It's worth comparing Bitcoin's proof of work to other schemes of maintaining currency value to understand this in a relative sense. The Military Industrial Complex which arguably is the mechanism by which the dollar maintains its position as the global reserve currency puts out 152MtCO2/yr [1].
Without making any judgement on if this ratio is reasonable: this is 3-5x more than BTC POW but arguably also contains other negative externalities like loss of life, etc.
I don't really know much about bitcoin and how mining scales with the number of trades, but there are only a few million Bitcoin users, meanwhile there are billions of USD holders/users each of whom have (I'd guess) significantly more average daily transactions.
That's something like 5 orders of magnitude more activity with USD vs BTC.
So for something that is used upwards of 100,000x more and only takes 5x more energy, that'd be a win for USD, no?
This of course is all disregarding my strong skepticism that the excesses of the US Military is a reasonable proxy for the strength of the US dollar.
Even if one accepts the theory of military power your argument puts forth, how is bitcoin any different? What part of reality prevents a better armed group from taking over bitcoin mines?
And for that matter, I don't accept the theory; it reeks of motivated reasoning to me.
That's quite an unbelievable leap. The USD infrastructure and it's energy needs is in no way dependent on reserve status. That's just grasping at straws.
The same plumbing handles a plethora of other, smaller currencies with many orders of magnitude better efficiency than BTC does (yeah yeah Lightning, off chain, blah blah).
I am so conflicted about the environmental impact of Proof-Of-Work. In many ways it feels like an arbitrary energy spend - but I think criticizing cryptocurrency for it seems a little disingenuous when we don't apply the same logic to other areas.
What's the environmental impact of better refresh rates on monitors? What's the environmental impact of large scale cctv systems? What's the environmental impact of western-style mattresses?
What’s the environmental impact of Zoom running away with my CPU? What about Chrome?
I’ve finally accepted that I have to switch to Firefox because of Chrome’s performance problems. Apple and Intel and thermals are a know problem, but Chrome is awful too. There seems to be some sort of problematic interaction between MacOS, Chrome, and Google’s software updater that triggers runaway CPU usage. See:
If there’s a flaw here that turns millions of computers into space heaters, what’s the impact?
Inefficiency is all around us. The Bitcoin inefficiency is by design and it’s a big part of why Bitcoin works. On the other hand, it feels like the paper clip game; eventually all matter in the universe will be converted into energy to mine Bitcoin.
A single bitcoin transaction (amortized) uses as much electricity as an entire house uses (on average) in more than 2 days.
This is like saying why should a massive agricultural project worry about saving water when your uncle Steve leaves the sink running while brushing his teeth. Or complaining about a splinter while impaled on a 2x4.
The scale of the inefficiency is so large as to be difficult to truly comprehend.
The per-transaction electricity measure is pretty flawed as the number of transactions per block is independent from the mining difficulty. Block size has already been increased twice (BIP 102 and then by SegWit), and can again in the future as number of bitcoin transactions scales up.
Over 75% of bitcoin miners are also now merge-mining (mining for other blockchains like RSK for example so this hash power secures not only BTC, but other currencies as well.
>A single bitcoin transaction (amortized) uses as much electricity as an entire house uses (on average) in more than 2 days.
That could be true, but how much energy does the finance world consumes through all the quantitative easings and other shenanigans? I doubt it's even possible to burn that worth of energy in electricity.
BTC replaces currency and currency transmission. It does not replace all financial systems or policy. If you just compare what BTC does, it does it like five orders of magnitude less efficiently.
quantitative easing -> Needed to ward off a recession as seen fit by most of the economists ...
Not saying it's efficient / needed, can't say anything for sure since I am a lowly dev and not a world class economist
This whole concept of bitcoin having value just because it's finite is asinine ... The whole world used gold standard and there was a reason the US and other nations got rid of it after WWI.
Comparing bitcoin's energy usage to traditional financial systems makes zero sense, mainly because traditional financial systems have a much bigger purpose.
I'll never buy any goods or services with my bitcoin because of the upside potential and I'll never accept payments in bitcoin because of the downside risk.
No other systems I know of are deliberately designed to continuously become less efficient.
That's why Bitcoin/PoW is in a different category to me: It's a Red Queen's Race where all the miners are incentivized to keep wasting more and more energy (for no greater benefit) or else risk that somebody else can execute a 51% attack.
Imagine if your email host needed to keep burning more and more energy, not to send any more emails, but because if they ever backed off, somebody else could steal your email address from you.
> or else risk that somebody else can execute a 51% attack
No, they aren't motivated by that. They are motivated purely by profit. If more miners start mining, the difficulty goes up, and therefore profit goes down. So they need to keep adding more machines. The price is driving this cycle too. The current hashrate & difficulty are at their ATH levels.
The bitcoin advocates like to pretend this is somehow about "securing the network" instead of pure greed, but it doesn't matter either way. Even if we take them at their word, the miners have to keep pouring in more and more energy or risk a 51% attack.
> No other systems I know of are deliberately designed to continuously become less efficient.
Well, there are - think of bcrypt :) It actually fits exactly the definition of design that deliberately becomes less efficient.
Ultimately it's a matter of the perceived cost/benefit - encryption is deemed necessary, so the benefits [perceived] offset the costs, while the cryptocurrencies' benefits don't (or do, depending on the opinion).
All the major industries are built on people consuming and buying more, from clothes to phones. They give power ratings for electronics themselves but that is for that one unit not how they expect you to keep buying more and more. We could ban tons of industries if we wanted to and life would go on, it's difficult to say what deserves the energy spent and what not.
Except they are not incentivised to expend more and more energy. The amount of energy expended is a direct correlation to how important bitcoin is.
You wouldn't criticize a government for spending millions keeping ita gold reserves safe, even though it can store them just as easily in a warehouse as it can in fort knox
How secure does the Bitcoin network need to be? What mechanism exists to determine that?
Rhetorical question, BTW. There is no market mechanism that determines what is sufficient security. This should become clear if one looks at what the network is choosing to pay the miners who secure transactions.
The block reward is now 12.6% of what it originally was, and tx fees have certainly not gone up correspondingly. So is the network now undersecured? Or was it previously overpaying for security? Again, rhetorical questions - the users of the network aren't paying for security, they're paying to have their transactions processed and have no choice but to subsidize the miners with the block reward as well. As far as how much security is needed goes, the Bitcoin answer is simply "more is more."
