suggestion that scheduled recurring
| monthly payments are viable?
| rjsw wrote:
| Paying for cars with one payment is fairly common, I just
| used my debit card for my current one.
| alisonkisk wrote:
| Poor people don't. Many rich people do.
| bob33212 wrote:
| I want Banks and Regulators involved when I buy a house. I
| understand that these 3rd parties can make things take
| longer or add extra fees, but that gives me legal
| protections I don't get with bitcoin.
| HashBasher wrote:
| It will. Via second and third layers. It'll scale just fine.
| An example second layer that you can use right now is the
| lightning network https://lightning.network/
| Nursie wrote:
| Lightning is a joke, with insoluble routing problems, a
| need for always-on nodes, the requirement to lock funds in
| channels, and the requirement for on-chain transactions to
| start and close channels. The BTC network can't process
| enough transactions to make even that viable.
| gruez wrote:
| >with insoluble routing problems
|
| can you elaborate on this?
|
| >a need for always-on nodes
|
| AFAIK if you're not a payment hub (ie. you want to route
| other people's payments) you don't need to be always
| online.
| Nursie wrote:
| > can you elaborate on this?
|
| Haviong trouble finding it now, but google "lightning
| network routing problems" and you'll get a _lot_ of
| results. IIRC the fundamental issue boils down to a hard
| mathematical problem about node traversal that is not yet
| solved. I am having trouble recalling the name right now,
| apologies.
|
| > AFAIK if you're not a payment hub (ie. you want to
| route other people's payments) you don't need to be
| always online.
|
| There have been ways that a counterparty can close a
| channel in their favour if you aren't online. Perhaps
| this has been fixed by now.
| gruez wrote:
| >There have been ways that a counterparty can close a
| channel in their favour if you aren't online. Perhaps
| this has been fixed by now.
|
| AFAIK the fix is to have a service (or multiple) stay
| online for you, and I believe it could be done without
| requiring access to your private keys. If your
| counterparty broadcasts a stale transaction that's in
| their favor, your service will broadcast a newer
| transaction that reverts it.
| bwood wrote:
| I was hoping that link would explain how to actually make a
| transaction with the lightning network. Can you do that
| with the Bitcoin-Qt client?
| nannal wrote:
| A transaction takes ~10 minutes, to ensure that the block which
| the transaction is included in isn't orphaned some services
| institute a 6 block waiting period to ensure the transaction is
| stable. Should the block be orphaned, the transaction will re-
| enter the mempool on all hosts who'd confirmed the block and
| should be included in a subsequent block.
|
| The transaction cost depends on the size of the transaction and
| the congestion in the mempool, the cost can be set by any
| sender depending on the urgency of the transaction.
| daptaq wrote:
| > how will Bitcoin become a usable currency
|
| It won't, it's just a speculative asset.
| doomroot wrote:
| I can send Bitcoin for free, instantly, trustlessly.
| shlant wrote:
| you can be a proponent of bitcoin without stating such
| blatant lies...
| oakpond wrote:
| It's not entirely trustless. You trust the security of the
| system.
| miked85 wrote:
| You are one for three.
| Cthulhu_ wrote:
| Bitcoin has nearly $20 transaction fees (https://ycharts.co
| m/indicators/bitcoin_average_transaction_f...) and it takes
| at least 10 minutes for a transfer to be confirmed
| (https://www.blockchain.com/charts/median-confirmation-
| time).
| reedf1 wrote:
| I find this data fascinating - partly because I don't
| understand it. I regularly send bitcoin and, as far as I
| can tell, have never spent more than a tiny
| (unquantifiable in fiat, as in much less than a cent)
| amount on transaction fees. Can anyone more savvy chime
| in on the discontinuity here?
| derivagral wrote:
| Not an expert, but I did make my own erc20 once.
|
| Are you sending it over the network, or to someone else
| within a website? (eg: binance, coinbase; doesn't need to
| be an exchange)
|
| Do you track your transactions later? Do they get
| confirmed? How many confirmations does a website need to
| count it? How long does that take?
|
| I would expect a low-fee transaction to eventually either
| expire or go through. I don't know what timeframe that
| might take: higher fee typically means higher priority as
| I've understood it. I can't imagine it'd keep your $ in
| limbo forever, but who knows. If you haven't used it in a
| long time, I understand that the network is much more
| congested these days.
| mj4m1n wrote:
| Money is a speculative asset.
| knorker wrote:
| Sure. Backed by the government who has the legal monopoly
| of use of force. And an army.
|
| So... there's that.
| charcircuit wrote:
| Are you suggesting the government could set the value of
| their currency by using force?
| knorker wrote:
| I'm saying that if a country's currency stops being
| accepted as the main means of exchange within its borders
| then its government will use laws to restore that.
|
| And if laws are not obeyed that's a police matter.
|
| Concretely if stores stop taking fiat, and only
| cryptocurrency, to the point where it affects the
| economy, then you should expect laws preventing that. If
| that doesn't help then you should expect to see arrests
| happening.
|
| Governments have the legal and physical ability to
| enforce monetary policy. Bitcoin nuts who say that "fiat
| currency is backed by nothing" are delusional. Several
| currencies are ultimately backed by nuclear weapons.
|
| So in other words cryptocurrencies are only allowed to
| the extent that they _don 't_ overthrow the whole system.
| And overthrowing the whole system was the whole point,
| right? (well, that and buy heroin and make ransomware)
| ric2b wrote:
| How is it backing? What does the government guarantee in
| exchange for $1USD (or some other amount)?
|
| The government issues USD, it doesn't back it.
| knorker wrote:
| In addition to what I wrote at
| https://news.ycombinator.com/item?id=26090146 :
|
| The government implicitly guarantees that the USD can be
| used to purchase goods and services. Take a dollar bill.
| It has "For all debts, public and private". This is a
| guarantee by the government. If the USD gets outcompeted
| in the US, then that would make the government a liar,
| and thus it would use its power to make that not happen.
|
| The government guarantees the value of fiat USD. The
| government has congress, police, military and nuclear
| weapons to back that guarantee.
|
| Not only is it a "promise" by the government. It's also
| in its best interest to maintain control of monetary
| policy.
|
| And also the people want it, so...
| ric2b wrote:
| > The government implicitly guarantees that the USD can
| be used to purchase goods and services.
|
| That's not backing, there's nothing that the government
| guarantees I am able to exchange for $1.
|
| > Take a dollar bill. It has "For all debts, public and
| private".
|
| That has a long list of exceptions. But regardless,
| that's not backing.
|
| > The government guarantees the value of fiat USD.
|
| No it doesn't, the value of USD fluctuates every minute,
| and goes down significantly over time.
|
| Once upon a time you could take your dollars to the
| government and exchange it for a fixed amount of gold.
| That was backing.
| knorker wrote:
| Do you disagree about what would happen if the USD would
| be at risk of being outcompeted inside the US, or are you
| just arguing semantics with no connection to the real
| world?
|
| (serious honest question)
|
| The US government _DOES_ guarantee that the USD has
| value. It 's not something that they cannot fail at, but
| they do guarantee it. Cryptocurrency has no guarantee _at
| all_ that it has value.
|
| If your definition of "backing" is that you are
| guaranteed to be able to exchange it for something else,
| then cryptocurrency is truly backed by nothing, making
| the statement "backed by math" commonly used by bitcoin
| nerds complete nonsense.
| analog31 wrote:
| Money is a technology, that's all. A technology can be
| developed and maintained to serve a specific purpose. It
| happens that major government money systems have been
| managed to serve purposes such as: Temporary store of
| value, convenient medium of exchange, and instrument of
| economic policy.
|
| Like any technology, it works or it doesn't, and people
| will use the one that works the best for them if they have
| a choice. For instance people in some countries use their
| local currency for daily purchases, but store their wealth
| in instruments that are valued in dollars, euro's, etc.
| Some people will break the laws of their own countries to
| lay their hands on those dollars or euro's.
|
| Money is speculative inasmuch as its value is still
| relative to other things such as stocks, gold, and
| bitcoins. Holding dollars instead of gold on any given day
| is a speculation. In a relatively free economy, there's no
| such thing as opting out of speculation.
|
| Bitcoins are unique inasmuch as they are designed to exist
| without any deliberate purpose being imposed on them. The
| only way a government can manipulate the value of bitcoins,
| that I can think of, is to subsidize the electricity for
| bitcoin mining.
| Cthulhu_ wrote:
| True, but there's a bajillion checks and balances to
| stabilize the value of it, no such thing for bitcoin. I
| mean mtgox bought virtual btc to drive up the price. Tether
| is a money printer created to push real money into btc. And
| it's quite telling that nobody's talked about BTC on its
| own since 2012, it's always been in relation to the USD.
| svrtknst wrote:
| yeah, but also a usable currency
| markyc wrote:
| that ship has sailed long ago. it is now seen as a replacement
| for gold and a hedge against inflation
| base698 wrote:
| It was always a hedge on inflation. The genesis block
| message: https://www.investopedia.com/terms/g/genesis-
| block.asp
|
| Nakamoto instilled within the Block's raw data: "The Times
| 03/Jan/2009 Chancellor on brink of second bailout for banks."
| altcognito wrote:
| So basically the entire premise is undermining confidence
| in the existing system of capitalism and Democracy.
|
| "Your money isn't safe in banks", and a healthy dose of
| making it easier to launder money.
| nlitened wrote:
| Bailout for banks has nothing to do with either
| capitalism or democracy, as far as I understand.
| jerry1979 wrote:
| Capitalist democracies produced the bailouts. Or maybe
| bread lines have nothing to do with authoritarian
| communism?
| pandeiro wrote:
| Pretty sure the existing system of capitalism and
| Democracy is undermining confidence in itself.
|
| Bitcoin just provides a hedge.
| dcolkitt wrote:
| I have no position in Bitcoin, but isn't it possible for "BTC
| scrip" to be the money used day to day. With actual blockchain
| transactions just being used to aggregate at the institutional
| level?
|
| This is pretty much the way money worked in the 19th century,
| just with gold instead of BTC. Nobody physically carried or
| transferred gold to buy a beer. They just used bank notes that
| were backed by a trusted intermediary holding the physical
| asset. It might make sense for a bank, or even a very wealthy
| person, to pay the cost of physically transferring the hard
| asset. But most just used IOUs that were backed by the
| underlying hard asset.
| UncleMeat wrote:
| It could, but why? The two things that BTC grants are
| trustlessness and the inability to enact fiscal policy. If
| BTC just becomes the backing for institutions, trustlessness
| is gone. So then it is a question of whether a backing unit
| that supports fiscal policy is better than one that doesn't.
| I think I know what institutions would prefer.
| oliwarner wrote:
| You're talking about a BTC bearer bond. Isn't that just what
| cash used to be? You've gone full circle.
| ulzeraj wrote:
| Off chain through Liquid or Lighting networks.
| joeblau wrote:
| The funny thing is that there is 117x more Bitcoin on Layer 2
| ETH in WBTC[1] than in the lighting network[2].
| $5,793,513,475.00 // WBTC (Bitcoin on Ethereum)
| $49,173,964.59 // Lightning
|
| [1] - https://wbtc.network/dashboard/order-book
|
| [2] - https://1ml.com/statistics
| gruez wrote:
| That's not surprising if you consider that tokenized BTC is
| often used for collateral in difi.
| joeblau wrote:
| _used where it 's useful ;)_
| mettamage wrote:
| IMO it isn't. However, I do see a huge for sending large
| transactions. In that sense, I don't find it too crazy that
| Tesla is accepting Bitcoin, because buying a Tesla is a large
| transaction.
|
| IMO a niche use though.
| alisonkisk wrote:
| I can't see Tesla BTC as anything more than a marketing
| gimmick for their computer geek clientele and fan base. Even
| if it's a logistical disaster, they probably make it back in
| _stock purchases_ from true believers.
| ashish1521 wrote:
| Tesla tested the waters with Elon's tweets and it shook the
| Bitcoin and sent it to all time highs, then Tesla bought
| large amount of Bitcoin and now the market exploded even
| further. It is a marketing gimmick, true, but it is making
| Bitcoin more volatile and unstable, while Tesla hoards more
| money from Bitcoin!
| robjan wrote:
| If Bitcoin is the future and an antidote to the alleged
| extreme inflation of the US dollar, it makes more sense to
| buy the Tesla in fiat
| sheeshkebab wrote:
| I think accepting Bitcoin as payment was tried before - it
| never worked since people buying it are either not selling
| (and using to store cash that keeps on growing), or buying it
| for speculative purposes via secondary instruments (gbtc,
| ethe).
|
| Not really sure what's point is for Tesla but my guess its
| speculative for them, with an attempt to get some additional
| value on cash they are starting to swim in now...
| [deleted]
| maclured wrote:
| > Not really sure what's point is for Tesla
|
| Speculation and free marketing I expect
| kgwgk wrote:
| Tesla isn't accepting Bitcoin.
| lynndotpy wrote:
| In theory, "lightning networks", which are basically a network
| of open transactions across wealthy, participating nodes (e.g.
| banks and exchanges.) A lot of smaller transactions can
| piggyback on the larger transactions basically for free.
|
| I don't think these are widely used in practice yet, but I
| might be wrong.
| kaba0 wrote:
| Isn't that the point of Corda?
| tomxor wrote:
| A maximum of 178 things on the planet can consume >= to the
| electricity of Bitcoin.
|
| 99.44%/0.56% = ~178 (according to their estimate of 0.56% global
| use). So for the many comments invoking rhetorical comparisons:
| Bitcoin mining value per watt can be compared to no more than 178
| things on Earth. Are we really saying there are only possibly 178
| better uses for global energy than doing double SHA2 for no
| material value?
|
| Bitcoin is wasteful.
| donutloop wrote:
| Fight the bitcoin climate crisis:
| https://senatusspqr.medium.com/fight-the-climate-crisis-usen...
| janoside wrote:
| Nic Carter's rebuttal to a Bloomberg comparison between
| Bitcoin/Visa, including assessments of total and per/transaction
| energy usage:
|
| "First of all, Bitcoin and Visa are fundamentally different
| systems. Bitcoin is a complete, self-contained monetary
| settlement system; Visa transactions are non-final credit
| transactions that rely on external underlying settlement rails.
| Visa relies on ACH, Fedwire, SWIFT, the global correspondent
| banking system, the Federal Reserve and, of course, the military
| and diplomatic strength of the U.S. government to ensure all of
| the above are working smoothly.
|
| Any energy comparison must take the above into account -
| including the externalities from the extraction of oil, which
| implicitly backs the dollar. As those who make this comparison
| inevitably fail to mention, the dollar's ubiquity is partly due
| to a covert arrangement whereby the U.S. provides military
| support to countries like Saudi Arabia that agree to sell oil
| exclusively for dollars. It's worth noting that the grossly
| oversized U.S. military, whose presence worldwide is necessary to
| backstop the international dollar system, is the largest single
| consumer of oil worldwide."
|
| https://www.coindesk.com/what-bloomberg-gets-wrong-about-bit...
| imhoguy wrote:
| Ok here is a puzzle: is there any electricity provider who
| accepts BTC?
|
| BTC runs on fiat money.
| mdoms wrote:
| On the other hand Visa actually works for its intended purpose.
| Gibbon1 wrote:
| And Bitcoin is a paper asset backed by absolutely nothing.
| splintercell wrote:
| Bitcoin is a global settlement layer. it is not a
| representation of something else, it's the final product on
| its own.
|
| You're not going to say that in a prison system cigarettes
| are not backed by anything for them to be used as a
| currency.
| Gibbon1 wrote:
| I take my comment back. Bitcoin is backed by 'the market
| can stay delusional longer than you can stay solvent'
| midasuni wrote:
| You can say that about any currency. An 80 year old
| billionaire still needs someone to care for him, just
| like an 80 year old pauper. He relies on the hope that
| his dollars will be accepted, to look after his medical
| and care needs as well as security and ownership needs.
| Aunche wrote:
| The first paragraph is a fair consideration. The second is a
| complete stretch. It's not as if America would suddenly stop
| providing military support to Saudi Arabia if we suddenly
| switched to bitcoin. An America that historically used Bitcoin
| would be even more incentivized to "secure" fossil fuel
| nations.
| nostrademons wrote:
| Take a look at OPEC companies that have priced oil in other
| currencies:
|
| Iraq started pricing oil in euros in 1999:
|
| https://www.theglobalist.com/iraq-the-dollar-and-the-euro-5/
|
| Iran started pricing oil in yuan in 2012:
|
| https://www.bbc.com/news/business-17988142
|
| What's our geopolitical relationship with Iraq and Iran now?
| totalZero wrote:
| The first Gulf War began in 1990, and the Iranian
| Revolution took place in 1979. The causality may well have
| taken place in the reverse of what you suggest.