But in the future, as the block reward dwindles, won't market forces start to price in security? I'm sceptical, personally, because the only gauge of whether or not the network is paying its miners enough is whether or not the network works. So if, in the process of finding the proper price of security, the market goes too low, attacks will be possible and the price of BTC will likely suffer as a consequence. This would make it less attractive to mine BTC and less attractive to use BTC. You can see how this could lead to a downward spiral.
This is a very good point. At some point in the future the mining power will need to be paid majorly by the transaction fees. This depends a lot on how high the price can rise, but lets assume gold market cap. Then it would be maybe 3-4 halvings = 12-15 years until the share of block rewards in miners compensation will decline and the transaction fees have to compensate for it. In my view this is the biggest long term security and usability issue because transactions will probably cost hundreds to thousands of current day dollars assuming steady or slightly rising power usage = tech-innovation adjusted hash-rate.
Hundreds of dollars are too much for the average joe to regularly open and close lighting channels, so we might see some kind of centralisation.
The big question is if bitcoin can provide enough value as a international settlement backbone to fund the biggest pool of sha-mining hardware in the world. If an alternstive usecase for sha-miners comes up (be it blockchain related or not) that would also be a bigg security blow (but I don‘t see this on the horizon for now)
Answers to those questions are not yet known. The price competition between different cryptocurrencies should be the necessary market mechanism. Someone has to pay the price of mining, and if mining is not necessary, then it's not going to be paid. If it can be proven that the same security can be achieved with less mining, then either the Bitcoin protocol is updated, or a Bitcoin fork will become more valuable (and that fork will be named Bitcoin).
There are lots of cryptocurrencies which have infinite supply, which means that the mining rewards will keep the network running. For example Ethereum, Monero, Dogecoin and Grin. Bitcoin will rely on transaction costs, but it doesn't provide fully deterministic security as far as I know.
I don't quite see how price competition between cryptos is a mechanism that optimizes security spending, unless you mean that cryptos that fail security will crash and burn.
As for mining, it is necessary for reasons that have nothing to do with security. If you want to send a tx, you will pay a fee or perhaps hope for a kind miner to include your spend in a block. In no way are you signaling how much you think the Bitcoin network should spend on security.
This is a completely bogus analogy. Even if I accepted that bitcoin was analogous to gold (hint: it's not), the government secures Ft. Knox to whatever level of security it feels appropriate, and then it's done/maintained at that level.
It's not like Russia adds one more guard to their gold vault, the US has to keep pace or else if Russia has 51% more guards outside their vault, then by magic they can suddenly steal/double-spend gold.
Do bitcoin folks really not understand this, or are they all just pretending to be blind because they hope it will make them rich?
A country cannot hold a significant amount of cash/gold/value without spending the appropriate amount on military defence to deter other countries from seizing the value. The armed guards at Ft. Knox is a small amount of the total expense, the aircraft carriers also participate at least in part.
Perhaps it's more reasonable to compare the energy footprint of cryptocurrency with that of our traditional fiat currencies. Including all computing power used by banks to settle their transactions.
We could, and it ends up being much less. Probably less overall for the entire banking system, and most definitely less per transaction than the horror of bitcoin.
I've been unable to find any rigorous research on this, but even the pieces defending bitcoin claim that the banking system consumes maybe 5 or 10 times as much energy as the bitcoin network, while neglecting to mention that the traditional banking system handle hundreds of thousands of times more transactions per second than bitcoin (especially funny since the estimates include stuff like the AC costs of bank branches - obvious sophistry).
You can already do many things with crypto that you cannot do with the traditional banking system. Can you open 10,000 bank accounts right now? I can make 10k wallets.
There are so many new things we can do with crypto that it's going to take decades for people to discover them.
it is easy to test this you know. send yourself something when abroad or from foreign bank. at the same time send some bitcoin. see what arrives first or at all.
> I don't know what bubble you live in, but the opposite is true: you can't send bitcoins to anyone you want.
the opposite to "you can not send money to anyone you want with fiat" is "you can send money to anyone you want with fiat". which is false. hence initial statement is true. there is no bubble here.
thanks, I am a software engineer with 30 years of working experience, still find bitcoins the most obtuse way to send money, first of all because bitcoins are not money, secondly because 100% of those I would send money to don't know anything about bitcoins (why would they care?) and last but not least because it's easier and cheaper to convert money to gold and ship the gold (assuming I don't want to send real money)
buying prepaid credit is also an option, it works everywhere bitcoins work and it's free, immediate and it's money, directly spendable on goods and services
hell, even shipping banknotes in an envelope is better than sending bitcoins!
bitcoins are useless for this use case to anyone who really wants to send money to someone they care about
> "you can send money to anyone you want with fiat". which is false.
it's not.
I can send fiat money to anyone I want (emphasis on I)
but to prove me wrong you can send a couple bitcoins to my mom and I'll show you she doesn't know what to do with them.
if you're interested in proving me wrong, I can give you her wallet address.
in the end ask yourself this: why North Korea is disconnected from internet, but allows bitcoins?
are bitcoins really pro people and against oppressive regimes?
p.s. as much as I don't care about burn accounts, yours is actually really suspicious...
Bitcoin isn't a bank, it's a currency. You can't do that with the USD either, and you could build a banking platform on top of bitcoin to allow for chargebacks and credit lines.
The benefit of BTC is that when your bank mismanages their assets a la 2008, resulting in a bank run, you know your assets are safe instead of having to rely on the Fed to bail out your bank. Your money is in your control, not in the control of someone else.
If you don't want that, it's easy -- just don't buy bitcoin. But don't discredit it by comparing it to a credit card which it is not trying to be. The strawman is disingenuous and shows how little you understand the topic.
> Bitcoin isn't a bank, it's a currency. You can't do that with the USD either, and you could build a banking platform on top of bitcoin to allow for chargebacks and credit lines.
The point is when we're looking at comparative energy use, you can't just point at the whole banking system and compare it to Bitcoin, as if it's an apples to apples comparison, because the banking system provides an embarassment of services that Bitcoin does not.
> The strawman is disingenuous and shows how little you understand the topic.
There's no strawman here and if anything this shows how little you understood the thread you're replying to.
People often critique btc by saying that it is slowly re-creating the existing banking system. That's largely true, but what makes it interesting is what this re-creation is built on top of. Or perhaps: what it's _not_ built on top of. Nic Carter does a nice job of discussing this [1].
For the record, I'm not trying to defend BTC's energy footprint. It's a black-eye on the tech and a problem that needs to be solved. Proof-of-stake over proof-of-work is an interesting solution, and part of the reason I hold a lot more ETH than BTC. That's why I'm so interested by cryptos though -- BTC just opened the door and the derivatives are where the real innovation will happen in my opinion.
> The point is when we're looking at comparative energy use, you can't just point at the whole banking system and compare it to Bitcoin, as if it's an apples to apples comparison, because the banking system provides an embarassment of services that Bitcoin does not.
this is true. bitcoin should be compared with everything required to run or "back" USD. which is a lot more energy use than most states on this planet
> The benefit of BTC is that when your bank mismanages their assets a la 2008, resulting in a bank run, you know your assets are safe instead of having to rely on the Fed to bail out your bank. Your money is in your control, not in the control of someone else.
I don't think that's true. Most companies providing services on top of bitcoin control the private keys, so they could do the same thing. You give up absolute control of your money to get access to a service, except now creating the money is terrible for the environment and consumes as much power as a small European nation.
> The number of times such an activity would be useful to me is zero.
You say that now, but it's the kind of innovation that will require some time to develop use-cases. I use it as an example of where crypto is just a lot more powerful than traditional banking. There's the ability to scale without "permission". Think a 12 year old opening an "account".
> However calling my bank and having cash recalled from fraudulent (or even just bankrupt) merchants, that's happened. Who do I call at Bitcoin?
Escrow accounts and merchant layers are in development. There's a lot of interesting DeFi (decentralized finance) services being developed on Ethereum.
>Escrow accounts and merchant layers are in development
Right, so that means that Bitcoin is not providing many of the services the financial system provides now, so comparing its energy footprint to the existing financial system is pointless.
That's the point I was making. You can't say "Bitcoin uses X electricity and Finance uses Y, which is bigger, and so is worse" when Bitcoin doesn't provide the same services or service the same size of audience as existing financial systems do.
I actually agree with you that they're apples and oranges. But I also think it doesn't make any sense to complain about Bitcoin's energy usage as I see it as well worth the investment.
Needless to say, I think that in a world where we are trying to become (as a general rule) more power-efficient in order to combat CO2 emissions, that's not the case. Adding whole new countries-worth of power use just for some new financial geekery really doesn't seem worth it.
But I'm glad we agree the comparison with the existing system is a silly one.
It's not just financial geekery, it's a complete re-configuring of our society including the dissolution of the state. Combating the eco destruction wrought by entities like the US government is a big piece of the puzzle.
If you need to do this, you can do it through the group at your bank called treasury services (or something like that). They have APIs for financial services customers and CFOs who need to do this sort of thing.
I imagine I'd have to give the bank much more money or information than I already have to get this business service. At the very least, it would take time.
There is a difference between not being able to and not knowing how to. You can. There are no-minimum balance API banking interfaces. There just isn’t a common enough use case for them to be heavily advertised.
We can move the goalpost again to an open API, but that’s another thing once more.
> Can you open 10k accounts right now? I'm sure you can't.
Yes, easily.
It would take a phone call, since I haven’t set up the rails to do this. But “I need ten thousand sequentially numbered checking accounts with wire privileges” is a perfectly fine (if odd for an individual customer) request. (Almost any process requiring that many accounts is being done wrong.)
Granted, I have a private banker. But there are services who provide this to e.g. fintech companies setting up and destroying single-use accounts on the fly.
Can you go to the middle of Cambodia (Tonle Sap) where there's no electricity and buy fish with bitcoin? You can't.... and my use case is a lot more realistic than yours.
If you say you might be able to in a few years, then I can argue you might be able to open up as many accounts as you want at that time.
Please don’t downvote this guy, or the other crypto proponents, when they try to explain why they support it. I think the idea here is to have open debates with them, not run them out of town.
I doubt that it's enough to care about. The hardware is specialized and the needs are different from normal servers. Bitcoin miners care almost exclusively about cheap electricity, not uptime or latency or bandwidth or interconnect.
Some Bitcoin-related stuff is running in datacenters, no doubt, but it's a rounding error compared to the rest.
First of all, countries secure energy because people want energy. Even in a world where we use Bitcoin, people are still going to want HVAC, cars, cell phones, and all the other things that we use/buy that consume energy and damage the environment. The idea that a country will magically stop wanting oil because it's using Bitcoin is just laughable.
Second, Bitcoin uses a ton of energy by design. It's literally built to create a competition between miners for hashing power in order to prevent 51% attacks. This structure is why increased hashing efficiency hasn't reduced Bitcoin's energy usage, it only results in spending the same amount of electricity on new hardware rather than old. A country that runs on Bitcoin will need a bit more energy as a fiat country, because maintaining sufficient hashing power will suddenly become a strategic problem. Up until today the risk of a 51% attack on Bitcoin is a private concern; only the miners and those involved in Bitcoin are concerned about it. But if a country used BTC as its main currency, suddenly that is a strategic problem. Does anyone honestly think that the USA wouldn't use its military to secure oil in order to hedge off a 51% attack on its entire financial system? Honestly, it would be dereliction of duty to not do that, given that scenario.
You have the cause and effect reversed. One of the reasons I want to move from USD to crypto is because I don't want to invade countries for their oil. I'd rather my currency not be tied to imperialistic warmongering.
One of the more confusing things about crypto is how many magical wishes get attached to it. It’s never actually explained why crypto will magically solve the problems listed, merely asserted that it would be so. There’s no reason that Bitcoin would magically eliminate the need for armies and oil consumption, at best it might change who has the armies, but not their presence.
The funny thing is that we know that neither fiat currency nor oil is necessary for empire building or warmongering, because both fiat currencies and large scale oil consumption came out after the greatest period of imperialism and colony building that humanity has ever seen. The idea that replacing something that’s been around for ~50 years will solve a Millenia long problem of humanity’s is just funny.
> The idea that replacing something that’s been around for ~50 years will solve a Millenia long problem of humanity’s is just funny.
Is it? Communicating over distance was a problem we've had for millenia (or much longer) and it's now solved. Technology is amazing and we hit an inflection point last century. We're essentially already living in a post-humanity world, and crypto is the currency to match.