| notahacker wrote:
| Yep. You'd think if the reason the US restarted their war
| with Iraq was using Euros as a reserve currency, they
| might have made a bit more fuss about those pesky
| Europeans creating the Euro with the explicit goal of
| being a global reserve currency a few years earlier...
| randomopining wrote:
| So they changed their pricing currency and _then_ we became
| enemies? Or we were enemies, and they changed their pricing
| currency because of that... lol
| Animats wrote:
| _It 's not as if America would suddenly stop providing
| military support to Saudi Arabia if we suddenly switched to
| bitcoin._
|
| No, but now that the US is a net petroleum exporter, puling
| the plug on the whole Middle East is a real possibility.
| johnyzee wrote:
| I think it is a very worthwhile observation, that existing,
| comparable systems also have massive 'externalities', only
| they aren't measured in kwH.
| totalZero wrote:
| That is a general defense of the form of the statement, but
| not a defense of the statement itself.
|
| The dollar is not the largest cause of perpetual US
| entanglement in the Middle East. Oil dependency, on the
| other hand, may be.
| njarboe wrote:
| Amazingly, due to fracking mostly in west Texas, the US
| is now a net oil producer. We should really change our
| Mid-East foreign policy to reflect that fact.
| roenxi wrote:
| If the Saudis started selling oil in bitcoin they'd probably
| lose their military support and/or be overthrown.
|
| It is difficult to justify why the US is providing militarily
| support to the Saudis without invoking oil and dollars. They
| are a pretty shady regime and not the sort of people the US
| wants to be supporting. And the Saudis don't seem to be
| trading with America as much as China [0, 1].
|
| [0] https://tradingeconomics.com/saudi-arabia/exports-by-
| country
|
| [1] https://tradingeconomics.com/saudi-arabia/imports-by-
| country
| endless1234 wrote:
| Would the need for oil and military go away were we to switch
| to using bitcoin for everything? Why are those coupled to the
| dollar's energy usage?
| DickingAround wrote:
| You still need to use oil, but you don't have to use dollars.
| The support for dollars relies on a lot of things including
| the government and thus the military, which are big costs and
| oil consumes. If the dollar didn't rely on the military power
| of the US, why is the Bretton Woods meeting and the post war
| monetary policy so important to it's dominance (something
| practically no one disputes)? Why is it that the US seems to
| care so much about pricing oil in dollars? You don't need a
| tinfoil hat (as other comments suggest) to notice the US
| government has a strong interest in everyone using our
| currency and that where the gov has a strong interest, it
| also uses it's guns.
| lucisferre wrote:
| Seems to depend on how well your tinfoil hat fits.
| jayd16 wrote:
| Ask yourself which of those things would go away if BTC
| replaced Visa. Only then should it count towards the cost.
|
| Somehow I doubt BTC would lower military spending.
| choward wrote:
| > including the externalities from the extraction of oil, which
| implicitly backs the dollar
|
| This isn't true. Internationally the thing that backs the
| dollar is the U.S. economy. People know they can spend dollars
| to get anything they need. Domestically what drives the dollar
| is that it's the only way you can pay taxes.
|
| I suppose you could say that oil is used to defend the U.S.
| economy but that's a stretch.
| loveistheanswer wrote:
| >>including the externalities from the extraction of oil,
| which implicitly backs the dollar
|
| >This isn't true.
|
| Basic economics and the law of supply and demand says that it
| is true.
|
| >when demand increases and supply remains the same, the
| higher demand leads to a higher equilibrium price and vice
| versa.
|
| https://www.investopedia.com/ask/answers/033115/how-does-
| law...
| rspeele wrote:
| Bitcoin fans when you complain that transactions are expensive,
| slow, and always irreversible:
|
| "Bitcoin isn't a replacement for Visa or for your checking
| account. It's a store of value. It's not for day-to-day
| purchases."
|
| Bitcoin fans when you complain that Bitcoin is massively
| wasteful:
|
| "If you compare it to every cost that can be attributed to the
| existing financial system as a whole, including military
| spending, it's cheap."
| justicezyx wrote:
| Please provide meaningful evidences for these claims?
|
| I might be in a bubble, but it seems my intake of bitcoin
| information is balanced enough that most things are not this
| polarized.
| Capira wrote:
| This nails it!
| baxtr wrote:
| Ok, I have to admit that I am one of those people who knew about
| BTC very, very early but never bought any. Now, of course I
| should have mined at least 100 back in the days, but anyways.
|
| The reason I have never mined nor bought into it is that I still,
| to this day struggle to come up with a real reason to do so.
|
| Am I getting too old? Do I not see the "huge potential" what it
| may become? Don't I want to get freaking rich? I simply can't
| answer what BTCs and other crypto coins are actually good for.
| Can someone help me out here?
| throwaway5752 wrote:
| No, I agree with you completely. I have missed the whole thing,
| from $100 up. So a bit later than you, but I have the same
| questions and some more about viability.
| josalhor wrote:
| I see a huge potential in cryptocurrencies, just not in Bitcoin
| per se. I can totally see the European Central Bank controlling
| some kind of CryptoEuro that is tied to the real euro and
| allows individuals to make transactions without banks.
|
| Banks would become an optional frontend on this transaction
| system, with security features built-in, etc.
| mikepurvis wrote:
| I don't think most normal people see "without banks" as a
| feature. Indeed, banks have already been peering with each
| other on transaction-clearing since forever, and I don't
| think it would take much for the EU to mandate a particular
| set of common APIs and maybe some entry criteria that allow
| increasingly smaller players access to the already-existing
| framework.
|
| All of this seems a lot easier and cheaper than bitcoin's
| distributed ledger.
| josalhor wrote:
| > I don't think most normal people see "without banks" as a
| feature.
|
| The other day I walked into a shop where I couldn't pay by
| card because the banks didn't provide the service to them.
| Users don't see "without banks" as a feature, but
| businesses will. It will reduce their fees and their
| dependency to the whole industry.
| mikepurvis wrote:
| Fair, but how many small businesses who are unable or
| unwilling to set up a payment terminal will be able to
| maintain the infrastructure needed to participate in a
| distributed consensus network?
|
| There will still be an intermediary to whom the small
| business will pay fees for a turnkey solution. And
| absolutely those fees would be lower in a world where
| anyone can participate and compete on them. But that's
| definitely not the world we live in just yet, and even
| if/when it arrives, I don't think anyone at the retail
| level (either the consumer or the storefront) will have
| an appreciably different experience from what they have
| today.
|
| EDIT: Just adding also, clearing times is the other huge
| barrier. Obviously no retail environment can tolerate a
| transaction delay of more than a few seconds, so the
| other function of the intermediary would be to manage
| that reality, by some combination of pre-clearing
| transactions for customers who look safe (classical CC
| fraud detection where de-anonymizing would be a key
| component), or maybe a pre-paying scheme (which ends up
| sounding a lot like a bank debit card).
| xur17 wrote:
| If you see something like the CryptoEuro taking off, doesn't
| it naturally follow that there would be a cryptocurrency that
| would take off that was global, and not issued by any
| individual country?
| IanCal wrote:
| Not really. I would find a way of transferring "cash"
| that's tied to my local currency far more useful on a day
| to day basis than one that fluctuates when measured against
| it.
|
| Most people don't really need or want to take on foreign
| exchange rate risks.
| xur17 wrote:
| To each their own.
| wickoff wrote:
| Can you really not find a single use for bitcoin?
|
| Here is the most obvious one - true sovereignty over your
| capital. When you have bitcoin, you have have physical
| ownership of a digitally transferable asset. Not legal
| ownership where a custodian ultimately decides whether you can
| access it.
|
| In theory nothing prevents individuals from carrying entire
| national budgets as seed words in their heads.
|
| You can argue ethics, legality but surely you have to
| acknowledge the power it gives individuals.
| nmfisher wrote:
| > Here is the most obvious one - true sovereignty over your
| capital. When you have bitcoin, you have have physical
| ownership of a digitally transferable asset. Not legal
| ownership where a custodian ultimately decides whether you
| can access it.
|
| This isn't really true though. At the end of the day, you're
| always subject to the powers that be who will come knocking
| on your door with guns if you stop paying your taxes. If they
| criminalize BTC, stick you in jail, it won't really matter
| that you have "physical ownership of a digitally transferable
| asset". Ultimately there's always a custodian who decides
| whether you can access it.
|
| It might currently have some small benefits over traditional
| currency (in terms of not needing to operate via the banking
| system) but that doesn't mean it's somehow outside the
| boundaries of traditional society.
| kungito wrote:
| Well, the owner of 51% of processing decides. It also has no
| use if both parties aren't connected to the internet. Also,
| you are in the truest sense not the owner of the bitcoins.
| You are using the "ownership service" of the network. If the
| network goes down, you lose access to the network (goverment
| internet filtering) or the network gets taken over, you lose
| everything. It's strictly worse than gold. The only downside
| of gold compared to this is that gold has to be physically
| stored somewhere
| wickoff wrote:
| If the owner of Bitcoin's 51% hashrate decides to take
| anyone's coins, then Bitcoin and cryptocurrency in general
| is over. They all go to 0. If that happens, then all of the
| critics will be proven right.
|
| Hasn't happened so far though because Bitcoin
| disincentivizes this sort of behavior.
| galfarragem wrote:
| > I simply can't answer what BTCs and other crypto coins are
| actually good for.
|
| Getting rich quickly. It might be the largest Ponzi scheme
| ever. I hope it's not..
| axxxo93 wrote:
| I appreciate an honest question. The negative sentiment around
| crypto is a bit extreme imo. Bitcoin does have intrinsic value.
| A trustless P2P payment network has value. Is POW flawed, yes.
| This is a big reason why I prefer and hold Ethereum. Eth is
| moving to POS which is vastly more efficient. It also has
| additional programability in the form of smart contracts that
| bitcoin does not have. Look into the DeFi space for further use
| cases.
| kgwgk wrote:
| When even the people who says that Bitcoin has intrinsic
| value prefer something else it's hard to buy the argument.
|
| What's the intrinsic value of Bitcoin then? $10000? $100? $1?
| marliechiller wrote:
| whats the intrinsic value of anything. currency is just an
| idea that a group of people all agree to abide by. I wont
| accept French Francs for payment - 30 years ago they were
| worth something - now people have agreed it should be
| replaced by the Euro. there is nothing physically different
| between the Frank and the Euro beyond the combined trust of
| the group. BTC is just another example except it doesnt
| have a physical existence
| axxxo93 wrote:
| > When even the people who says that Bitcoin has intrinsic
| value prefer something else it's hard to buy the argument.
|
| This argument doesn't make any sense. I prefer BTC over
| gold. This does not negate the intrinsic value of gold in
| any way.
| jefftk wrote:
| _> I prefer BTC over gold_
|
| What does that mean? That if you had some amount of gold
| you would sell it and buy bitcoin instead?
| axxxo93 wrote:
| Yes
| ric2b wrote:
| I certainly would.
| kgwgk wrote:
| You're right, that wasn't a very good argument.
|
| But the point is that saying that "it has intrinsic
| value" doesn't really mean anything if one cannot even
| given an order of magnitude of what it is.
|
| I won't say that the price of gold is directly related to
| its intrinsic value (there is no way to do "financial
| valuation" on it) but the situation with bitcoin is even
| worse. At least there are some industrial uses of gold
| that can be used to assign an objective value to an ounce
| of the metal.
| axxxo93 wrote:
| You're right. Calculating the intrinsic value of
| something is hard if not impossible. However, I would
| argue that global network that enables P2P transfer of a
| scarce asset is quite valuable. Is it more valuable than
| gold? Maybe. Only time will tell.
| kgwgk wrote:
| How many hundreds of global networks that enable P2P
| transfer of scarce assets do we have by now, though?
| arminiusreturns wrote:
| I'll make it to the point since I was in on bitcoin back in the
| cpu crunch days too:
|
| 1. As a medium of exchange. This was what the global community,
| and more particularly the techie community behind it wanted to
| use it as. We wanted a quick way to exchange payment across the
| globe without dealing with shitty companies like Paypal etc.
|
| but at some point, it became instead
|
| 2. A store of value. I'm not sure the order of effect on this,
| but then rich people who had the ability to influence the
| network effect started dumping real money into it, further
| inflating the price. I theorized at one point the central banks
| might have even participated on the dl, just because it's an
| easy bet to hedge on if you can poof money from thin air like
| they can.
|
| I think #2 has completely overtaken it's use as #1, and due to
| that and other factors, I expect a major collapse at some
| inevitable but undetermined point in the future.
|
| My personal evaluation and why I skipped bitcoin was because I
| saw that it did not have privacy protections built in, which is
| what the early coin community wanted (or so I thought). I kick
| myself for not keeping a few blocks sometimes (at one point I
| think I spent ~20 btc on a food order!), but oh well.
| esotericn wrote:
| You can send me money across the globe without a middleman or
| anyone being able to block that transfer.
|
| That's it.
|
| If you don't want that, you don't want that. Some of us do.
| acdha wrote:
| That's ignoring the middlemen who run the mining network, who
| you pay for every transaction, and the middlemen on both ends
| who convert to and from the real current which you use to buy
| and sell the things you actually use.
|
| Similarly, any government which wants to can block the
| network entirely or require everyone exchanging into real
| currency to avoid transactions involving people who've
| violated local laws. Since Bitcoin by design helpfully gives
| them a full list of your past activities anyone considering
| ignoring those demands has to consider the risk of
| consequences for their participation at any point in the
| future.
| esotericn wrote:
| Ah yeah, you're right, all of those legally sounding words
| invalidate actual use.
|
| Yes, I buy things with bitcoin, and no, you can't find it
| on the blockchain.
|
| (Or do I? :))
| acdha wrote:
| I'm not doubting that you use it, only pointing out that
| it's not free to do so.
|
| Similarly, maybe you haven't hit a transaction yet which
| a government made an effort to block but ... are you
| certain that nobody will ever try to do so or be
| interested in your past history? If you're trying to
| obscure your identity, consider how that would look under
| existing money laundering if any party led to your real
| identity being associated with those transactions. If you
| aren't confident that no government with jurisdiction
| will ever care, that's a factor to weigh on every
| transaction since you're leaving an immutable public
| record.
| ric2b wrote:
| > Similarly, maybe you haven't hit a transaction yet
| which a government made an effort to block but ...
|
| They wouldn't be able to unless they had over 51% of the
| mining power, and it would be easily noticed.
| acdha wrote:
| That's assuming that a direct attack on a network is the
| only option. What I described was much easier: if the
| government requires payment of taxes or reporting real
| identities, you're going to have trouble exchanging into
| real currency unless you're paying enough for someone to
| risk money laundering charges. Similarly, if a commercial
| exchange is required to refuse transactions traced to an
| address on a list, it'll effectively limit their ability
| to use the network. Most companies aren't going to risk
| their business on those transactions even if they're
| technically capable of processing them.
|
| Since the blockchain is public all of that can be
| retroactive, too, so any transaction has the risk that
| the other party will leak your identity, which similarly
| disincentivizes other people from taking them.
| ric2b wrote:
| None of that is about actually blocking the transaction,
| it's just about possible consequences of making the
| transaction.
|
| By that logic anyone in the world can "block" whatever
| they want by threatening consequences.
| bromuro wrote:
| It doesn't seem a good deal consuming so much energy for
| fixing that "middleman problem" - which I think it could
| affect 1% of the people?
| minitoar wrote:
| Unless, you know, it's illegal. Then someone with a gun might
| take you & it away.
| esotericn wrote:
| Well, sure.
|
| At the moment someone with a gun might stop me from going
| to have a cup of tea with my mother.
|
| I learned long ago to ignore such things in order to
| maintain my sanity.
| minitoar wrote:
| Is it illegal to go get tea with your mother somewhere?
| Today, Bitcoin is illegal to trade in some places.
| esotericn wrote:
| Yes, this is illegal in the UK.
|
| We're all criminals now. Such are the '20s.
|
| With the trajectory our political system is on, a few
| more months of this and the outcome where the guy with
| the gun pulls the trigger may well be preferable.
|
| The main escape valve at the moment is that the
| regulations aren't being enforced.
| ric2b wrote:
| Actually with Covid it might really be illegal to go get
| tea with your mother in some places, assuming you don't
| live with her.
| acesubido wrote:
| > I simply can't answer what BTCs and other crypto coins are
| actually good for.
|
| Everybody here is missing out why Bitcoin was made in the first
| place: the 2008 crash.
|
| The benefits of a globally liquid asset (not USD) will only be
| appreciated if you're living from a country that has a weak
| Central Bank.