> Is it? Communicating over distance was a problem we've had for millenia (or much longer) and it's now solved.
There's a reason why I say that bitcoin fans participate in magical thinking, and this is a prime example. So the argument goes that because we've solved communication, bitcoin is supposed to solve war ... how again? There's not even a fig leaf of an argument here, only a blunt assertion that because we've solved other problems, therefore your preferred technology will solve other issues.
Maybe one day we'll solve war. But the burden of proof is on you to argue that your specific thing will solve that issue. And you're not even really trying.
> We're essentially already living in a post-humanity world, and crypto is the currency to match.
Lol, what? This is the intro to a cyberpunk novel, not an actual argument with testable claims. What the heck does "post-humanity" even freaking mean? As an actual human being living in this society, I'd argue that any claims that I'm "post" are objectively wrong.
This is always the issue with any sort of enthusiast; your enthusiasm does not scale. Just because you're really excited about a thing doesn't mean that anyone else will be; you have to actually find things that other people want and connect your interest to them persuasively (blunt assertions don't really work). "We're already living in a post-humanity world, and crypto is the currency to match" is the kind of thing that'll get you plaudits on crypto sub-forums, and worried looks from everyone else who has no <explicative deleted> idea what you're going on about.
Warmongering has next to nothing to do with currency.
If anything, limited supplies of anything, including bitcoin, are a likely to spark wars, not end them.
If you truly wish to help stop wars, join a peace-loving organization, attend marches, lobby politicians. You'll find all of the real work on this are in leftist organizations, which fight against the real foundations of war, such as inequality, ideas of exceptionalism, corporate greed and others. Fiat currency is well down on the list of the world's problems.
> Warmongering has next to nothing to do with currency.
Arguably currency is a consequence of wars, as are markets[0]. Markets and currency (fiat & hard specie) are usually the consequence of states needing to raise armies, equip and pay for armies, and do something with the tribute collected from vanquished foes. Small scale agriculture can work on either physical barter or interpersonal debt systems, it's only when you need to equip and train men to fight full time that you need actual coinage and markets to produce arms for them and do something with whatever they seized abroad.
Assuming that one accepts this, this is actually a pretty big problem for the "bitcoin will stop wars" crowd, as arguably currencies are a consequence of wars and not vice-versa. If one wants to stop wars, one has to tackle the root causes, not the side-effects.
Furthermore, it's also clear that it's possible to organize and fund wars on the back of several different types of currency. We've seen wars funded with hard specie (early Roman Republic/empire), diluted hard specie (late Roman Empire), wheat backed coin (Sumaria), lead (Sparta), paper notes backed by land (French directory), gold backed paper (America pre-1971), fiat (everyone nowadays), and probably more still. There's really no clear reason why one couldn't use a cryptocurrency to organize and fund a war.
Heck, if they actually worked it would probably make modern wars a bit easier. Modern conflict often involves the funding of proxy groups with a variety of openness and plausible deniability. This usually requires the actual transit of physical money, which is dangerous and expensive. The ability to just digitally wire a bunch of currency to your proxies without the need to fly pallets of money and gold to your proxy fighters would simplify things significantly for current world powers. The ultra-private currencies would be a pretty good way to send money to terrorist and rebel groups you don't want to be seen visible funding too.
0 - For more on this see David Graeber's Debt, the First 5000 Years.
Oh yes, ~400 years ago many things worked differently. In particular, currencies were less tied with states than they are today, leading to many kinds of financial manipulations that no longer happen, at least outside open conflict zones.
If the US government wanted to go to war, was lacking money for this, and for some reason didn't want to seize the entire bitcoin network (which it could pretty easily do, make no mistake), it could simply issue its own cryptocoin, just like in 1652. And people will buy it, because they know the US is good for it, for the same reason that dollars don't particularly devalue even if you print another hundred billion of them today.
It's important to understand that you can't fight social problems with technical solutions. The disgusting amounts of power that big states have make it impossible to oppose them with fun projects like bitcoin. If you are truly serious about combatting US imperialism, try reading some Noam Chomsky - that is a man that has spent his life fighting against these things, but also understanding the levers of power.
Financial games are in the end games; they may seem important because it is where the rich spend their time, but if push comes to shove and the system is threatened, the game is quickly stopped and any necessary controls is asserted. Just look at what happened with the GME stock (and we haven't even seen the end of that). Make no mistake, if BTC ever becomes a real threat to any monetary system, you will see much worse than that.
This can only be combatted in the arena of politics and democratic control, by changing the rules, not playing the game.
1. It's not trivial, but it's certainly not impossible for the US government.
2. I don't understand how fiat is a technological problem. Fiat was a solution to the problem of a fixed supply (gold-pegged) currency. Crypto is generally a step back.
3. The value of bitcoin is irrelevant to its impact on global financial systems. It can handle 7 transactions per second, while consuming more power than the Czech Republic. That people are willing to bet good money on it for now is does not mean that is should be taken seriously as an alternative to anything in the financial system.
4. Interesting, I honestly expected from your arguments that you were more in the area of a more-socially-conscious-than-average Rand Paul fan, glad to hear I was wrong.
1. I don't agree, it's also a great justification for why BTC uses so much power: to protect takeover from things like the US government.
2. Fiat is a technological solution, as is Bitcoin. Really though, the dichotomy between "social" and "tech" solutions is false. Technology and society are one and the same.
3. BTC has moved billions of dollars into crypto. That crypto can be pegged in smart contracts on more appropriate tech stacks (like ETH) to enable currency use-cases with alt coins. It's early days here, but very exciting.
4. There's not many leftist libertarians but it is an actual philosophy. Individual liberty + social and humanitarian thinking + acknowledgement of the role racism and exploitation has had in today's power structures. I believe in radical decentralization and leveraging technology and automation to make life better for all.
1. To be clear, I'm not thinking of a 51% attack, I'm thinking of cyberattacks on the miners and exchanges, mining equipment seizures, international warrants etc.
2. I was wrong in my explanation, you're right that fiat is a (social/financial) technology and in principle crypto could be an alternative. What I was thinking of initially is that the problems of the finance system are social, not technological: the incentives in the current system (the rich keeping their richness at the expense of everyone else) are a social problem, which can't be fixed with technology. As long as the rich stay rich and powerful, they will control crypto just as well as they controlled gold and fiat before it.
3. ETH can do, what, 24 TPS? Right now there is no coin that can realistically compete with the global banking system, especially on the last mile. And I don't think PoW or PoSpace will ever get there. And PoStake doesn't seem like it has any real advantages over a trusted distributed DB, to be honest.
4. Those are quite noble goals. Probably a major difference of belief between us is that I don't believe any change towards decentralization can come from (computer) technology, I believe it must be a social movement with democratic power that moves things first and foremost - any kind of purely technological solution will easily be co-opted by the rich and powerful. In this way, crypto should look at what happened with the Internet itself, as Google and Facebook and others slowly absorbed it.
This take is like reacting to the Ford Model T by saying how much energy it uses, how you can't access fuel to put in it, etc. BTC isn't the end-all crypto solution. It's the first attempt. It will continue to evolve and mature into something better like a Ford Fiat you can buy today.
I don't really care about the USA, and I want to be in control of my own money. Maybe from your perspective of being able to control the citizens of a country, USD is better. But from my perspective of protecting my own interests, BTC is a compelling solution.
People wouldn't stop spending money on weapons in a Bitcoin world. If the global economy is dominated by a small number of people who got in on Bitcoin early, against a vast majority who are born with no Bitcoin and no way to get it except from those who already have it, strife can be expected.
To the extent that inequality, competition, and unfairness create tension, that tension doesn't go away just because there's a different set of people at the top.
How many people would use Bitcoin in this scenario? I reckon so few as to render it worthless. Ergo, Bitcoin requires the same expensive infrastructure as our fiat banking.
Yay I can't wait for a trip to the grocery store to take 12 hours because every transaction takes 20 minutes. lol. This is just pure bitcoin hype, there are far better coins to use if you are actually interested in them as currency.
I see a lot of whataboutism when debating crypto currency issues. We assess the env impact of everything you just listed - monitors and cctv have energy ratings, and if you google for eco friendly mattresses you will see there is a lot going on in that area as well. So, really, whats the issue with making sure cryptos are energy efficient?
Worth mentioning the cryptocurrency that Bram Cohen (inventor of bittorrent) is creating that is explicitly designed to be low-energy usage and more distributed: https://www.chia.net/
It uses "Proof of Space" (proof that you're allocating a certain amount of storage space) instead of Proof of Work or Proof of Stake. Pretty interesting and they're coming out of beta into their mainnet in the next few weeks. Their on-chain programming language is even Lisp-based!
Persistent storage doesn't have to be powered on all the time, though, which makes the environmental impact a known thing. Factor in the cost of building + populating the drives along with having to replace them periodically and you know the cost of that storage. In comparison, PoW's future cost can skyrocket as the network expands and the difficulty goes up.
Storing the whole chain takes a bunch of space anyway, so you have a similar storage problem there too.
If you want to see how cheap persistent storage can get, look up the cost of Amazon Glacier. It's shockingly cheap - $0.005 per GB or even less.
Right, but ultimately the same is true for manufacturing GPUs and ASICs. It's a problem you have to deal with for both PoW and this new proposed approach.
How can they not be better if they remove the need to burn a bunch of power 24/7 and produce waste heat? It's replacing an ongoing cost with a fixed one. In both cases you need a hardware investment (PoW mining hardware for one, persistent storage for the other) but the proof of work system ALSO has a large ongoing energy cost in addition to hardware.
GPUs or ASICs for hashing are going to have a limited life span just like your storage hardware, too.
I was looking into their whitepaper trying to find a counter argument to this. My conclusion is basically this:
The probability of being awarded a transaction is proportional to your reserved space 'plot' compared to the globally reserved space.
Assuming it takes off, and enough 'overprovisioned' storage has been added to the pool, then it makes little sense to buy hardware just to farm storage-coins. The tiny increase in probability just wouldn't pay off.
The main cost of hard drives is intellectual property (ie. Paying for the R&D, patents and licenses for all the tech inside).
It isn't clear that "wasting" intellectual property is in any way bad for the wider economy. In fact, it probably just subsidies storage for the rest of us in the long term.
This doesn't sound right, it's very doubtful that all storage tech has royalty (unit-based) license terms.
Instead of electricity consumption the limiting factor will be raw materials to manufacture storage. Likely even worse for the environment given the energy and raw material cost to manufacture storage devices.
I was more thinking of the waste involved in manufacturing. If there's suddenly a much more direct profit motive to buying drives it's going to push more manufacturing, which is not the same as ongoing burning of energy for PoW, sure, but it's not going to be without side effects.
I mined BURST for a while, another PoS coin. It's been around for 7 years, works great, and solves the PoW power problem. It's got a lot of functionality built in for the nodes, like messaging and marketplace functions.
And nobody cares. If I had to guess, I'd say the attractiveness of mining the PoW coins is that it's very expensive, but accordingly very rewarding.
When the coins are cheap and easy to secure as a node, people seem to not be as interested, which means the coin doesn't get used.
Chia, Sia, Filecoin all are trying to do similar, but have added in a "distributed Dropbox". There are some interesting challenges there, like quintuple redundancy and having your files stored across multiple nodes in shards for privacy. But in the end, they seem to suffer from the same issue as BURST: their feature set struggles to create popularity because they're not Bitcoin.
Isn't that riddled with the same problems ultimately?
You set up a system, which inherently ensures a certain resource will remain/become scarce (...for all of humanity), or fail. That's just super counter-productive for human prosperity...
main issue OP and other "I have a version of bitcoin that doesn't uses less energy/faster/cheaper etc." people have is that these existed before bitcoin and didn't work. They were shut down/coerced/coopted. Bitcoin ensures decentralization and finality via PoW.
This new coin will take its place under bitcoin amongst 3000+ abandoned and newly released ones.
Cryptocurrency is still something that legacy financial systems could easily out-compete given an appropriate regulatory environment.
There are things Bitcoin is better at than e.g. credit cards. If you're a trusted merchant with shady customers, once the transaction posts you don't have to worry about scammers fraudulently disputing the charge or your bank cutting you off because that happened too often. You can get Bitcoin under a pseudonym and use it to buy something (e.g. banned or controversial books, VPN for dissidents) that you don't want tied to your meatspace identity. Things like that.
None of this would be impossible to do with ordinary financial systems except that existing regulations prohibit it. But if anybody can do it with Bitcoin regardless then there is no point in that and you might as well allow it in general. At which point, why are we burning all this energy on Bitcoin?