|
| - Nigerians use it to import goods from China. This guy can't
| source USD to purchase imports for his mobile phone business,
| so he uses BTC [0]
|
| - Venezuela remote workers getting paid in BTC, because their
| central bank clamped down on USD inflow. They also didn't want
| to be paid in the worthless local currency. [1]
|
| - Remittance shops in Hongkong are using BTC to settle
| remittances by batch. Buy and sell to the last mile instantly,
| no exposure to volatility. This gives them way better FX fees
| and faster settlement (30mins vs. 1-3 business days). They pass
| the savings down to their customers as marketing spend, or they
| pocket the change to increase profit [2]
|
| - Argentina Central Bank is hoarding USD due to dwindling
| reserves. So they imposed a $200USD/month cap on individuals
| transacting with USD. People are flocking to BTC for remote
| settlement. [3]
|
| - Iran hit with sanctions cant use USD. So they're working on
| laws to use BTC for settling imports with China. They even
| issued BTC mining licenses for private companies. [4]
|
| I come from a country, where if you remit more than $10K
| outbound you'd have to: pay big fees ($200+), suffer bad FX
| rates, wait for 2-3 days, do a physical appearance at the
| branch for and pay documents/notarial stamps, sign forms,
| present and print out government ID's, just to say: "This is my
| money, I just want to send money to my dad overseas for medical
| purposes".
|
| December 2020, my mom had received USD in her dollar account.
| She wanted to withdraw and convert it to help build float for
| the family business, the local bank didn't have enough USD.
| They told her it was a 6-week wait, lots of people lined up.
| Lol.
|
| People from first-world countries have it good.
|
| [0] https://www.reuters.com/article/us-crypto-currencies-
| africa-...
|
| [1] https://www.bbc.com/news/business-47553048
|
| [2] https://www.reuters.com/article/us-crypto-currencies-
| remitta...
|
| [3] https://www.coindesk.com/crypto-is-booming-in-
| economically-c...
|
| [4] https://asiatimes.com/2020/10/iran-to-use-bitcoin-to-fund-
| im...
| tmoravec wrote:
| Bitcoin is a potentially revolutionary technology in a very
| early stage. The important new part, the consensus algorithm,
| is ground breaking.
|
| Now, the very first implementation (Bitcoin) kinda sucks, like
| most technologies in their first versions. But there are newer
| generations, each more interesting, and each unlocking more
| possibilities. We are for example getting:
|
| * No-autority enforcement of contracts (Ethereum).
|
| * A distributed computation (operating) system (EOS).
|
| * Decentralised finance, for example lending platforms (AAVE).
|
| * Cash-like payment system suitable for real-world payments
| (Monero).
|
| We're only eleven years in so it's a bit too early to say if
| it's all rubbish or if it will change the world.
| lottin wrote:
| Do you have any idea about what 'finance' is? Shuffling money
| around is not finance.
| rodiger wrote:
| Do you know what Aave is or any of the other decentralized
| finance protocols?
|
| Also: "the management of large amounts of money, especially
| by governments or large companies" it literally is
| shuffling money around.
| wil421 wrote:
| Bitcoin is over a decade old by now. It's certainly not
| become a revolutionary technology and is not in its infancy.
| louwrentius wrote:
| Fully agree, I bet somebody will reply that Bitcoin is like
| the early internet soon...
|
| https://davidgerard.co.uk/blockchain/2018/04/05/debunking-
| bu...
| godelzilla wrote:
| They're talking more generally about cryptographic
| protocols which have advanced far beyond bitcoin.
| doctorwho42 wrote:
| I'm in your boat, when it was first explained to me in a hacker
| space at college when it was first growing and priced at a few
| cents per 100++ Bitcoin. All I could see was a waste of energy
| and resources (time, energy, hardware).
|
| It will always be a drain on society, and it scares me that it
| hasn't failed because we see it draining our GPU industry to
| the point that market prices have gone insane and availability
| is practically non-existent / all left up to chance.
|
| It does take a rocket science to see the trends, as long as
| it's tied to needing hardware to compute arbitrary calculations
| to work... It's going to waste computer resources and energy.
| Both which are finite resources... Yes finite, solar cells
| aren't free to make, they don't last forever after you make
| them. Same with any other green technology. Maybe if fusion was
| our only power source it would be less of a concern, but we
| still haven't cracked Q=1, so... Yes it is a waste of finite
| resources.
| AnonsLadder wrote:
| You're looking at it from a totally wrong perspective. The
| U.S. government can print as much dollars as they want,
| whereas BTC cannot. The government does not care about green
| energy unless they can profit from it. To say that you did
| not buy BTC because of "wasting energy" is a very odd way to
| cope.
|
| You guys are so hung up on energy consumption, a meme, that
| you're forgetting the real intrinsic value of Bitcoin.
| heterodoxxed wrote:
| > _The U.S. government can print as much dollars as they
| want, whereas BTC cannot._
|
| In a macroeconomic sense, this is a strength of the dollar
| and a weakness of Bitcoin.
| shawnz wrote:
| It is a strength of the dollar as a fiat currency, but
| that doesn't mean it would be a good thing for every
| asset class to behave that way.
| okprod wrote:
| I understand the value of blockchain tech, but what's the
| intrinsic value of Bitcoin?
| sparkie wrote:
| Value which cannot be stolen or debased.
|
| Also, "blockchain" is just a data structure that has
| practically no use besides bitcoin.
| okprod wrote:
| > Value which cannot be stolen or debased.
|
| Bitcoin's "intrinsic value" is really value unto itself
| for the most part, at this point in time. Maybe in the
| future it'll be used more as a currency, and we've seen
| that with Tesla, Bovada, etc., but I don't think most
| governments will allow such a threat to their currency
| without additional controls.
|
| > Also, "blockchain" is just a data structure that has
| practically no use besides bitcoin.
|
| I've always felt the other way around actually; I think
| blockchain will be used more widely and longer-term than
| Bitcoin. Blockchain as a technology has already been
| invested in and deployed by firms like IBM and JPMorgan.
| 816238721639812 wrote:
| Centralised blockchains are an oxymoron. Just use
| JPMorgans SQL database, it's cheaper.
| diroussel wrote:
| Sometimes you want to trust and verify.
| bagacrap wrote:
| Cannot be debased? When the US government rules it
| illegal, or enough people collectively lose interest, btc
| will no longer have value.
| noch wrote:
| > When the US government rules it illegal, or enough
| people collectively lose interest, btc will no longer
| have value.
|
| Recall that for the first 2 years of its life, bitcoin
| had no market price. Bitcoin acquired a price because it
| has value to some people. That is, its having value
| preceded it having a price. What that should tell you is
| that even if a lot of people lost interest, bitcoin would
| still be valuable. The key insight arrives if you figure
| out what is valuable about Bitcoin that caused btc to
| acquire a price.
|
| " It might make sense just to get some in case it catches
| on. If enough people think the same way, that becomes a
| self fulfilling prophecy. " https://satoshi.nakamotoinsti
| tute.org/emails/cryptography/17...
| wetmore wrote:
| Seems like there have been numerous stories about bitcoin
| being stolen?
| sparkie wrote:
| Private keys can be stolen if you leave them lying
| around.
|
| Nobody can steal your bitcoin if your private keys are
| well protected. And of course, the best protection is a
| brain wallet.
|
| If a State attempts to implement an EO6102 equivalent for
| Bitcoin, they will be unable to enforce it.
| sodality2 wrote:
| Brain wallets are hilariously bad, if you make it up
| yourself; a randomly generated key is far superior and
| can still be memorized. Search up "brainflayer" for just
| one example of a brain wallet cracker.
| UncleMeat wrote:
| > Nobody can steal your bitcoin if your private keys are
| well protected. And of course, the best protection is a
| brain wallet.
|
| The end result of this is that a huge portion of humans
| cannot safely store their wealth in btc. I sure as hell
| don't trust myself to keep that much cash in a brain
| wallet.
|
| "If your private keys are well protected" might as well
| mean "if you can do four backflips in a row" to most
| people.
| bccdee wrote:
| Haha wait wait, so energy consumption is "a meme," but
| having a fixed supply of money is apparently a totally good
| idea and not at all a meme. We don't care about deflation,
| we don't care about monetary policy, we want a gold
| standard where instead of gold we just burn absurd
| quantities of carbon. lol
| InitialLastName wrote:
| > the real intrinsic value of Bitcoin
|
| Intrinsic: belonging to the essential nature or
| constitution of a thing [0].
|
| Bitcoin, being a series of bits proving you or one of your
| financial forebears burnt some spare energy without any
| material return, has no intrinsic value. Its value is
| _entirely_ extrinsic and intersubjective, in that it only
| has value if a quorum believes it has value.
|
| [0] https://www.merriam-webster.com/dictionary/intrinsic
| dieortin wrote:
| It's not draining the GPU industry. No one buys GPUs for
| mining Bitcoin anymore, they use ASICs.
| oblio wrote:
| They're mining it with malware on CPUs, don't underestimate
| human stupidity when faced with large numbers of people...
| celticninja wrote:
| They may be mining Montero but they definitely are not
| mining bitcoin
| Taek wrote:
| Even as just ASICs there's something of a drain, Bitcoin
| ASICs consume fab production which means less remaining
| production capacity for GPUs.
|
| This is an equilibrium that should eventually fix itself,
| but while Bitcoin and crypto mining is growing they are
| making a material dent in the global semiconductor economy.
| westurner wrote:
| Cryptoasset mining creates demand for custom chip fab
| (how different are mining rigs from SSL/TLS accelerator
| expansion cards), which is definitely not zero sum: more
| revenue = more opportunities.
|
| https://en.wikipedia.org/wiki/Price_elasticity_of_supply
|
| With insufficient demand, a market does not develop into
| a sustainable market. "Rule of three (economics)" says
| that markets are stable with 3 major competitors and many
| smaller competitors; nonlinearity and game theory.
|
| https://en.wikipedia.org/wiki/Rule_of_three_(economics)
|
| We've always had custom chip fab, but the prices used to
| be much higher. Proof of Work (and Proof of Research)
| incentivize microchip and software energy efficiency;
| whereas we had observed and been most concerned with
| doublings in transistor density.
|
| FWIU, it's now more sustainable and profitable to mine
| rare earth elements from recycled electronics than
| actually digging real value out of the earth?
|
| Compared to creating real value by digging for gold, how
| do we value financial services?
| totalZero wrote:
| I'm not sure about that...Search "best GPU mining 2021" on
| Google and you'll get several hits.
| shawabawa3 wrote:
| Most people mining use something like NiceHash, which
| rents out your hashpower to people who use it to mine the
| currently most efficient asset (usually
| ethereum/monero/doge+ltc)
|
| Mining bitcoin with a GPU would take around 5000 years in
| the best case scenario to pay off _with free electricity_
| jefftk wrote:
| None of those seem to be about Bitcoin? For example
| https://www.nicehash.com/blog/post/best-mining-gpu-
| in-2021 lists a "DaggerHashimoto" hashrate which would be
| for Etherium.
| MrApathy wrote:
| In the specific context of Bitcoin it may be true that the
| preference is for ASIC, but (1) some Bitcoin is still mined
| using GPU's and (2) there are several thousand active
| digital currencies, many of them favoring GPU's.
|
| Grandparent's wider assertion is absolutely true, the GPU
| market is skewed by miners. Purchasing a 3000 series GPU is
| not easy right now.
| shawabawa3 wrote:
| Do you have a source for (1)?
|
| I'm pretty sure GPU mining btc is inefficient even with
| free electricity (depreciation of the PC/GPU will
| outweigh benefits)
|
| edit: was curious so checked the math
|
| Using a 3060TI GPU (one of the most cost-efficient for
| performance gpu's available) would generate about
| $0.0002/day, or take ~5000 years to pay itself off even
| with free electricity
| Stupulous wrote:
| Doesn't bitcoin compute time go up with computational
| advances also? If so, any answer greater than a few years
| can be transposed to infinite time to cover costs.
| [deleted]
| biolurker1 wrote:
| In the end GPUs are better off using energy to play
| counterstrike than to generate sound money right?!
| DavidPeiffer wrote:
| >Ok, I have to admit that I am one of those people who knew
| about BTC very, very early but never bought any.
|
| I was too. I told a friend who owns a data center about it, and
| mentioned maybe he could stress test servers by mining bitcoin
| (this was before 2011, mining was very reasonable on consumer
| hardware). He never did to my knowledge.
|
| December of 2019 I ran into him and he thanked me for telling
| him about bitcoin all those years ago. He sold one for around
| $16,000, and still had 11 more. He literally didn't care if
| they dropped to $0, he considered it a win.
|
| I should reach out and see if he has sold another one this
| week. He could buy a new SUV outright.
| rednerrus wrote:
| I've been in since very early on as well. There isn't anything,
| other than black market transactions, that BTC is good for. The
| idea that it has some kind of inherent value is completely
| insane. People are willing to pay for it now because Tether is
| artificially keeping the price high. Sooner or later someone
| (US government, Russian mobsters) are going to nab those Tether
| dudes and the game is going to be up.
| px43 wrote:
| Hey there. I'm one of those people who read Schneier's Applied
| Cryptography in highschool in the 90s, and immediately
| recognized the groundbreaking potential of using asymmetric
| cryptography for currency.
|
| I work in information security, and have seen first hand how
| our existing financial infrastructure is held together with
| string and scotch tape. For 10 years or so, every time I heard
| about some big credit card theft, or wire fraud, or SWIFT hack,
| I would go see if anyone had figured out how to do
| cryptocurrencies yet. Then 2009 rolled around and I got an
| email forwarded to me from someone named Satoshi who had
| apparently figured out a really solid mitigation for the double
| spend problem, and had actually released some working PoC code
| in the form of Bitcoin.
|
| Yes, there are a ton of problems with Bitcoin. I've been
| extremely critical even since that first email, but those
| problems are nothing compared to the existing systemic problems
| plaguing traditional finance.
|
| Getting rich was never a draw for me. I'm not quite retired
| (though this year has been pretty good) but I have spent 10s of
| thousands of Bitcoins over the years building up various
| aspects of the economy in order to maximize the utility of the
| network. I could easily be living on my own private island if I
| had held onto the coins I CPU mined in the early days, but I
| have no regrets at all about how I spent those coins. I'm more
| passionate about this than most, I know, but I 100% believe
| that legacy finance is a massive hindrance to the
| sustainability of our species, and crypto-economics will be a
| key aspect in building healthy incentives for a technologically
| driven society.
| zadler wrote:
| Why only healthy incentives? Could they not equally be
| unhealthy ones?
| px43 wrote:
| First off, "healthy" is subjective, and open to the
| interpretation of the builder. Second, why would someone
| work to build unhealthy incentives? Seems
| counterproductive.
| ced wrote:
| _I 100% believe that legacy finance is a massive hindrance to
| the sustainability of our species,_
|
| Could you please expand on that? Why?
| nelsonenzo wrote:
| So, what about refunds when corporations rip us off?
|
| And what about losing 100% of my funds when my key is lost or
| stolen? All keys are lost/stolen - it doesn't take a rocket
| degree to have observed that from human behavior.
|
| Who enforces splitting of equity when some rich dick beats
| his wife into submission? The courts don't control any
| bitcoin keys.
|
| The problems of bitcoin are proportionately larger than then
| problems with fiat. The only people saying otherwise are
| those that are profiting from the opposite perspective.
|
| If we are not a bitcoin miner, then how will we get the funds
| to begin with? Right now I can trade fiat for it, but in the
| future my children would not be able to trade fiat for it
| (assuming it's as good as you say it is). So, they will
| become indentured servants to the bitcoin miners.
| DownGoat wrote:
| It would be solved in the same way those problems are
| solved today, through court. Not following court orders
| ultimately leads to enforcement through force. You'd end up
| arrested and jailed at some point.
|
| >> If we are not a bitcoin miner, then how will we get the
| funds to begin with? Right now I can trade fiat for it, but
| in the future my children would not be able to trade fiat
| for it (assuming it's as good as you say it is). So, they
| will become indentured servants to the bitcoin miners.
|
| I don't quite understand the point you are trying to make
| here? Cash just don't magically appear today either. Why
| wouldn't they be able to trade fiat for crypto in the
| future?
| scatters wrote:
| > Cash just don't magically appear today either.
|
| Cash doesn't, but money does. The principal function of
| central banks is controlling the rate of money creation
| to ensure that the money supply supports economic
| activity.
| nelsonenzo wrote:
| > You'd end up arrested and jailed at some point. -
| assuming they didn't flee - assuming they didn't spend
| the bitcoin - assuming they didn't transfer the bitcoin,
| and then claim it was stolen/lost.
|
| With fiat controlled by banks, most liquid assets are
| frozen during these sorts of disputes for the above
| reason. A threat of jail in the future also doesn't
| really help the other person during that timeframe.