> If you're a trusted merchant with shady customers, once the transaction posts you don't have to worry about scammers fraudulently disputing the charge or your bank cutting you off because that happened too often.
If you're a scammer merchant, ripping off good-faith customers you also don't have to worry about chargebacks. Bitcoin moves power from the consumer to the merchant. I don't see that as a net positive.
Then don't pay scammer merchants with payment methods that don't have chargebacks. That's no reason not to do it when you're confident that you can trust the merchant and the merchant has legitimate reasons to expect that some of their customers are unreliable.
It's a common problem for adult products that the buyer's spouse sees the charge on the credit card statement, the buyer claims not to know anything about it and the spouse disputes the charge even though the merchant did nothing wrong.
Even legit vbendors screw up, or go bankrupt, or any number of other things.
Chargeback and other consumer credit-card protections are very useful. Regulations don't prohibit irreversible transaction mechanisms, basically nobody wants them.
Please don't just make stuff up. Point me to the credit card I can get which doesn't allow for chargebacks. I want to use it to buy things from people I trust who don't trust me, because that is an actually useful thing that some people have a legitimate reason to do.
> I want to use it to buy things from people I trust who don't trust me
1. That makes you sound actually crazy.
2. I didn't say you could get a credit card that doesn't allow chargebacks, I said the regulations don't prohibit payment mechanisms without chargebacks. See for example cashiers cheques and bank transfers. There's a reason people avoid them, and a reason popular payment methods support them.
I don't see why this is so difficult to understand.
You have a merchant with a sterling reputation. I'm a customer. They don't know me from Adam, but they know that a lot of their customers are unreliable. Suppose the product is bespoke or controversial, so they have a lot of problems with people placing an order and then backing out and refusing to pay after the work is already done or the product is already delivered.
In a system with chargebacks, they have to eat the cost of that and pass it on to the honest customers. In a system without it, the people violating their agreement and backing out can't get their money back, and then honest customers like me don't have to pay more to cover them. So I'm willing to commit to trusting the merchant in exchange for not having to pay more. In this case forced reversibility is a cost to me, the customer.
> See for example cashiers cheques and bank transfers.
In other words, things that are de facto prohibited through inconvenience or risk. Like a website is going to get any customers if they have to drive to the bank and then mail a cashier's check. And disclosing your bank routing number would allow the merchant to withdraw more than agreed -- you then have to trust them with not the $20 purchase you're making (an acceptable risk) but the full balance of your account (not so much).
Notice that the convenient equivalent to this that might actually be usable, i.e. debit cards, is back to having chargebacks.
I'm sorry but the history of world has shown over and over again that merchants are the side of the equation that needs to be regulated and kept in check. Saying "I want no protections" marks you out as weird and historically somewhat illiterate.
For your contrived example, a bank transfer would work just fine, and can be done online in seconds. Good luck if the 'trusted' merchant decides to cash in their 'trusted' reputation by taking a lot of people's cash and skipping town, or if their business just plain goes under before you can get your items, though.
> In other words, things that are de facto prohibited through inconvenience or risk.
This is not the same as prohibited.
> And disclosing your bank routing number would allow the merchant to withdraw more than agree
Why would you be exposing anything? Sending a bank transfer doesn't allow anyone to withdraw anything. A cashiers cheque even less so - it comes from the bank, not your account.
I don't think we will get existing planet-scale financial regulatory authorities to give up their dream of ubiquitous financial surveillance and point-and-click, shoot first and ask questions later financial censorship/DoS abilities simply by there being an alternative.
Already they have practically banned p2p bitcoin transactions in the US. They're closer to their goal than we are to ours.
In 2011 I gave a halfway tongue-in-cheek talk called "Financing the Revolution" about digital payment systems, with a focus on bitcoin and the new possibilities it enabled. It is still, all these years later, not really possible to finance a revolution with bitcoin.
I didn't think bitcoin wasn't going to be special in that regard either, because states have shown ability to tax and regulate the finance of citizens before anything electronic ever existed, with cash, gold, cows, farmland, personal goods and more, and they would just go back to those old methods with something like bitcoin or monero.
Also they're willing to add a lot of inefficiency to their economies to retain financial control of their countries.
Presumably, forcing illegal actions to happen through bitcoin adds friction to the process.
But more importantly, as far as I know bitcoin is not designed to guarantee anonymity in money transfers, and the fact that every transaction is set in stone publicly in the blockchain makes it relatively easily traceable. Am I wrong in that area?
> Presumably, forcing illegal actions to happen through bitcoin adds friction to it.
Adding friction to non-illegal actions is harm, not benefit. Adding friction to illegal actions is the opposite of what happens, because it's enabling something that wasn't previously possible. Also, criminals can survive higher friction than dissidents and vulnerable populations because the illegality creates a moat that raises margins.
It's why drug cartels make billions of dollars and can finance submarines and stuff but marginal changes that nobody thinks through the implications of get dissidents killed.
> But more importantly, as far as I know bitcoin is not designed to guarantee anonymity in money transfers, and the fact that every transaction is set in stone publicly in the blockchain makes it relatively easily traceable. Am I wrong in that area?
Every transaction is public but it's only the transaction and there is no requirement to reuse the same wallet for multiple transactions.
You go to some cryptocurrency hangout, pay some stranger a hundred bucks in cash and they transfer a hundred bucks in Bitcoin to your wallet. You go pay for a VPN with it. Then everybody can see that A transferred money to B and B transferred money to C, but nobody knows that you're B and those are the only transactions for that wallet.
Also, there are cryptocurrencies where this isn't the case and you don't even get that.
> You go to some cryptocurrency hangout, pay some stranger a hundred bucks in cash and they transfer a hundred bucks in Bitcoin to your wallet. You go pay for a VPN with it. Then everybody can see that A transferred money to B and B transferred money to C, but nobody knows that you're B
Nobody? Some stranger from above knows that you're B!
> You go to some cryptocurrency hangout, pay some stranger a hundred bucks in cash and they transfer a hundred bucks in Bitcoin to your wallet. You go pay for a VPN with it. Then everybody can see that A transferred money to B and B transferred money to C, but nobody knows that you're B and those are the only transactions for that wallet.
Essentially you have to create a brand-new, single-use wallet for every transaction, am I wrong?
While it's not trivial, it's been shown that you can de-anonymize bitcoin transactions. In some cases it's very easy. So in practice you can't rely on your transactions being anonymous even if in practice some of them may end up that way.
And of course even if transactions themselves were fully anonymous, many people end up needing to rely on exchanges, and the idea of those being truly anonymous is borderline absurd.
Cryptocurrencies are here to stay, environmentally unsound ones, probably not. Play your part and stop using/investing in cryptos that have a high carbon footprint.
How does this compare to the environmental impact of the millions of people constantly surfing sites like Reddit all day? I always hear about how bad Bitcoin is in terms of energy consumption, but nobody seems to perform similar analysis on actually frivolous activities we all accept in our society.
But how does reddit browsing scale? We may choose all-electric activities, but we still have only 24h/day. As far as I understand it, PoW mining and its energy consumption can grow arbitrarily, the only limit is a mining economy that grows with a coin value. And it grows fast. How much energy will it take if BTC or ETH hits e.g. $1M in few years?
This is why I think a big land grab will happen for ETH. And even though I think bitcoin is grossly overvalued, ETH could accelerate and possibly surpass bitcoin in terms of paid-in capital. PoS, at least in theory, creates future cash flow. Not a fan of crypto but Vitalik is one of very few people in the crypto space with genuine good intentions and intellectual curiosity.
he also has a %70 premine of this coin with his buddies. Eth also have a dynamic issuance schedule exactly like USD, EUR or any other fiat. Except instead of a Central Bank, a few devs decide it.
So many gems in this one that shows the bias of the author:
"Simply: the Bitcoin blockchain only transfers and secures bitcoins. It does not move actual money like Fedwire does."
This is factually incorrect when you actually own both of these "monies". But it wouldn't bother you if you only own the devaluing one.
What does ESG stand for? I searched the article and it’s not there. I’m sure it’s widely known in the literature this writes into, but key terms should still be introduced along with the acronym.
I think the mistake here is that the author doesn't understand the potential of cryptocurrency so sees electricity use for crypto as a pure cost. You can see this because of comparisons to centralized services.
On coal power: It's bad to use coal to mine Bitcoin, but it's bad to use coal to provide power for any activity. Coal power should be banned outright.
So since bitcoin is up right now, we're just going to see nonstop attacks on the fact that it's not climate friendly with its energy usage? Feels like this is the sixth article I've seen on Hacker News in the last month.
From a quick skim this article seems like it might have some good data, but it also has a bunch of loaded language in it that turns me off from wanting to read the article.
"Bitcoin and other PoW coins are an ESG nightmare"
"This paper looks at the energy consumption of seven proof-of-work-based anarchic (public) blockchains such as Bitcoin and Ethereum." (You know how anarchy is bad right, well we're going to say these are like anarchy, so they're bad too.)
"Many Bitcoin promoters conjure a future world...[where Bitcoin is king and leads to renewable energy]" (they're like spellcasters, this future doesn't really exist, they're trying to pretend they will create it out of nothing but they never will!)
"Putting aside the continual greenwashing that many advocates are guilty of" (You know how whitewashing is bad? Well so is greenwashing! I'm saying these people do that and that means they're bad!)
"The container ship fetish is a slight-of-hand[sic] trick..." (These guys have fetishes and fetishes are bad, also they're using slight-of-hand and tricking you, and tricking people is bad!) Also the writer misspelled 'sleight'.
If they wanted to change minds the writer should have used more neutral language in their sentences. You can be persuasive without resorting to this. I'll sit down and read it a bit later, but not feeling like trudging through all this loaded language.
"Anarchic" is a perfectly reasonable, even necessary, descriptor for cryptocurrencies. They were born in the cypherpunk community, and Bitcoin cites Wei Dai's B-money, which directly namechecks Tim May's Crypto-anarchist manifesto.
That was the first one I noticed, and if it was only that word in isolation (without the rest) I wouldn't have bothered making the comment.
Regardless of how it was born, I don't think it qualifies as anarchy now, especially with how it can be tracked and regulated (indirectly, i.e. it can be banned, transactions taxed, exchanges subpoena'd for transaction information, ledgers tracked, etc) by governments.
Some crypto can be potentially tracked by governments, but it's a lot harder to seize someone's wallet than it is to close their bank account. Having a non-state backed currency is a prerequisite to anarchy.
None of the neutral language moves the needle. People have been pointing out for years that using more energy than all of Denmark to handle fewer transactions than a mid-sized Walmart is not a recipe for success.
There are too many bagholders, excuse me, "investors" who are financially motivated to keep pushing this stuff.
Just all the always-on devices in the US alone consume 1.5 times the electricity of the entire bitcoin network. And at least the bitcoin network is doing something useful.
Hacker News is indeed being overrun by a too large amount of irrational bitcoin FUD.
The energy 'argument' is easily debunked. But that's not what this comment is about, so I won't rehash it here.
Trying to change people's minds on here doesn't work. But you know what? That's okay!
It signals us bitcoin holders how incredibly early we are in this life changing monetary revolution, that we are seeing unfold before our very eyes.
Bitcoin was meant to be attacked from all angles, non stop. It's what makes it so resilient.
If it can fail, it must fail.
But it's not failing, is it?
Quite the opposite...
Every bitcoin newcomer who reads this FUD, is going to remember it years from now, when bitcoin is still around and at higher prices than ever.
And they'll think to themselves... "Well, if after all these years, bitcoin is still around, despite supposedly being a bad thing, then it might not be such a bad thing after all!".
So I say:
Let they naysayers attempt to take bitcoin down. It will only result in new all time highs for my portfolio. And for that, I am grateful.
The early bird gets the worm. The late ones convince themselves the worms are poisonous, leaving more worms for the early birds.
I would agree there are people that are buying in now that think there's no risk that Bitcoin will go down, and think it's only going to keep going up, and will probably sell as soon as it drops and lose a lot of money.
There's definitely a risk it could go down. Bitcoin has been super volatile in the past, and has cratered to 20% of its price before and probably will again. Might even be relatively soon (within a year, I'm guessing).
But people who have held on to the asset through those dips are now doing incredibly well, assuming they sell before the next major dip (and probably even if it they don't, 20% of $48,000 is $9600, and if they bought while it was $3500 a year ago, that's still triple what they bought it at).