|
| Cash does magically appear, actually. It's printed by
| mints and released via monetary control.
| shawnz wrote:
| Civil forfeiture has become a controversial issue lately.
| It's not clear that the ability of financial institutions
| to do that is actually a net positive for society.
|
| Consider how it'd be easier to catch criminals without
| the fourth and fifth amendment, but it is more important
| to provide protections against government overreach.
| DennisP wrote:
| Some of the following applies more to chains with smart
| contracts, rather than Bitcoin itself, but:
|
| > refunds when corporations rip us off?
|
| Easily implemented in various ways. One old scheme is a
| simple 2-of-3 multisig, where the keys are buyer, seller,
| and arbitrator. If buyer and seller agree, the arb doesn't
| have to be involved, otherwise the arb decides where the
| funds go.
|
| > what about losing 100% of my funds when my key is lost or
| stolen?
|
| Hence Vitalik's advocacy of social recovery wallets:
| https://vitalik.ca/general/2021/01/11/recovery.html
|
| > Who enforces splitting of equity when some rich dick
| beats his wife into submission? The courts don't control
| any bitcoin keys.
|
| No, but courts have effective ways to make you pay up even
| when they don't directly control your funds, including
| putting you in jail for contempt.
|
| > my children would not be able to trade fiat for it
|
| If Bitcoin or whatever isn't available to anyone besides
| miners, then I don't see why it would have any value at
| all. Cryptocurrency that succeeds is out in the economy,
| not locked up in a small group of professionals. There are
| plenty of cryptocurrencies owned only by a small group of
| enthusiasts, and they are nearly worthless.
| reaperducer wrote:
| _One old scheme is a simple 2-of-3 multisig, where the
| keys are buyer, seller, and arbitrator_
|
| Who is the arbiter? Who pays for the arbiter? Do I have
| to negotiate for an arbiter for every purchase I make?
| There's a candy store down the street that takes Bitcoin.
| Am I really supposed to figure out an arbitration scheme
| just to buy a tub of popcorn?
| boldslogan wrote:
| This third party arbitrator's decision... if it is not
| liked by one party. Wouldn't that party demand an
| arbitrator on the decision1? But then couldn't decision2
| be demanded to be arbitrated by the other party. And
| then. And then... it doesn't seem to stop? In other words
| it seems you would need some kind of judicial process to
| keep in check the arbitrators. Which then sounds just
| like regular money, where you can usually arbitrate many
| times?
|
| I'm also in the grandparent's boat and I just want to get
| another view on this.
| DennisP wrote:
| That's not how it works in regular life. If two parties
| agree on an arbitrator, then that arbitrator's decision
| is binding.
| xtracto wrote:
| All of those are the same problems money has. Refunds
| capability is something built on top of cash. It will be
| built on top of cryptocurrencies. Money can be stolen and
| locked and hidden and whatnot.
| UncleMeat wrote:
| But if it is built on top of cryptocurrencies then you
| don't have the trustlessness that makes it different from
| cash and banking. Why would banks and businesses choose
| to transact primarily in btc?
| DownGoat wrote:
| Because the markets wants to trade on it. Going with the
| assumption that crypto will "succeed" in the future, any
| business or bank not trading on it would be loosing out
| to businesses that are capable to do both.
| UncleMeat wrote:
| That is circular. BTC will succeed as an investment
| because it will supplant other systems for banking. BTC
| will supplant other systems for banking because it
| succeeds as an investment.
| xtracto wrote:
| I think that's the same issue that every new technology
| related to network effects has had. Like Napster,
| Myspace, facebook, etc
| nelsonenzo wrote:
| Yes, and we have built safety measures to protect
| individuals in these cases, none of which work in a
| trustless key-based storage world.
| badjeans wrote:
| What a weird comment. There's tons of fraud within the
| bitcoin ecosystem, and it's also used in a lot of fraud too.
| amelius wrote:
| > What a weird comment
|
| It's just another comment by someone who tries to fabricate
| a self-fulfilling prophecy.
| NickM wrote:
| I think you are very confused.
|
| Asymmetric cryptography is a completely separate, much older
| technology that has nothing directly to do with
| cryptocurrencies.
|
| Furthermore, Bitcoin does nothing to solve the kind of fraud
| problems you are talking about, and in fact makes the
| consequences of them much worse, since you no longer have a
| central authorities that can reverse fraudulant transactions
| and the like. The "double spend" problem refers to a problem
| in distributed systems, not applied security.
| ric2b wrote:
| > Asymmetric cryptography is a completely separate, much
| older technology that has nothing directly to do with
| cryptocurrencies.
|
| It does, Bitcoin wouldn't work without it, the whole thing
| relies on cryptographic signatures.
|
| > The "double spend" problem refers to a problem in
| distributed systems, not applied security.
|
| Is it not both? It's a security issue present in
| distributed systems.
| NickM wrote:
| _Bitcoin wouldn 't work without it_ - sure, it's a
| building block, but the core innovation behind Bitcoin is
| not asymmetric crypto. The parent comment was implying
| that using asymmetric crypto in finance would solve
| problems with security and fraud, when in truth,
| asymmetric crypto has already been in use since well
| before Bitcoin came along, and is an important technology
| but has not magically solved all our security problems.
| There are multiple separate things being conflated here
| in incorrect ways.
| bondarchuk wrote:
| > _There are multiple separate things being conflated
| here in incorrect ways._
|
| Only by you. Read more carefully.
| throwaway5752 wrote:
| Maybe you can help me out, then? How does the network
| increase the transaction rate to current global rates (at
| least 10^4 higher)? What happens when the mining phase
| completes, or if there is a drop in value? What is a
| sustainable transaction fee for miners to take absent mining
| incentives? What happens over long periods of time from
| hardware failures where wallets are lost? It's probably my
| problem not researching well enough, but if you know or can
| point me to anything I would be grateful.
| ric2b wrote:
| > How does the network increase the transaction rate to
| current global rates (at least 10^4 higher)?
|
| Efficiency improvements on the base chain, 2nd layer
| technologies like Lightning Network and ultimately
| increasing the base block size limit.
|
| > What happens when the mining phase completes, or if there
| is a drop in value?
|
| Mining doesn't "complete". There have been many massive
| drops in value in Bitcoin's history, not sure what you're
| asking about, it just keeps working?
|
| > What is a sustainable transaction fee for miners to take
| absent mining incentives?
|
| Anything above 0 is sustainable, you can mine for free if
| you're using the energy to heat your house.
|
| The question is how much energy the network needs to spend
| to remain secure, that I don't know, depends on how much
| any potential attackers are willing to spend to attack it.
|
| > What happens over long periods of time from hardware
| failures where wallets are lost?
|
| Bitcoin deflates? If some coins are lost but demand remains
| the same the value of the remaining coins goes up.
| jakupovic wrote:
| The problem that you and others like you have is you don't have
| any BTC and now are struggling to understand why anyone else
| would have any. I think it's mostly from the fact you didn't
| get any when you should have and now there is no reason as it's
| expensive and again you don't have any. Simple really.
| dang wrote:
| Please don't cross into personal attack in HN comments, or
| take HN threads further into flamewar. We're trying to avoid
| that here.
|
| https://news.ycombinator.com/newsguidelines.html
| ThomPete wrote:
| you can just buy satochis, dont think about the price of
| bitcoin, think about how much money you want to invest.
| RobertKerans wrote:
| That doesn't really answer the question "what is the point of
| it" unless the only point is to create wealth for the people
| who do have it.
| jakupovic wrote:
| "what is the point of it" From bitcoin wiki: Bitcoin is a
| decentralized digital currency, without a central bank or
| single administrator, that can be sent from user to user on
| the peer-to-peer bitcoin network without the need for
| intermediaries.
|
| The trustless exchange part was worked on for a long time
| and Bitcoin came around and solved it. This is why
| questions like that are completely ignorant of anything
| technology and really makes me question the instigator's
| motives.
|
| Edit: adding a link to an answer provided to the same
| question on this site
| https://news.ycombinator.com/item?id=25256738
| RobertKerans wrote:
| I think you're seriously misrepresenting the questioner.
| _People who question the point of it understand that the
| aim is to be currency_. Calling people questioning the
| point idiots who don 't understand technology doesn't
| answer the question either, it just makes you look like a
| dick. You're on a forum where the majority of posters
| have at least a higher-than average understanding of
| current technologies, so I'm skeptical that you have a
| much deeper understanding than most of them. And even if
| that is the case, what you're saying is just rude. There
| are negative stereotypes surrounding bitcoin enthusiasts
| that you are playing into very successfully here.
| jakupovic wrote:
| I didn't call anyone any names, as opposed to what you
| are doing, and I will not. In any case Bitcoin is here to
| stay and you will own it, either directly or indirectly,
| but it's not going away. So questioning it's idea of
| existence doesn't further the conversation, I'm sorry,
| but it really makes the questioner seem ignorant. It's
| the same question being asked since 2011, when does it
| stop?
| RobertKerans wrote:
| Nobody's questioning it exists. This is a wilful
| misrepresentation of why people have issues with it --
| the reason why I got pissed with the things you've
| written is that they match the stereotype bitcoin
| enthusiast speil almost to a tee. I can understand _why_
| it exists, and what the value proposition is, and what it
| promises, _and still question what the point of it is
| because there are huge glaring issues with it_.
|
| > when does it stop
|
| It doesn't, because of the very obvious problems with it
| as a currency vs. existing currencies. If those magically
| go away, then people will stop questioning it. As it is,
| there is very little sign of that ocurring.
|
| There is no disconnect there, no hidden motives. People
| use currency. Do the benefits of bitcoin outweigh what
| seem like huge downsides? Quoting the technical
| underpinnings of it as if it's some slam dunk -- how do
| you seriously think this persuades people?
|
| Edit: also this
|
| > The problem that you and others like you have is you
| don't have any BTC and now are struggling to understand
| why anyone else would have any. I think it's mostly from
| the fact you didn't get any when you should have and now
| there is no reason as it's expensive and again you don't
| have any. Simple really.
|
| This reads as the reason people people have problems with
| it is envy, that they didn't buy some before it
| skyrocketed in value, and they now can't buy any.
| jakupovic wrote:
| I'll respond only to the last part. My post was made in
| fun and I didn't mean to offend anyone, maybe accost them
| a bit. The initial poster I was replying too did say that
| they had access to bitcoin and could/should have kept
| some as do most of us hence the post. The subsequent
| replying was made to explain, poorly it seems, why it's
| useful.
| totalZero wrote:
| I think this is a heavy-handed reply. His personal lack of an
| answer to the question, "what's the value," is presumably why
| he didn't buy in at the beginning.
|
| Also, even if he had two or three Bitcoin it would be a nice
| windfall, but not an earth-shattering event that would cause
| eternal jealousy.
| jakupovic wrote:
| People are asking a pretty basic question on a supposedly
| technological forum. It would be like me asking what's the
| point of Linux, the OS problem was solved by (D)OS(X), or
| something similar. I'll admit the reply is heavy handed but
| there is a reason Bitcoin exists and people are using it so
| when do these questions stop?
| totalZero wrote:
| Let's say you have a side hustle of selling shoplifted
| Tide Pods via Craigslist, and you want to use digital
| payments. In that case it's easy to understand the value
| of bitcoin. But for the millions of people who have no
| problem whatsoever making digital transactions via
| PayPal, Zelle, Venmo, CashApp, ACH, wire, or one of
| numerous other formats, why go to the trouble of making a
| whole new currency with corner-case issues (price
| volatility, potential cryptographic weakness, energy
| cost, early adopter advantage, and so forth) when the
| dollar is fairly stable? It's not a basic question, IMO
| it's a deep one.
|
| The dollar works plenty good for digital transactions,
| and with the right bank I can withdraw money anywhere in
| the world at a reasonable exchange rate without paying
| additional fees. Credit cards work worldwide. If you pay
| your taxes and don't partake in illegal commerce, it
| seems like a fairly good system. I can get around the
| inflation risk to some degree by buying commodities,
| securities, or property, and convert to cash when I need
| it.
|
| I don't think the questions ever stop. We're questioning
| the dollar and yet we've used it for centuries. We're
| questioning gold and yet we've used it for millennia. We
| don't know what the world's cryptocurrency of choice will
| be in the long term, we don't know who we're helping by
| bidding up bitcoin (Musk? Cartels? Nerds from MIT and
| CalTech?), and we don't know the impact that future
| energy and computing technologies will have on
| cryptocurrencies.
|
| It also appears to me that anyone who buys and holds
| bitcoin would make money in a global system that uses
| bitcoin, because (A) money cannot be created beyond a set
| limit but can be destroyed/lost, (B) the marginal cost of
| use goes up as more participants get involved, and (C)
| inflows to an asset with limited supply always bid up the
| price because of basic economics. What makes a currency
| good is that its price stays stable relative to the
| commodities for which it is used to transact. When the
| time value of money far exceeds the time value of human
| activity, you get deflation and that's a poor
| characteristic for a currency because it punishes those
| economic participants who are active.
| jakupovic wrote:
| First, you have a bunch of ideas that you're trying
| compose into an argument, you were not successful.
|
| Second, Bitcoin solves the problem of digital exchange
| between non-trusting parties, this is a very hard problem
| that didn't have a solution before Bitcoin came around,
| that's why it exists and it's useful.
|
| Above, you do weave U$ Dollar throughout, let's use it to
| explain Bitcoin. Currently the trust-less exchange is
| solved by holding assets which others trust. This means
| that if you have $100 you can show it other people and
| they can see that you have it and test that it is really
| $100. The reason $100 is $100 is because USA makes sure
| that is true. Now, non-US people are not the happiest
| that the US dollar is effectively the world currency.
| This has roots in WW*, Bretton Woods, etc., beside the
| point for our needs. The biggest problem is that US
| controls the dollar supply, just in the last year the
| supply has increased by ~25%, making everyone else'$
| cheaper. If instead the world currency was Bitcoin or
| some other cryptocurrency, one entity would not control
| the supply, the supply would be controlled by algorithms,
| which are easier to understand than some old white men.
| To me the last point, about algorithms, is enough to make
| bitcoin useful. No matter how much we fight it the world
| is going digital, and why would money be an exception?
| csomar wrote:
| Sure, let me help you: Apple, Amazon, Tesla and some third-
| world real-estate have made x100+ gains in the last 20-30
| years. It's not the fact that you are getting old, but that
| speculating about future yield is a business.
|
| There is no reason to speculate about Bitcoin, the same as
| there is no reason to speculate about real-estate land going up
| in Antarctica .
| totalZero wrote:
| If everyone were to get excited about Monopoly money as a store
| of value, it would be wrong to tell you that you fail to see
| the huge potential. The crowd decided that bitcoin is worth
| something, and thus it is worth something. That doesn't make
| you wrong for not being part of the crowd.
|
| Today Elon Musk chooses BTC and it goes up. Tomorrow the US
| government could crack down on BTC and it could go down. Maybe
| a technical weakness arises. Maybe the dollar breaks and it
| goes to a million. That doesn't mean it has potential, nor that
| it's useful. It just means there's uptake.
| JumpCrisscross wrote:
| > _doesn 't mean it has potential, nor that it's useful. It
| just means there's uptake._
|
| This is a bit nihilistic. Bitcoin's value has reallocated a
| huge amount of technical talent and resources in the global
| economy. It also has a growing carbon footprint. These give
| the public, and by extension its members, legitimate exposure
| to its downsides. Given that exposure, it's valid to consider
| managing it.
| totalZero wrote:
| So you determine the inherent value of something based on
| its price action?
|
| To flesh this out: I'm not arguing that BTC has no value,
| nor that it has no externalities, so I really don't
| understand what motivates your reply. I don't feel that
| there's anything nihilistic about pointing out the logical
| flaw in saying, "oh the concept of Bitcoin has 12% more
| inherent value now than yesterday because the price went up
| by that much." I recognize that the article is about
| electricity, but I'm not sure how you get from my comment
| to electricity. If Bitcoin crashes tomorrow, does that mean
| that the inherent value (or conversely, the societal
| burden) of the concept went down?
| JumpCrisscross wrote:
| > _So you determine the inherent value of something based
| on its price action?_
|
| Not at all. But in this case, the broader cost of Bitcoin
| scales with its price.
| totalZero wrote:
| Sure, and the cost to Hasbro of making monopoly money
| could scale with its price if there were a market for it.
| But the inherent value of a monopoly dollar would not be
| dependent upon that cost.
|
| When you say "the broader cost of bitcoin" you're talking
| about electricity right? Aside from the important fact
| that "cost" isn't "value", there are a couple problems
| with that. First of all, many people are finding arbs in
| energy (eg, you live or work in a dorm, lab, or other
| building where don't pay an electric bill) and using free
| electricity to mine. That provides liquidity/fungibility
| by contributing to transactions, without incurring any
| cost to the miner. Second, people and entities with large
| early reserves of bitcoin have an incentive to mine even
| when the energy cost is greater than the mining return,
| because a better functioning bitcoin is more likely to
| attract further inflows that impact the price upward.
| scottLobster wrote:
| In terms of getting rich, that was luck. Some people with
| perhaps more money than sense played the lottery and won.
| Bitcoin could have, and might still fail with governments
| giving it more scrutiny as it grows, or this may be its peak,
| so anyone buying now is screwed. No way to know.
|
| It's also easy to look back at Amazon and say you should have
| invested back when they were an online bookstore that talked a
| big game. With the information available at the time it
| arguably would have been a stupid decision.
|
| For everyone who won big on Amazon and everyone who's winning
| big on Bitcoin, there are thousands if not millions of
| investors who bet on something with legitimate confidence and
| lost it all or under-performed.
|
| As for what it is, as far as I'm concerned it's just another
| commodity. The value of said commodity can be debated, the same
| way people can talk about how silver is not only a precious
| metal but has substantial industrial demand driving it, unlike
| gold. They're still all commodities.
|
| Now plenty of people have played the commodity lottery and
| gotten crazy rich in crazy circumstances that are hard if not
| impossible to repeat. If you want to try and be one of them by
| speculating on bitcoin, don't use any money you can't lose.
|
| For my perspective, my financial goals for my family haven't
| been met yet and probably won't be for a couple of decades
| given that we've yet to buy a house and the wife and I are
| hoping to give our future kids a full ride through college. I
| can invest the money I make in cheap, diversified funds based
| on Fama/French factors and have nobel-winning math and
| statistics saying I have a positive expected return over time
| given 100 years of stock market history, or I can gamble it in
| the various single-stock/commodity/sector lotteries with large
| amounts of uncompensated risk and hope I win big, but more
| likely lose and never meet my goals.
|
| My current solution to "more money" is I'm seriously looking
| into trying to get some sort of lifestyle business going on top
| of my day job. Worst case scenario it sharpens my technical
| skills and makes me even more employable. I like sets of
| outcomes that don't include (or at least minimize the
| likelihood of) "zero".
| onyb wrote:
| Once you understand Bitcoin, there's no way why you'd go back
| to the legacy system. It's not Bitcoiners getting freaking
| rich; it's them adopting a superior store of value that is
| being selected as the winner in a free market.
|
| Most people are perfectly happy entrusting their (fiat) money
| with the banks, and asking permission for accessing their
| funds. Bitcoiners, on the other hand, have tasted the freedom
| of self-custody and a permissionless payment system.
|
| Whether it has value or not depends on how important it is to
| have a monetary good that is not issued by a nation state, and
| cannot be controlled/stopped/inflated/modified.
| 542458 wrote:
| > there's no way why you'd go back to the legacy system
|
| I can think of lots of reasons.
|
| * Deflationary currencies are dangerous. Inflation is a
| feature, not a bug.
|
| * If I screw up a bank transfer or have my credit card
| details stolen, I can have those transactions reversed. No
| such luck with Bitcoin. The idea of losing my life's savings
| to a zero day or sophisticated hacker doesn't sounds great to
| me.
|
| * I can't remember the last time my bank got DoSed.
|
| * Bitcoin's value fluctuates wildly, making it a poor medium
| of exchange.
|
| * I like that my country can adjust monetary policy in
| response to world events like pandemics. That's a feature,
| not a bug.
| onyb wrote:
| Fortunately, no one is forcing anyone to adopt Bitcoin, if
| the features are undesirable.
|
| > Deflationary currencies are dangerous. Inflation is a
| feature, not a bug.
|
| You may be right, but we can't stop a community from
| choosing something deflationary as their preferred
| currency.
|
| > I can have those transactions reversed. No such luck with
| Bitcoin
|
| I'd argue this is a feature in Bitcoin for many people.
|
| > I can't remember the last time my bank got DoSed.
|
| You're fortunate. Last time I went to a bank (right after
| COVID hit), I was denied cash withdrawals due to liquidity
| issues. That's what happens when your money is in custody
| of someone else. Once you look outside first world
| countries, you'll see the demerits of centralised systems
| handling critical resources like money.
|
| > Bitcoin's value fluctuates wildly, making it a poor
| medium of exchange.
|
| I'll agree with this point. Perhaps it's because of the
| nature of the market itself. Bitcoin trades globally, 24x7
| and 365 days a year, without circuit breakers when there's
| extreme volatility. It's not appropriate for buying candies
| from a store, but maybe a good option for a Tesla?
|
| > I like that my country can adjust monetary policy in
| response to world events like pandemics.
|
| On the contrary, people holding Bitcoin during the pandemic
| were relatively well off in 2020. The stimulus package had
| negative impacts too, like asset inflation. But more
| concretely, Bitcoin is the first true alternative to
| central banking, and many people are happy to adopt it
| because it solves important problems for them.
| ggrrhh_ta wrote:
| Understanding Bitcoin _really_ can also convince you that it
| might not be a superior store of value. Think of the
| consequences of someone breaking SHA256 which, given, at the
| moment looks absolutely unfeasible, or of some entity or
| coordinated entities to actually control the main branch, or
| the cost of energy to mine (and the fees) exceeding the value
| of bitcoin at a point in time, or more mundane things like
| loosing the private key of an address.
|
| edit:typos
| UncleMeat wrote:
| These kinds of posts are so frustrating. "Blub currencies".
| They insist that everybody skeptical of BTC's utility must
| simply be ignorant. This is a deeply uncharitable way of
| discussing almost any topic.
| sanderjd wrote:
| My answer to this is that back in the early '10s I massively
| _underestimated_ how successful it would be as a pyramid scheme
| that I could get in on early, but that I massively
| _overestimated_ how useful it would be as a currency, despite
| having an extremely low estimation of that. So I guess you and
| I should have had better foresight to see how good it would be
| for unhinged speculation, but frankly I never really have any
| regrets about this: I 'm fundamentally not a gambler or a
| speculator. (However I might not like it if my wife were to
| gain a full understanding of how much wealthier and easier our
| lives could be right now if that hadn't been the case.)
| shp0ngle wrote:
| It's good for telling other people to buy more and checking
| price daily.
| octocop wrote:
| And making whiny comments on HN when it's mentioned.
| hobofan wrote:
| Determining fully decentralized consensus between arbitrary
| participants (or at least one of the best approximations of
| that). In Bitcoin that consensus is limited to transactions, in
| Ethereum with smart contracts it can be used for much more
| (though that might require additional layers of incentivation
| to work properly, depending on the use case).
| grey-area wrote:
| Nobody actually wants fully decentralised irreversible
| consensus between arbitrary participants on a public ledger
| because it is slow, costly and doesn't solve real-word
| problems of identity verification, trust, reversible
| transactions, private transactions etc etc. People have tried
| and failed for years to find a compelling use for it.
|
| It's a very interesting experiment in social engineering but
| I find it difficult to find a concrete example of bitcoin
| being useful. Making some people very rich at the cost of
| others is not sufficient justification. If anything fewer
| people are actually using bitcoin now for real transactions
| not involving speculation on prices than in 2015 say.
| godelzilla wrote:
| >slow, costly and doesn't solve real-word problems of
| identity verification, trust, reversible transactions,
| private transactions etc etc.
|
| I strongly recommend researching cryptographic protocols
| besides bitcoin.
| blhack wrote:
| >Nobody actually wants fully decentralised irreversible
| consensus between arbitrary participants on a public ledger
| because it is slow, costly and doesn't solve real-word
| problems of identity verification, trust, reversible
| transactions, private transactions etc etc.
|
| Are you sure? In fact it seems like quite a few people want
| that, as evidenced by the entire crypto space.
| grey-area wrote:
| On the contrary, the current crypto space resembles a
| classic speculative bubble right now, it's a perfect
| example of mania, and spurious justifications like this
| of a new paradigm which explains the crazy valuations are
| also classic signs of that.
|
| Hardly anyone is using these currencies to actually
| perform transactions or store value because they are
| awful in so many ways for that (volatility, treated and
| taxed like an asset, unpredictable fees, slow settlement,
| no fraud protection etc). All the transactions, all the
| new accounts flooding into exchanges are there for one
| reason - to strike it rich in the new gold rush.
|
| Coins intended to be a valueless joke are worth SIX
| BILLION DOLLARS and nobody is actually using them as a
| currency or a consensus mechanism or anything useful -
| this is pure speculation on finding a greater fool later
| on when you want to sell, if you're even thinking about
| later on, because perhaps this will never end and it's
| different this time.
|
| People are buying and selling cryptocurrencies as they
| did beanie babies or tulips...
|
| https://theweek.com/articles/461977/great-beanie-baby-
| bubble
| viro wrote:
| yes, most people are invested in crypto because they
| wanna get rich with that 355% increase FULL STOP. No one
| with a brain uses it as currency. For the same reason
| that inflation is ALWAYS better than deflation. you lose
| money using bitcoin to buy something.
| reedf1 wrote:
| Can confirm, had my lobotomy scheduled after the first
| time I was paid in btc.
| viro wrote:
| thank you, that was pretty funny.
| noch wrote:
| > yes, most people are invested in crypto because they
| wanna get rich with that 355% increase FULL STOP.
|
| Wanting to get rich is an excellent incentive for anyone.
| Most other incentives (e.g. altruism) quickly become
| perverse as they devolve into status-seeking or coercion
| through force or in subsidisation and centralised
| planning.
|
| In fact, without that desire to get rich (acquire
| resources), it's hard to imagine businesses being
| incentivised to provide value to the largest number of
| people in the most efficient way possible. The profit
| motive is the best incentive humans have encountered
| because, in a society that respects individual freedom
| and property rights, the profit motive forces us to
| innovate to provide others with value in order to receive
| value from them.
| allturtles wrote:
| But if acquiring currency and holding it causes you to
| get rich, that's a serious defect. That means it won't
| get spent which means the economy grinds to a halt and
| depression ensues. This is not a feature we want for a
| currency.
| grey-area wrote:
| Haven't you heard? It's not a currency any more so it
| doesn't need to be actually used. It's now an asset like
| no other, with zero use value but infinite exchange
| value.
| noch wrote:
| > if acquiring currency and holding it causes you to get
| rich, that's a serious defect. That means it won't get
| spent which means the economy grinds to a halt and
| depression ensues.
|
| I like you was severely brainwashed to believe that
| inflation and debasement of a currency is great! My
| father's friend worked at the IMF and would dismiss my
| notions of deflation as childish. I studied Finance and
| Mathematics and never once was your view of money
| seriously questioned.
|
| But it's a lie. In fact, if you think from first
| principles, you realise that saving, not spending, is the
| key to economic growth and individual prosperity.[0]
|
| Think about what you were saying: you're effectively
| claiming that money should be worthless, in which case,
| why bother trying to earn it? You want to work for and to
| be paid something valuable not something worthless which
| you want to throw away as soon as you get it. You want
| your money to be good enough to save. Saving allows us to
| defer present consumption for future benefits.
|
| The idea that people will never spend their bitcoin is
| absurd. Humans have needs that they can't get away from.
| They also have desires to indulge. They will buy stuff
| and at the same time they will be incentivised to be
| prudent if they adopt a Bitcoin Standard. We should want
| our communities to be prudent.
|
| [0]: https://mises.org/wire/saving-not-spending-engine-
| economic-g...
| allturtles wrote:
| I didn't say currency should be worthless. Obviously a
| worthless currency is... worthless. Saving for the future
| is great. There are lots of ways to save money sans BTC,
| holding currency just usually isn't one of them.
|
| I don't think bringing in "brainwashing" is helpful to
| discussion.
| esotericn wrote:
| Hi, I do, and that's why I use it.
|
| You don't need to :)
| grey-area wrote:
| I'm pleased somebody does use it for the intended purpose
| :)
| lottin wrote:
| > Determining fully decentralized consensus
|
| But this only solves a problem specific to bitcoin that no
| one else has, because no one else keeps a centralised
| database with every transaction, so I'm not sure it counts as
| an advantage.
| betterunix2 wrote:
| "fully decentralized consensus"
|
| Can someone define this term? Do we ignore P2P bootstrapping
| issues? Do we ignore the roll of IANA, RIRs, and other
| authorities that manage IP address and ASN assignments?
|
| Or perhaps more to the point, why would it not work to have a
| consortium of banks set up and operate a distributed public
| ledger (thus avoiding the energy-intensive "mining" process)?
| DennisP wrote:
| You don't even need a consortium to avoid the energy-
| intensive mining. Ethereum's beacon chain has been running
| a low-energy consensus process for months with no problems
| so far, and $5 billion in ETH participating, on about 100K
| nodes. They haven't migrated the legacy chain to it yet but
| that's coming in a year or so.
| ric2b wrote:
| > Do we ignore the roll of IANA, RIRs, and other
| authorities that manage IP address and ASN assignments?
|
| Yes, because Bitcoin doesn't have those issues. It follows
| the chain with the largest amount of PoW, it doesn't matter
| where it comes from.
| louwrentius wrote:
| Well, I think they aren't any good for anything. They seem to
| be a solution to a problem nobody has. [0]
|
| [0]: https://louwrentius.com/cryptocurrencies-are-detrimental-
| to-...
| mensetmanusman wrote:
| If tens of thousands of folks like yourself had mined and kept
| the coins, it wouldn't be nearly as valuable as it is today.
|
| It's a deflationary asset, meaning the less it gets used the
| more valuable it is.
| squarehorse wrote:
| How do you make that out? There would still be the same
| amount of bitcoin in circulation.
| minitoar wrote:
| I don't follow your logic here. How would more mining early
| on have impacted the Bitcoin price?
| golemotron wrote:
| Inflation-proof store of value.
| darkstar999 wrote:
| By trading inflation for volatility?
| betterunix2 wrote:
| Anything of value that is not the currency used in your
| country meets that definition, and most of those things do
| not consume vast amounts of electricity.
| mortehu wrote:
| Only a given bitcoin fork is inflation proof. Bitcoin itself
| is infinitely forkable, and if someone greatly improves the
| experience of creating and trading forks, we're at risk of
| inflation in a way fiat currencies are not.
| castlecrasher2 wrote:
| I'm in the same boat. The more I think about it the more it
| seems any cryptocurrency is essentially Monopoly money
| obfuscated by complexity.
| Rallerbabs wrote:
| Follow the big money.
|
| Michael Saylor from Microstrategies: $1B.
|
| Elon Musk from Tesla: $1.5B.
|
| GrayScale: not sure how many dollars, but they own >550,000
| bitcoins.
|
| Big money is of the opinion that bitcoin is an excellent store
| of value.
|
| Only a matter of time before it becomes a medium of exchange.
|
| And later on, a unit of account.
|
| By that time, you won't be asking yourself what 1 bitcoin is
| worth anymore.
|
| Things will be priced in bitcoin. And those who have it, have
| it good.
| NickM wrote:
| _Things will be priced in bitcoin._ You mean like how things
| are priced in gold now? Oh wait, we got off the gold standard
| specifically because of its high short-run volatility.
| Hmm....
| Rallerbabs wrote:
| Gold never even moved to medium of exchange. It couldn't.
|
| Bitcoin can. And then it can move on to unit of account.
| janvanbergen wrote:
| Bitcoin will never become a standard currency, it's slow, it
| has zero privacy (if I send you money once you can see ALL my
| transactions), it is EXTREMELY energy inefficient. Even if
| you believe crypto will one day become the standard (which I
| dont), it won't be bitcoin because there are better
| alternatives; proof of work is dumb, bitcoin has a finite
| supply of bitcoins, etc.
| mnx wrote:
| The finite supply is a feature, not a bug. I agree there
| are many aspects of bitcoin that suck, but not this one. We
| are right now witnessing many governments printing more and
| more money, which makes it less and less valuable. Bitcoin
| avoids that.
| Rallerbabs wrote:
| There is absolutely nothing about bitcoin that sucks. It
| is exactly what it needs to be: the world's hardest store
| of value.
|
| Every design decision comes with trade offs. All the
| right trade offs have been made. If you'd reinvent it
| from scratch, you'd end up with the exact same thing.
|
| The only thing about bitcoin that sucks, is that
| nocoiners don't have any. And they won't have any until
| it's $1M.
|
| Nobody wants to be the first. But everybody wants to be
| second.
| Grustaf wrote:
| Limited supply does not make things valuable per se.
| Rallerbabs wrote:
| It does if there's demand for it.
|
| And there's been growing demand for bitcoin for 12 years
| and counting.
|
| It's deflationary by design. But by all means, stick to
| your government money.
|
| Printer goes brrrrrrrrr.
| bccdee wrote:
| You realize deflation is bad, right? There's a reason why
| the central bank deliberately keeps inflation at a steady
| 2%. Slow, steady inflation is the ideal.
| Rallerbabs wrote:
| Store your value in fiat then, if you enjoy watching
| icecubes melt so much.
| bccdee wrote:
| Nah, I keep it in a mutual fund. That's the point of
| inflation -- spend or invest, but don't just sit on it.
| Rallerbabs wrote:
| I invested my inflationary fiat in deflationary bitcoin.
|
| I sit on it while it appreciates.
|
| Number go up.
| Grustaf wrote:
| The value of bitcoin increases because people speculate,
| not because the number of them is fixed. I bet there are
| hundreds of crypto currencies that have fixed or
| decreasing stock that keep losing value, or are already
| worthless.
| colinmhayes wrote:
| It's a shitty feaure advocated for by people who are
| proud of being ignorant. Fiat currency and monetary
| policy is largely responsible for the economic success of
| the last century.
| Rallerbabs wrote:
| There will be greater economic success in the current
| century, due to better money: bitcoin.
| totalZero wrote:
| Central banking does have some benefits. Printing money
| can make a currency more valuable if it reduces
| volatility, because that draws more participants into the
| currency.
|
| > The finite supply is a feature, not a bug.
|
| Finite supply means that a guy who mined a bunch of
| bitcoin in his dorm room in 2011 because the university
| gave him free electricity can move the price when he
| decides to sell.
| Ekaros wrote:
| Feature that can be changed. Specially if armies come to
| play... After all whole feature set is consensus of
| miners, not the users...
|
| State actors have good handle on violence. And then you
| better be on the same chain as they are, or it's jail
| time...
| Rallerbabs wrote:
| Features that can't be changed. Certainly not when armies
| come to play.
|
| You can change the bitcoin source code to have more coins
| and deal out half to yourself first. That's the easy
| part.
|
| But then comes the part where you have to convince the
| whole world that _your_ chain is the one, true bitcoin.
|
| Good luck with that.
| nprz wrote:
| Other comments in this thread are claiming bitcoin makes it
| much easier to launder money. So which is it? Zero privacy
| or increased privacy and anonymity?
| NickM wrote:
| Decreased privacy for everyday users. Increased privacy
| for those with the time, resources, and incentives to
| find ways to orchestrate transfers that can't be tied
| back to them. In other words, the worst of both worlds.
| nprz wrote:
| How come so few Silk Road market place vendors were
| arrested if it decreased privacy? Many people on the SR
| were just everyday users. I don't think the argument that
| it's a step down in privacy is valid at all.
| colinmhayes wrote:
| It's completely possible to remain anonymous with btc,
| but a big enough pain in the ass that only people who are
| committing crimes will do it. Everyone else will at some
| point link their identity to their wallet and all of
| their transaction and transaction amounts are then public
| record.
| nprz wrote:
| Yes, but the option is there. How does one protect their
| identity with a credit card transaction? The argument
| that BTC is not private doesn't seem to hold up.
| renewiltord wrote:
| I guess we could go through a challenge. You set up a
| Stripe page or some such thing and someone else can set
| up a BTC wallet. I will spend a dollar with my CC on your
| Stripe site and I will spend a dollar equivalent to that
| BTC wallet.
|
| Then I will make two other secret transactions with the
| CC and the BTC wallet. You can each then try to identify
| the targets and the sums spent in the secret
| transactions.
|
| Whoever identifies gets some sum of money from the other.
| I'm happy to escrow for you.
| beambot wrote:
| Let's be real: Everyday users just resort to credit
| cards, which have zero privacy. Only those with the time,
| resources, & incentives to transact away from credit
| cards get increased privacy.
| mdoms wrote:
| My CC statement is not on a public distributed ledger.
| nprz wrote:
| You are fooling yourself if you believe using a credit
| card affords you any kind of privacy.
|
| https://www.aclu.org/blog/privacy-technology/consumer-
| privac...
| mdoms wrote:
| My CC statement is not on a public distributed ledger.
| nprz wrote:
| Who cares? You have the option to completely anonymize
| your transactions with BTC, this option does not exist
| with credit cards, in fact you have no idea who is doing
| what with your data. If privacy is your concern, BTC is
| the superior option.
| bccdee wrote:
| If you want to launder money, you need to shuffle your
| cash through a dozen shady shells at a fee. If you want
| to just send people money, that's not anonymous at all.
| Rallerbabs wrote:
| These are all the same uninformed arguments that every
| newcomer thinks of. It's all incorrect, and if you'd want
| to learn correct info, then you'd be able to do so.
|
| It's important that you do it yourself. Because when I tell
| you it, it isn't going to land.
|
| Your ideologies don't matter. The world won't let you force
| them onto it. The reality of the situation, is that all the
| big money believes bitcoin has a large role to play in the
| future of the world economy.
|
| And this is true.
|
| Screenshot this. Message me in 2030. Let's reevaluate.
| scottLobster wrote:
| Big money can write it off as a business expense on their
| taxes if it goes down. The average individual doesn't have
| that upside.
| derwiki wrote:
| Why wouldn't an individual be able to claim a capital loss?
| [deleted]
| kingaillas wrote:
| Individuals can, but those are subject to a cap of $3000
| against income.
|
| I'm no tax expert but I think the point the OP was making
| is businesses have more options for writing off lossess -
| they can drum up other things to apply a loss towards.
| Thus, a business can effectively write off more of the
| loss than an individual can.
| Grustaf wrote:
| Unlike other investment decisions you mean?
| scottLobster wrote:
| My point is it's easier to gamble when you have corporate
| tax advantages.
|
| These are rich people/companies putting non-existential
| amounts of money into something new in the off chance it
| pays off. Best case scenario they get even richer, worse
| case scenario they pay a lot less in taxes. Either way
| their lifestyle/needs will be met and the business will
| continue.
|
| For the average individual: Best case scenario they get
| rich. Worst case scenario their investment goes to zero
| or close to it and they get a max 3k tax deduction on
| their taxable income. Their lifestyle/future savings
| could be greatly impacted by the loss, certainly far more
| than the businesses/rich people in question would suffer.
| Grustaf wrote:
| What I meant was, how is any of this an argument for
| investing specifically in Bitcoins?
|
| In any case, if a corporate makes an investment and loses
| the money, you are correct that this will lower the tax
| base and hence the total taxes paid, but that will of
| course only cover a small part of the loss.
|
| I don't know the tax implications for individuals in the
| US investing in stocks, but in Sweden there's not much
| difference if you're a company or an individual, you'll
| still be able to deduct losses.
|
| Finally, if a company invest a large part of their
| capital in Bitcoin and it goes to zero, that is just as
| catastrophic for the company as it would be for an
| individual, it just depends on how much of the "savings"
| were invested.
| k2enemy wrote:
| Follow the big money? The total "market value" of bitcoin is
| a rounding error in the global economy. Many individual
| companies have a larger market cap.
| Rallerbabs wrote:
| The total market cap of crypto is now larger than Google.
|
| Thanks for playing.
| peanut_worm wrote:
| Bitcoin has a market cap of something like 1 trillion
| dollars right now I would hardly call that a rounding error
| majewsky wrote:
| > Big money is of the opinion that bitcoin is an excellent
| store of value. Only a matter of time before it becomes a
| medium of exchange.
|
| By that same logic, I should be able to pay for my groceries
| with Apple stocks by now.
| Rallerbabs wrote:
| Nope. That's what a medium of exchange is for.
|
| Bitcoin isn't at that phase yet.
|
| For any new money, it goes like this:
|
| 1. Store of value. 2. Medium of exchange. 3. Unit of
| account.
|
| In that order. Cumulatively.
| JumpCrisscross wrote:
| > _For any new money, it goes like this: 1. Store of
| value. 2. Medium of exchange. 3. Unit of account._
|
| I'm struggling to think of a currency that started as a
| store of value _and then_ became a medium of exchange.
| Most currencies [1] started out worthless for good
| theoretical reasons. If they _started_ valuable, they'd
| be subject to Gresham's law and not transacted.
|
| [1] The U.S. dollar, pounds Sterling, the Euro, the Swiss
| franc, money in the free banking era, Song Dynasty
| jiaozi, _et cetera_
| Rallerbabs wrote:
| Read "The Bitcoin Standard" if you want that problem
| solved.
| Grustaf wrote:
| It's a fun book and it accurately describes some of the
| flaws with fiat money, at least as it is used now.
|
| But the part where it tries to explain why Bitcoin is the
| answer is laughable.
|
| Almost as laughable as the part where he blames every
| societal ill from the degeneration of art and onwards on
| fiat currencies.
| Rallerbabs wrote:
| No attempt at rational argument is made by you.
|
| Argument irrelevant.
| dang wrote:
| You've been breaking the site guidelines egregiously in
| this thread, and in other threads. We ban accounts that
| do that. Would you please review
| https://news.ycombinator.com/newsguidelines.html and
| stick to the rules when posting here?
|
| I'm not going to ban you right now because you've posted
| some good comments too, but if you keep posting comments
| like these ones we're going to have to. Please correct.
| wcoenen wrote:
| Bitcoin's usage as a medium of exchange appears to be
| decreasing, not increasing.
|
| If you look for graphs showing the growth of merchants
| accepting bitcoin over time, you'll notice they're all
| out of date. That's because at some point after 2016 it
| stopped growing and people lost interest in this metric.
| This happened when the block size limit was reached: the
| result was higher transaction fees and unpredictable
| confirmation times. In 2018 it got so bad there was
| basically a civil war in the community about it and
| bitcoin cash forked. Today the average transaction fee is
| $19.
|
| So I don't think we're on the path you envision. If
| bitcoin continues to be successful, I expect it will be
| used as an international settlement system by large
| corporations and financial institutions only.
| andreygrehov wrote:
| No, it's not the same. Bitcoin is like gold, which you also
| can't use to pay for groceries. A better example is if you
| were to physically mail bars of gold vs digitally sending
| Bitcoin.
| kybernetikos wrote:
| > Only a matter of time before it becomes a medium of
| exchange.
|
| It is impossible for BTC to become a medium of exchange
| without significant technical upgrades that the core
| developers have so far been hostile to.
|
| Although it was a goal of the original bitcoin project (and
| continues to be for BCH and others), it is not a goal of the
| BTC community and it is incredibly unlikely that it will ever
| happen.
| Rallerbabs wrote:
| Utter baloney. Lightning Network will deliver.
|
| As for BTC vs BCH... the market has spoken: BTC is the one,
| true bitcoin.
| kybernetikos wrote:
| Markets discover prices, not truth.
| Rallerbabs wrote:
| The truth is that BCH fanbois are REKT.
| kybernetikos wrote:
| > Follow the big money
|
| I worry that companies like PayPal are interested in btc
| precisely because they know it won't ever threaten them.
| meowface wrote:
| I wouldn't be shocked if one bitcoin is worth $1 million in
| ten years, but I would honestly be shocked if it were being
| used as a medium of exchange. I see it as less probable than
| people mailing gold bars back and forth to each other.
|
| I unironically think Dogecoin has a much higher chance than
| Bitcoin of being a legitimate and popular medium of exchange
| in the future, in part because the supply isn't capped.
|
| I think cryptocurrency may drive a lot of commerce in the
| coming decades as an actual payment mechanism rather than a
| speculative security, but, if so, I don't think it'll be
| Bitcoin that wins that race. I suspect the value will still
| be fluctuating frequently and violently in ten years.
| Rallerbabs wrote:
| Don't see how you can compare a virtual asset to a physical
| one and then somehow think the virtual asset is harder to
| manage then the physical one?
| siculars wrote:
| This is the classic trap of "failure of imagination". Failure
| of imagination can be fatal in that it obscures your vision of
| the future due to your own biases, perspective and lack of
| knowledge. It is critical for people to seek out knowledge they
| do not possess and perspectives they do not have.
| blhack wrote:
| Do you understand what the purpose of money is? It allows you
| to abstract your work into a (near) universally acceptable
| intermediary.
|
| For instance: I am _great_ at writing web APIs in golang, but
| unfortunately for me the people coming to my house today to
| deliver a dumpster (we 're doing some spring cleaning) do not
| accept "golang apis" as a method of payment.
|
| So I find somebody wants "golang APIs", agree to exchange with
| them for some money, and then use that money to pay the
| dumpster guys.
|
| Money is a _hugely_ innovative concept which has obviously
| driven a huge amount of innovation (now you can do work like
| "write golang APIs" instead of only doing things like "grow
| potatoes").
|
| Does that help you understand what the point of bitcoin is?
| anthonypasq wrote:
| what does this have to do with cryptocurrency?
|
| You already do that now. its called a job.
| blhack wrote:
| None of my customers pay me in potatoes, dumpsters, or iced
| coffee/chocolate chip scones. They pay my in _money_ ,
| which I then give to the person at the coffee shop and she
| gives me the coffee.
|
| And then the coffee shop people give that money to their
| landlord, the power company, the coffee bean people, and
| also their employees.
|
| ---
|
| It seems like such bad faith arguments to claim that
| bitcoin doesn't have a use. It has an _obvious_ use. HNers
| might not agree that it solves the problem it claims to
| solve, but if that 's what you think then _argue that_. Don
| 't pretend like you "don't understand" what the purpose is.
| anthonypasq wrote:
| yes thank you, im aware of how money is different than
| bartering. What does this have to do with cryptocurrency?
| blhack wrote:
| >crypto _currency_
|
| Bitcoin is a crypto CURRENCY. It IS money.
| jcranmer wrote:
| Bitcoin calls itself money, but that doesn't make it
| money any more than calling my cat currency would make it
| money.
|
| As far as governments have ruled in tax law, Bitcoin and
| other cryptocurrencies are not treated as foreign
| currency.
| darthrupert wrote:
| People use it as money, so it is money. If people used
| acorns as money, then acorns would be money.
|
| You don't need to complicate this further.
| dkarp wrote:
| This doesn't really answer why bitcoin though. Because we
| already have money that we've been using for a good long
| time.
|
| The problem is that money now is issued by governments.
| Governments are on average only governing one country,
| although sometimes more as with the Euro. In other words, it
| is not universal, so if you want to exchange some money for
| goods and services then you need to find the right money for
| the country the service is in.
|
| Globalisation means we often want goods and services from
| other countries. But then we always need to find the right
| money for that country or use some de facto universal money
| like USD. But then you're always exchanging money or letting
| the US government (who control USD) exert some control over
| you, even though you could be outside the US buying a
| good/service from a non-US entity.
|
| Bitcoin gives you a universal money. Once you have it, you
| can exchange it for goods or services without caring about
| where the recipient is. And you don't have to worry that
| you've now created a universal money that is controlled by
| one non-universal entity like the USA.
|
| At least that is the idea
| mattmanser wrote:
| No, because Bitcoin is not money, and if the only way you can
| talk about it is by referring to a different concept it's
| clear that you don't understand Bitcoin either.
| [deleted]
| moonbug wrote:
| Bitcoin needs to be exterminated.
| acd wrote:
| The economy does not account for the environment, that is what is
| wrong with the current economic system. Bitcoin did not fix that,
| but it fixes that there is no central bank other than miners.
| progforlyfe wrote:
| If I understand the system correctly, the vast majority of
| bitcoin energy consumption comes from the mining process, which
| is not strictly required (at least not anymore, with 18+ million
| BTC now mined and in circulation). I can spin up the bitcoin
| software on my home PC to participate in the network, sending and
| receiving bitcoin, and confirming some transactions, and the
| power consumed would be low. Much less than running a 4k graphics
| 3D game.
|
| Because of that, banning bitcoin ownership and trading seems to
| be overkill or missing the point... Just regulate/limit mining,
| or even better put a capacity on electricity usage or have tiers
| where the more you use, the more expensive it is, making mining
| not worth it after a certain point.
|
| All that said, government regulation will be extremely
| challenging here as it would require cooperation of nearly every
| country on Earth, and we've seen how difficult that is.
| nly wrote:
| No, the expensive mining process is required to build the block
| chain and prevent double spending. It is also used to determine
| who gets block rewards (transaction fees). Bitcoin will
| continue to consume more and more power forever
| celticninja wrote:
| You don't understand the system correctly. Mining bitcoins is
| also confirming transactions, which is the sending and
| receiving of bitcoins. Yes you could use your home PC but you
| would never find a block and so never confirm a transaction.
| rich_sasha wrote:
| Mining Bitcoin is a necessity if you want to transact, so you
| can't eliminate it. Basically, validating transactions is very
| costly, so people doing it get rewarded with "mined" bitcoin.
|
| If miners stop mining, you cannot transact in it, at least with
| the current "proof of work" approach. There are some
| alternatives, like proof of stake, but they are not mainstream
| yet.
| ruste wrote:
| The mining process is _how_ transactions are verified and
| recorded. Bitcoin doesn't work without it. Mining is a
| misnomer. You aren't finding bitcoin. It's a reward for solving
| a problem that proves you participated in helping record
| transactions for the network.
| nannal wrote:
| > Just regulate/limit mining, or even better put a capacity on
| electricity usage or have tiers where the more you use, the
| more expensive it is, making mining not worth it after a
| certain point.
|
| Isn't that the exact method used, electricity is metered, the
| more you use, the more expensive it is.
|
| Yes it drives up the price for everyone else because there's
| demand, but by that argument we would need to look at other
| energy intensive activities, like heating and driving, which
| feels like a step backwards.
| [deleted]
| mrkeen wrote:
| > Just regulate/limit mining
|
| It's designed to be unregulatable.
|
| It _already_ uses the model where you can decide not to mine if
| it will cost you too much electricity.
| Mc_Big_G wrote:
| Are the calculations for traditional finance energy consumption
| accurate? Do they account for all of the physical devices
| required? Credit card readers, POS systems, banks, offices,
| credit cards, mailers, etc... It all requires an immense amount
| of oil and other resources to keep that machine rolling.
| sub7 wrote:
| Can't wait for the (American/Chinese/Russian) secret 4000 qubit
| computer to make a mockery of that ledger and all the culty
| idiots who bought into it.
|
| There's a 0.9+ correlation between Tesla and BTC. If we're not
| near the end of the bubble, we're definitely not more than a few
| cycles away.
| MaheshC wrote:
| I like your ideas and username
| blondie9x wrote:
| Anyone who buys and takes part in mining this currency is taking
| part in the proliferation of climate change and the destruction
| of the planet. Until you can say all mining is done sustainably
| and all server production doesn't not use rare earth materials or
| cause significant e waste, mining and Bitcoin itself should be
| regulated. Period.
| brokencode wrote:
| Bitcoin is so fundamentally deficient that I am absolutely
| shocked by its continuing popularity. I've tried and tried to
| think of a legitimate purpose for it, but I'm confident that it
| doesn't have one.
|
| It is just too slow and inefficient to be used as a currency, and
| I can't understand why anybody would use something so volatile as
| a value storage mechanism similar to gold.
|
| Transactions provide extremely dubious privacy as well, and
| governments still control it to a large extent via the exchanges,
| since at the end of the day, you still need to convert it to cash
| for anything useful.
|
| Its only true use is for wild speculation and greed. It just
| makes me sick to think of the energy wasted by this when we are
| on the brink of climate catastrophe.
| anigbrowl wrote:
| While I largely agree, the existence of volatile instruments
| (in the abstract) is a Good Thing in that it offers the
| possibility of rapid gains for people who are willing to accept
| risk but only have a small pile of capital, sort of like a
| poker game with no minimum stake (unless you want to treat the
| transaction fees as such).
|
| Where else can you take those sort of risks? Stock fads like
| $GME are notable for their rarity because large capital holders
| benefit more from stability than volatility. You could gamble
| in a casino but people don't like betting against the house,
| which fills the role of a market maker. Volatile instruments
| like bitcoin are more like a casino where the dealer is paid a
| fee per hand but is not a participant in the game.
| perfunctory wrote:
| > are notable for their rarity
|
| If you consider that there are gazillion crypto currencies,
| bitcoin is a rarity among them. How is it different from
| stocks?
| tippytippytango wrote:
| Lots of people are paying for the energy the network uses right
| now and they thought it was worth it. You might have missed
| something in your thinking. Maybe go talk to some people that
| have used the network and ask why they though it was worth it
| to pay for all this energy.
| brokencode wrote:
| I know why, and I said as much in my original post. Bitcoin
| is purely for speculation at this point. It's a money making
| scheme. These people don't care about energy usage or
| transaction fees as long as they are getting incredible
| returns on their investment.
| keiferski wrote:
| Isn't this only a meaningful statistic when compared to the
| energy generated by current currency production and maintenance?
| Considering what the U.S. does to support the dollar, it's
| probably not even remotely a comparison.
| jude- wrote:
| There's lots of misdirected anger these last few days towards
| Bitcoin.
|
| First, the only thing that's energy-intensive about Bitcoin is
| block production. Making transactions, relaying them, validating
| them and storing them have negligible energy cost.
|
| Second, nothing about the Bitcoin protocol requires block
| production to use fossil fuels. Just like with _every other
| energy-intensive industry_ , the problem isn't the industry. The
| problem is the fossil fuel use.
|
| Therefore, if you want to get mad about the high energy use of
| block production leading to environmental pollution, you should
| direct that anger at the appropriate target: miners who use
| fossil fuels to mine.
|
| How do we fix this? The same way we fixed it in _every other
| energy-intensive industry_ : through taxes and regulation. Let's
| get some laws passed to _require_ miners in your area to use
| _only_ renewable energy, and to _require_ exchanges to impose a
| carbon tax on coins whose miners rely on fossil fuels to mine.
| Properly applied, these laws would make fossil-fuel mining
| unprofitable, which is exactly what we want.
|
| Bitcoin and PoW aren't going anywhere at this point. So let's
| make sure it's continued existence doesn't make the world worse.
| Sound good?
| simonebrunozzi wrote:
| I'm tired of this BS about Bitcoin and pollution. So tired that
| yesterday I wrote this [0]. Of course you might be in complete
| disagreement with me, but please read it and let me know what you
| think. Be kind. I am trying to have a good conversation about it,
| not to impose my view.
|
| [0]: https://simon.medium.com/bitcoin-and-pollution-the-
| definitiv...
| addicted wrote:
| You ask commenters to be kind and say you want to have a good
| conversation but start your comment by declaring the viewpoint
| you disagree with as BS.
|
| I would suggest that is not an effective way of starting a
| conversation.
| simonebrunozzi wrote:
| I should have explained the "BS" part at the beginning of my
| comment in a different way.
|
| I think that comparing Bitcoin energy consumption with a
| country (it used to be Chile, now Argentina), while
| technically correct, misses the big picture.
|
| I also avoided a discussion on the true cost of having a
| global currency like the US$, which one might argue pollutes
| far more (military, etc).
| JKCalhoun wrote:
| > I think that comparing Bitcoin energy consumption with a
| country (it used to be Chile, now Argentina), while
| technically correct, misses the big picture.
|
| I think a comparison like that actually _is_ the big
| picture.
|
| Maybe your arguments point though to more nuance.
| newsclues wrote:
| People don't want conversations about Bitcoin, they want to
| defend their financial positions.
| addicted wrote:
| In the spirit of actually answering your question, first
| let's just say that complaining about critics treating
| something named BitCOIN by its creators and something that
| has been promoted as an alternate currency from its creators
| to at least a decade of its supporters as a currency (Its the
| top cryptoCURRENCY) as currency is unfair to say the least.
|
| The whole shift of calling it a store of value as opposed to
| currency that Bitcoin supporters have started over the past
| couple of years is very clearly a post hoc justification for
| its existence.
|
| The problem, however, is that BTC isn't even a very good
| store of value. Golds pricing has never collapsed 10x over
| the matter of months and nor has it risen 5-10x over the
| matter of months. As a result BTC isn't even a very good
| store of value.
|
| It's currently, at best, a pure speculative asset. It's like
| the GME trading from a week ago taken to its logical extreme.
| A speculative asset that has no relationship to its
| underlying fundamentals. Much like how GME's price was
| completely divorced from any fundamentals of the company, BTC
| is like saying let's do that thing, but why even bother with
| tethering GME the stock to an underlying company. Let it just
| exist on its own.
|
| That's what BTC is at the moment. GME if GameStop didn't
| exist.
| Nursie wrote:
| It's not BS. The world in general is trying to find ways to be
| more energy efficient and up pops bitcoin, now using more power
| than a country of 44 million people. It's ridiculous.
|
| As is your reference on that article - "Most bitcoin mining is
| using energy at the source that was uneconomical to use for
| other purposes, because of the loss experienced in transporting
| the energy to economic centers", which just links to one of
| your own comments on HN!
|
| The rest appears to be handwaving - "Gold is worse!" or "It'll
| move to proof of stake!"
|
| (edit: the link to the comment is not the OPs own, but it is an
| HN comment which just contains an assertion about green energy
| use)
| purple_ferret wrote:
| >which just links to one of your own comments on HN!
|
| I found this bit hilarious. I guess he's banking on people
| not actually clicking the source links? Medium journalism at
| its finest.
| simonebrunozzi wrote:
| What I meant by "BS" is that most discussions about Bitcoin
| and its polluting effects are very superficial, and ignore
| some of the facts that I try to highlight in my post.
|
| > just links to one of your own comments on HN!
|
| No, the comment that I reference on HN is not mine, it's by
| someone else. BTW, I quite agree with it.
|
| > The rest appears to be handwaving
|
| I don't see why. We have used, and are still using, Gold as
| store of value. Each year gold pollutes tens of times more
| than Bitcoin. The ones criticizing Bitcoin should have been
| criticizing Gold all along; and they should criticize Gold
| way more than Bitcoin even now.
| Nursie wrote:
| > No, the comment that I reference on HN is not mine, it's
| by someone else. BTW, I quite agree with it.
|
| Ok, misread that. Either way it's just an HN comment, it's
| not proof of anything much. Gold mining is terribly
| polluting, yep, but your attitude to it is pretty much the
| definition of whataboutery.
| betterunix2 wrote:
| Mining gold is environmentally problematic, but no new gold
| needs to be mined when gold is transferred from one person
| to another. Bitcoin transactions require new blocks to be
| added to the block chain, and therefore more "mining" must
| take place.
|
| There is a bigger problem, however. If a gold miner finds a
| more energy-efficient mining process, they will use it
| because it is more profitable. No technological
| improvements make Bitcoin mining more energy efficient
| (miners are incentivized to expand their operation rather
| than to mine at the same rate using less power), because
| the whole point of Bitcoin mining is to prove that
| electricity was utilized. That means that there is no real
| solution to Bitcoin's pollution problem, other than
| scrapping Bitcoin entirely and replacing it with something
| more energy-efficient (like a distributed ledger operated
| by a consortium of banks).
| Biganon wrote:
| Bitcoin's energy consumption is a function of the number
| of miners, not the numbers of users. Just because more
| people transfer and use bitcoin doesn't mean more energy
| is used.
| betterunix2 wrote:
| Every transaction requires at least one block (typically
| several) to be added to the block chain, and the block
| size limit means that, in fact, energy consumption in
| Bitcoin is proportional to the number of transactions.
| Beyond technical details, there is also the economic
| incentive: miners are paid to include transactions in new
| blocks, and if there are more transactions (thus higher
| demand) the fee will rise and miners will consume more
| power in order to collect the higher fees.
| mikeyjk wrote:
| Transfers use energy, though
| afavour wrote:
| > No, the comment that I reference on HN is not mine, it's
| by someone else. BTW, I quite agree with it.
|
| I've seen this claim made a few times now: that most
| Bitcoin is mined using renewables, at source. Where's the
| actual evidence for it?
| sneak wrote:
| In general it isn't very profitable to mine bitcoin using
| power that isn't extremely discounted.
| afavour wrote:
| That is
|
| a) not the same as the original claim
|
| b) not evidence
| hobofan wrote:
| How do we determine how much/little energy usage is
| acceptable though? Is it okay for Google to use about as much
| energy as Tunisia? Maybe Bitcoin provides more economical
| value than Argentina? How much energy has and is being
| expended during the mining of all the gold that is just being
| used as store of value?
|
| (Mostly playing devil's advocate here. I would personally be
| for strong carbon taxes on electricity.)
| Nursie wrote:
| > How do we determine how much/little energy usage is
| acceptable though?
|
| Well, a purely electronic financial instrument that pretty
| much by definition cannot produce anything, and provides
| little but an arena for speculation, would seem to me to be
| a bad thing to introduce to a world that's trying to reduce
| energy use.
|
| If you want to get into "well people clearly value it", the
| evidence being the money they pump in, well then any energy
| expenditure is justified if it is profitable, and this
| conversation is pointless.
|
| > How much energy has and is being expended during the
| mining of all the gold
|
| This is just whataboutery. Gold can be a problem as well.
| tgb wrote:
| You'll have a hard time convincing people that Bitcoin is OK by
| comparing it gold since most people who think Bitcoin is
| wasteful would also think mining of gold is very wasteful.
| Moreover, I feel like you're making the mistake you highlight
| in your first paragraph: conflating 'mining' in gold with
| 'mining' in BTC. Bitcoin mining is necessary for transactions
| to occur, not so for gold. It's a very foggy comparison as far
| as I can tell.
|
| Your comparison to VISA links to a source that says that better
| comparison is Fedwire and that it only settles 1% of the money
| that FedWire does. So Bitcoin significantly loses to VISA in
| transaction count and FedWire in value settled. So I'm not
| convinced by your argument. And how much energy does Fedwire
| use? Presumably much less than VISA.
| FlownScepter wrote:
| It would be more apt to comparing the cost of transacting
| Bitcoin to that of _recycling_ gold instead of mining it,
| which is not zero, but is substantially less than mining and
| that 's where again, Bitcoin takes another lump. Recycled
| gold is useful; it's a precious metal obviously and one
| immune to most forms of oxidation, so once reclaimed, it can
| be used again in the next generation of smartphones and what
| have you.
|
| Gold is however undoubtedly a good comparison pick for
| Bitcoin; it's something with a few natural pros on it's side
| that's been hideously overvalued for largely irrational
| reasons. Like... this metal is advertised as the "right"
| basis to back currency but I also have some of it in nearly
| every gadget I own? Then how rare can it possibly be if a
| small amount comes in a $15 audio decoder for goodness
| sakes!?
| qznc wrote:
| I like it.
|
| Is Bitcoin mining comparable to gold mining? It should rather
| be compared to the logistics and trading of gold maybe?
| purple_ferret wrote:
| reads like another whataboutism article
| avaldeso wrote:
| >VISA handles $30B/day >Mastercard handles $11B/day >Bitcoin
| handles $10B/day
|
| Impressed. I didn't know Bitcoin transactions accounted for
| such huge volume almost as large as MasterCard. I use MC almost
| every day for almost everything. Is there people like, entirely
| living with BTC?
| mns wrote:
| I think it's more like I can create a currency, say that one
| myCoin is worth $5B, do 2 transactions of 1 myCoin and I can
| claim that I handle $10B/day.
| avaldeso wrote:
| Oh ok. So, this 10B are just people buying and selling BTC?
| It seems the author is fighting BS with more BS.
| jsjohnst wrote:
| Looking at the transaction amounts isn't very informative, as
| one is primarily used as a speculative asset, the other two
| are actual payment methods. A better comparison would be
| looking at daily trading volume on the stock market.
|
| To help put the difference more in scope, Visa and MasterCard
| each did over 100 billion payment transactions (nearly 300B
| combined) in 2019[0], yet Bitcoin still is over 3 orders of
| magnitude lower at around ~130 million (350k daily average x
| 365 days). The key distinction is the fact that the average
| Bitcoin transaction (currently ~$100k) is far higher than the
| average credit card transaction.
|
| [0] https://www.statista.com/statistics/261327/number-of-per-
| car...
| kaba0 wrote:
| What's your opinion on Corda? It has a different view on trust,
| than other cryptos (and it is not even crypto if we are being
| pedantic)
| simias wrote:
| If this trend continue we may well seal our fate by crunching
| useless numbers at a global scale for the sake of greed and
| because we seem incapable of trusting each other.
|
| If this was written in a novel we'd deem it a bit too much on the
| nose really.
| sparkie wrote:
| The greed is the chairs of central banks and the policymakers
| who are debasing other monies (some people benefit more than
| others from this).
|
| If they weren't debasing other people's hard earned value,
| there would be no need for bitcoin.
|
| But since they are, and are doing it at an increasing pace, the
| demand for bitcoin is inevitable.
| simias wrote:
| You'll have to explain to me how replacing inflationary
| currencies with a deflationary one makes any sense in that
| context. Inflationary currencies punish those hoarding money,
| deflationary currencies reward them.
|
| The idea that bitcoin is good for the less fortunate and bad
| for rich people is pure propaganda and not based on reality.
| It's going to make a bunch of early adopters very rich, and
| that's about it.
| minikites wrote:
| We've already destroyed the planet through greed (let's be
| real, we're not going to fix climate change). If you were a
| writer you would be writing history, not speculative fiction.
| sildur wrote:
| The sudden barrage of anti-bitcoin news looks slightly
| suspicious.
| axiosgunnar wrote:
| When arguing with a Bitcoin-fanatic, try this line:
|
| "Yeah I agree that cryptocurrencies are interesting, perhaps some
| day one will replace the USD. It will probably not be Bitcoin,
| but rather some other cryptocurrency".
|
| Watch how they recoil!
|
| For they have been found out, they do not actually care for
| financial freedom, etc., all these noble crypto goals which can
| also be achieved with a cryptocurrency that is not Bitcoin.
|
| All they care about is their speculative investment in Bitcoin in
| particular, so it won't help them much if another crypto becomes
| the world standard.
|
| It's probably <1% that are true believers and >99% that have
| missed out on a few bull runs and are now hoping to get rich
| quickly.
|
| Really, try this line some time and you will come to the same
| conclusion.
| CyberRabbi wrote:
| Political clickbait. Many global activities use more electricity
| than Argentina. Please ban
| blondie9x wrote:
| Climate change progress is being offset by the rise of harvesting
| digital currencies and the mining and production of parts that go
| into computers that power the harvesting and production of the
| currency.
| bennybitcoin wrote:
| Hi HackerNews, I don't typically post but seeing as this involves
| what I do daily, thought my input might be warranted.
|
| 1)Bitcoin mining by nature is a competitive game, people have
| flocked to cheapest power sources (unused hydro, solar, etc.)
| where the power costs are super low as that is the only recurring
| production cost.
|
| 2)There are no batteries that are power plant sized..... other
| than Bitcoin. Bitcoin allows opportunities for unused power to
| generate instant profit for the producers.
|
| 3)Because Bitcoin prices are currently soaring, it has opened up
| the profitability to mining in many areas with reasonably cheap
| power as essentially the global hashrate density can not catch up
| to adoption fast enough. In the long term, more and more
| efficient equipment will be manufactured and as the hashrate
| grows exponentially past the pace of mainstream adoption, the
| power usage again will need to be next to nothing to be
| competitive as the cost to produce 1 Bitcoin becomes harder and
| harder with increased competition and lower block rewards. *
| _Please understand that via Moore 's law continuance this is
| inevitable that hashrate will explode past the correlation to BTC
| prices due to more efficient chip technology increasing
| exponentially, and block rewards decreasing*
|
| 4)In the future, Bitcoin will only be mined in places where
| electricity is nearly free as the rewards ($/TH) will be shrunk
| to next to nothing. That is the end goal. We are at an asymmetric
| point at the moment where the mining is behind adoption. But just
| as the internet took time to be adopted, so will Bitcoin. But
| adoption curves must always end, and at the terminal equilibrium
| the incentives to only use waste energy for mining will be
| restored.
|
| 5)We are witnessing the birth of something A-M-A-Z-I-N-G that
| will completely change how banking and finance work on this
| planet forever. Of course there will be some growing pains along
| the way, but the future envisioned by Bitcoin is one of digital
| freedom, empowerment, and privacy. At the end of the day, you
| can't fight this tidal wave, all you can try to do is steer the
| technology towards your desired outcome.
|
| So it is written, so it shall be.
|
| All Hail Satoshi_
| Apofis wrote:
| So, where do we draw the line? At which percentage of all human
| electric output do we say, maybe there's something wrong with
| this picture? 1% total? 5% total? 20% total output? We're at
| 0.59% now. Of all electricity we generate as a species.
| cryptica wrote:
| Bitcoin helps to solve a massive problem (centralization) so I
| wouldn't say it's not worth it. That said, there are many PoS and
| DPoS cryptocurrencies to choose from which use almost no
| electricity and would actually help to decentralize the economy
| much better than Bitcoin could on its own.
|
| ...We can't achieve decentralization by pooling all of the
| world's money on a single asset. That makes no sense.
| werber wrote:
| I would love to see this done on a per country basis. Like x
| percent of y countries energy goes towards Bitcoin.
| inglor_cz wrote:
| Well, how much could you make selling Argentina?
|
| Would there even be a buyer?
| dosenbrot wrote:
| I like the fun-facts on this page: "The amount of electricity
| consumed every year by always-on but inactive home devices in the
| USA alone could power the Bitcoin network for 1.8 years" Where is
| the discussion about the smart home devices using that much
| energy? This is horrible, thats twice as the Bitcoin network and
| this is just the USA. I would really like if someone estimate the
| energy usage (with all trucks and cars and people and companies
| and buildings and so on) of other things than just whole
| countries, maybe the "normal" financial system, or plastic
| bottles or something everyone is using (like idle smart devices).
|
| I think most people missing the main point: Energy is to cheap.
| Most miners are in China, an they seem to pay nearly nothing for
| the energy (else they would'nt do it). This would mean they waste
| Energy on EVERYTHING, not only Bitcoin mining. In Germany I would
| never even think about mining Bitcoin, since I have to pay
| 0,35EUR per kWh. But if I would buy thousends of miners and waste
| 5MW of energy, I would have to pay roughtly 0,15EUR (maybe even
| just 0,05EUR). So wasting energy is profitable, is'nt this
| strange?
| positr0n wrote:
| I didn't have time to dig in to the sources but I wonder if
| that fun fact is still true. Back in the day your VCR and TV
| used to consume a large amount of power in standby. These days
| a device on standby consumes pennies of power a year. Of course
| there are a lot more electronics in the average home these
| days...
| ashtonkem wrote:
| I've been getting ads from my power company about "energy
| vampires" reminding me to turn off or unplug unwanted devices
| for decades. There is an outrage about that wasted power;
| you've just missed it.
|
| Oh, and we're getting more efficient about household energy
| usage every single day. Those always on lights used to be 60W
| incandescent bulbs, now they're 6-7W LEDs. The same cannot be
| said about the Bitcoin network, which is growing in energy
| consumption.
| bcheung wrote:
| Unless BTC changes to a "proof of stake" model like the majority
| of other new cryptocurrencies that are out there, it will see a
| large chunk of its marketshare replaced.
|
| There's already a big shift from BTC to more technically
| sophisticated solutions like Ethereum (ETH).
|
| tThe newest protocols like Cardano (ADA) and Polkadot (DOT) are
| even more efficient in terms of number of transactions that can
| be securely handled per second.
|
| Bitcoin also suffers from long wait times because you need to
| wait for the current block to be finalized. The sheer amount of
| electricity required just to confirm a transaction is not a
| viable long term solution for e-commerce.
| mudlus wrote:
| There's no energy index for the US military industrial complex,
| the entire US police force--but the primacy of fiat is based on
| the ability of an authority (for most of the world an
| authoritarian regime) to protect property through violent
| cohersion or violent force.
|
| Bitcoin changes that. How much energy is a non-violent property
| protection commons system worth to humanity?
| jqpabc123 wrote:
| Bitcoin is Crypto 1.0.
|
| There are better ways to do this. But people remain infatuated
| with Bitcoin.
| doomroot wrote:
| If something ever overtakes Bitcoin in the same way that
| Facebook overtook MySpace it'll disprove the entire Bitcoin
| thesis. Currencies have to be stable. I expect a winner take
| all scenario here and Bitcoin to be that winner.
| chrisco255 wrote:
| What "Bitcoin thesis"? Nakamoto had no such assertions in the
| original whitepaper that other cryptos would never outcompete
| Bitcoin.
| celticninja wrote:
| The only way to out compete bitcoin now is on features.
| Which if successful in an altcoin can easily be integrated
| into bitcoin.
| lawn wrote:
| Bitcoin couldn't even raise the blocksize. It's
| unimaginable that Bitcoin would ever include Monero's
| feature set which is magnitudes more disruptive.
| chrisco255 wrote:
| "if" successful? Ethereum has had smart contracts now on-
| chain for 5-6 years and they are producing new
| abstractions and value add to the crypto ecosystem like
| decentralized exchanges, derivatives, crypto
| collectibles, savings and loans, conditional execution
| logic of smart contract based on external data from
| oracles (for things like prediction markets, insurance,
| price feeds, etc), etc etc. Turing complete smart
| contracts on-chain are a game changing innovation and
| Bitcoin won't go near it. They have ossified the protocol
| around the digital gold paradigm while Ethereum is
| creating a whole new platform with distinct network
| effects and value add. There's no reason why Ethereum's
| market cap can't exceed Bitcoin's. You know, there's
| asset classes that exceed gold's market cap, after all.
| celticninja wrote:
| Ethereum is the most interesting altcoin I agree but it
| was always designed to be something sufficiently
| different to bitcoin, unlike most altcoins.
|
| However ethereums adoption is considerably below that of
| bitcoin, possibly because the use cases are so varied
| there is not one strong reason for involvement. There may
| be many minor reasons that small specific groups have an
| interest in it but that isn't sufficient for widespread
| adoption.
|
| The most important thing Ethereum is working on is PoS
| over PoW, and that technology, I expect, will transfer to
| bitcoin I'd Ethereum implements it successfully first
| mikeyjk wrote:
| 'easily' seems quite an assumption. It would depend on
| the change. Some changes would require giant rewrites.
| jiriknesl wrote:
| It is crypto 1.0. And it can be overtaken.
|
| The problem is (and I have been involved - most often
| unsuccessfully) that building anything in this ecosystem
| requires a lot of understanding of digital signatures,
| distributed system, economics, game theory, security & quality,
| trustless ecosystems, incentives, possibilities of players with
| big budgets (PoS - 51% bought by some government)/great
| developers (bots frontrunning hacking of ERC20
| contracts)/criminals (you have strong encryption, but still can
| be blackmailed/beaten).
|
| Bitcoin is one of a few currencies that deliver what it
| promises. It doesn't promise a lot, but what it promises, it
| does. Others promise a lot but underdeliver and later abandon
| it. At this moment, I think Bitcoin delivers 100% of what I
| expect from it. Monero is potentially better, but
| underdelivers. Ethereum is potentially better, but
| underdelivers. Others are either just copycats or completely
| fail.
| lawn wrote:
| Bitcoin only delivers 100% of its promises because the
| promises have changed.
|
| At first it was supposed to be peer-to-peer digital
| electronic cash. It was meant to both be money and a payment
| system to replace PayPal and the like.
|
| Now it's been reduced to just a store-of-value, and not even
| that, it's a speculation that the volatility will stabilize
| and that it will be a store-of-value in the future.
| modemuser wrote:
| The only fully functional crypto I know that could make
| Bitcoin obsolete is Nano. It does one thing, and does it
| well. Fast, feeless, green.
| codecamper wrote:
| In other words, Tesla just went carbon positive.
| jostmey wrote:
| Bitcoin's value is derived by the fact that an enormous amount of
| calculations (and therefore energy) are required to fake a
| transaction. But smart investors know that just because something
| is hard does not make something a worthwhile endeavor. We should
| always go after low-hanging fruit first, and cryptocurrency is
| not that. I gave up on Bitcoin almost 8 years ago and I haven't
| regretted it. It is not going to fix the world's financial
| problems and its going to further wreck the planet. As a father,
| I don't want any further part of it.
| insert_coin wrote:
| There is no problem, energy is "free", but still, the source of
| the electricity should always be a concern not just for bitcoin
| but for everything. Nuclear, solar, wind? good. Hydro, natural
| gas? less good but ok for now. Carbon, oil? we need to replace
| those plants asap.
|
| Bitcoin or anything really should be allowed to use however much
| energy it is economically feasible. The real question is, why is
| there no better use for that electricity than to compute numbers?
| How our economies became so stagnant the best return for capital
| investment is bitcoin?
| mrb wrote:
| That sounds very impressive, until you realize that Argentina
| uses slightly more energy than a _single_ hydroelectric power
| station like the Itaipu Dam (103 TWh /year).
|
| So comparing Bitcoin to Argentina really is more a testament how
| _little_ electricity Argentina uses. In people 's mind, a "single
| dam" sounds much, much less impressive than a "whole country".
| ucha wrote:
| As a store of value, bitcoin does not compare to fiat but to
| other forms of hard money such as gold. During Bretton-woods, the
| US dollar and other currencies were redeemable for gold and no
| one was saying that the US dollar was polluting the world because
| gold mining is polluting.
|
| Comparing the environmental impact of gold and bitcoin is an open
| question. Gold mining pollutes the world in ways bitcoin never
| will. It creates ocean waste [1], long-lasting mercury pollution
| [2] and more.
|
| As renewable become cheaper than fossil fuels, bitcoin will
| create additional demand for cheap renewable and accelerate the
| green transition. Because a mine could be moved essentially
| anywhere, it can be placed exactly where cheap renewable source
| of energy can be collected, thus maximizing the return on
| investment for renewable power plants, for example with
| geothermal in Iceland [3].
|
| [1] https://www.earthworks.org/blog/drawing-the-battle-lines-
| ove...
|
| [2] https://theconversation.com/gold-rush-mercury-legacy-
| small-s...
|
| [3] https://www.wired.com/story/iceland-bitcoin-mining-gallery/
| SiempreViernes wrote:
| Uh, there wasn't really _anyone_ talking about environment
| issues in the 1940 's, which is when the system was created,
| and global warming wasn't established as a firm concern until
| the 1980's by which time Bretton Woods was dead.
| jmiskovic wrote:
| I would agree with your first point, but increasing power
| consumption to accelerate green transition makes no sense to
| me.
|
| Green energy is a better solution to energy shortage, it's not
| something you'd want if there was no need for extra energy. The
| green energy industry captures financial investments, generates
| waste and contributes to global warming.
|
| To go ad absurdum, wouldn't increasing CO2 emissions also
| accelerate the green transition?
|
| Of course if Bitcoin can provide a substantial benefit world-
| wide then it's energy footprint can be deemed acceptable. I
| don't have enough experience with it to make such claim but I'm
| worried about increased fees and transaction times.
| friendzis wrote:
| > bitcoin will create additional demand for cheap renewable and
| accelerate the green transition
|
| Bitcoin does not create demand for renewable energy. Bitcoin
| only creates demand for energy. If bitcoin had significant
| demand for "cheap renewable energy", then we should have seen
| bitcoin mining operations concentrating in locations where
| renewable energy is abundant and land is pretty much useless
| for anything else. This has not happened in reality.
|
| Furthermore, even if we assume that bitcoin does put demand on
| renewable energy, since bitcoin mining does not replace other
| consumers, it is an _additional_ overall energy demand. As long
| as bitcoin energy consumption grows faster than new renewable
| installations it effectively runs on carbon.
| taftster wrote:
| The pressures for electricity demand has helped drive research
| and innovation in renewable energies. In some way, the quest for
| bitcoin has helped renewables get off the ground.
|
| I personally don't mind this extra demand on our electric
| production, as I believe it will help get us to a renewable
| energy sources even sooner.
| nathias wrote:
| Complaining about Bitcoin now uses more electricity than
| Lichtenstein
| fritzo wrote:
| Does gold coin use more gold than Argentina?
| DSingularity wrote:
| I wish people would acknowledge that we are still in the early
| stages of blockchain technology. When ethereum proof of stake
| arrives then you will arguably have the security of Bitcoin in a
| much more efficient blockchain.
| madacol wrote:
| They don't have the same security, for example, the
| immutability property is seriously weakened, you cannot verify
| it anymore, we could argue it becomes federated among the
| stakers
|
| But sure, most other things still seems to work (I'm not expert
| BTW)
| dang wrote:
| Submitted title was "Bitcoin now uses more electricity than
| Argentina". Please don't editorialize like that--it's against the
| site guidelines:
|
| " _Please use the original title, unless it is misleading or
| linkbait; don 't editorialize._"
|
| Cherry-picking a detail, especially a sensational detail, and
| making that the title, is the main way that people break this
| guideline, so please don't do that.
|
| If you want to say what you think is important about an article,
| please do so in the comments. Then your view will be on a level
| playing field with everyone else's:
| https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
| sbolt wrote:
| Does anyone know how much energy the global gold mining industry
| uses?
| choward wrote:
| Why does that matter? Nobody uses the gold standard anymore.
| sbolt wrote:
| Both gold and Bitcoin are stores of value with high
| production costs, Bitcoin gets a lot of heat for its
| electricity consumption but I haven't seen anyone ask the
| same for gold.
| [deleted]
| amelius wrote:
| Bitcoin also enables ransomware.
| doomjunky wrote:
| Cash also enables ransome.
| alfl wrote:
| Energy consumption doesn't cause emissions.
|
| Energy production causes emissions.
|
| Reducing consumption (by shaming it, in this case) means less
| investment in production, because there's less demand. This could
| slow the green energy transition.
| SiempreViernes wrote:
| Uh, less consumption also causes less production, maybe you
| missed that bit?
|
| And historically consumption has not lead to the green energy
| transition on its own, so it's a bit weird to assume it does it
| now.
| alfl wrote:
| I directly call that out: less consumption causes less
| production, so will reduce investment in production.
|
| If we're talking about emissions of bitcoin we're already
| talking about second and third order effects, so let's follow
| it all the way through.
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