People who have bought and held since it was $220 back in 2015 are likely doing extremely well.
There's very few assets out there that can offer 200x returns in just five years.
The real estate & bitcoin comparison is apples & oranges.
Real estate existed (and still exists) in a world of inflationary government IOUs (read: fiat). People were taking out too many & too large loans. Ofcourse it was going to go bust. People were talking about it. The author of the book he linked, was being a contrarian.
Bitcoin has created its own reality, which has only just started to gain traction. It's the early days of the dot com boom. It's the early days of SEO.
Every informed individual sees the writing on the wall. Something doesn't grow for 12 years straight, unless it's got something interesting going on.
To state that bitcoin is going away, is the equivalent of stating that the Internet is just a fad that will soon die out. It's an inherently contrarian view.
I'm not arguing it's going to die out. I may or may not be one of those someones who has had at least a little bitcoin since it was priced $220 (or earlier).
But while we may be nearing (or at) the end of the era of crazy drops, where everyone thinks "Oh crap, it's all over, time to jump off the ship!" and bitcoin is now in a 2+ year bear run, I can't discount the possibility, and the price still swings up and down in price quite a bit even as recently as two months ago, so I think it's possible that we could see see a fairly big, somewhat sustained drop again (maybe not a whopping 80% drop, but 30-40% maybe? I'm also hopeful it won't last as long, like maybe only 6-12 months, not 24 months).
The bear market was actually closer to 3 years. But that ended a while back. It's now solidly in a bull market.
Bitcoin is fantastic. But even fantastic assets can become overvalued. And indeed, this will happen again. There will be another bear market.
I keep myself up to date on the market sentiment every day. I have been doing this for years now. The current sentiment is that we are in the middle of the bull market. Both billionaires as well as retail buyers have only just arrived.
Everything is going much, much higher for at least the rest of the year.
If the market cycle repeats like last time, the bull market will last at least the larger part of this year.
If the cycle is lengthening, as you'd expect when market cap grows larger, then the current bull rally will last longer still: say... to the end of 2022.
The question is: are we currently at the knee of a larger S-curve?
If so, then we are truly witnessing a rare event, in which asset appreciations will truly blow us off our socks.
In such an event, bitcoin would become too scarce for it to do another 85% retrace, which is what it's done in previous market cycles.
(Any by the way... the 30-40% figure are considered normal retraces, of which we usually have multiple during a larger bitcoin bull run.)
Billionaire Michael Saylor from Microstrategies is saying that he's not selling. Billionaires are, in this regard, different from retail, who do sell.
The only way to estimate bottoms and tops successfully, is to be right on top of it every day of every week.
Wasn't trying to argue we weren't in a bull market right now, just not sure how long it will last. You said basically the same as I did, that it may end within a year. I hope it will last a lot longer than that, of course. Hell, I was hoping we'd be flirting with $50k 2 or 3 years ago.
It looks like it should last longer based on the institutional investment, but I also thought we had enough interest three years ago and suddenly we entered bear territory (thankfully I luckily sold some of my crypto a week before it started to drop for a downpayment on a house, but I held on to the rest for way too long, way too long meaning I never sold, and should have sold and bought back in a year or two later, in hindsight). At least I still have it now for this boom, but I could have had double or triple what I have now.
But I'm watching the market and news like a hawk in case sentiment seems to shift back to 'the sky is falling' suddenly again.
In my mind this comparison isn't exactly the right way of looking at it. Most of the early buyers who held on bought full shares of bitcoin before fractional shares were an option. The people buying it at 48,000 are likely buying fractional shares. So they're not necessarily invested at the full risk of losing such a significant amount of money. I think this is part of the reason it's going up.
Pretty sure it's always had fractional shares. I was following it somewhat back then. Granted, it was worth so little that most people didn't bother except for maybe the fees, but it was fractional by design from the start, I'm pretty sure.
Regardless of people buying fractional shares, I see plenty of people on the bitcoin subreddit going "I'm a noob at bitcoin, and FOMO bought 0.1/0.2/0.4 coin yesterday for $46k, did I make a mistake, is it about to drop?"
Those people are still putting in thousands of dollars, and some of those people probably aren't so financially stable that they feel comfortable seeing the price of bitcoin drop 20% in 48 hours like it did a month ago, they could end up selling and losing thousands of dollars as a result.
I only put in a little every month, money that I'd probably just waste otherwise, so I'm really happy it's up but I'm not super stressed when it drops. But I acknowledge that not everyone does what I do.
Fiat is at the end of its lifespan. People are seeking refuge in bitcoin now. It's deflationary by design, which makes it an excellent store of value. It's value has only been going up for 12 years straight now. No bubble to be seen here.
The crypto market is now just gettings its first billionaires to invest in it (Michael Saylor, Elon Musk, GrayScale, etc.), and the market cap is still small. This is just getting started.
But I have to trudge though your non-subtantive rant as the top comment. How about addressing the issue discussed in the posted article instead of opting out because you don’t like the language the author uses in an attempt (perhaps unskillful) at being persuasive?
Because I didn't read the full article yet, because it's super long and it's morning and I haven't had coffee and I'm getting ready for work.
I did read a little bit to see if it's worth reading later, and was really annoyed by its loaded language, and wanted to point it out to people who might not notice otherwise. Seems like, for the most part, at least right now, people agree with me.
Also I can't even go back to read it now if I wanted to, since it's now serving a 503 after being slammed with traffic, I assume.
Another issue is that proof-of-work may simply be inferior to other consensus mechanisms because of hardware centralization. I think the cryptocurrency world needs to solve this problem at its own pace though. Ethereum is already rapidly heading to proof-of-stake, precisely because it's seen as better on its own merits without considering energy costs.
I see the dyson cloud becoming Elon’s next big project to help maintain this network. Our energy production is too outdated and primitive.
The same to our legislative bodies, human society is having an anally retentive crises when it comes to technology. The system’s chocked and cant function well.
That would make an interesting answer to the Fermi paradox - nobody is travelling because everyone stays at home to perform PoW calculations in a dyson cloud. Which does rather remind me of Accelerando by Charlie Stross - maybe Economics 2.0 used by the vile offspring is a giant PoW scheme:
A Dyson cloud is a similar mega structure but not a continuous surface. I think it is more commonly referred to as a Dyson swarm. Isaac Arthur [0] had an episode about it in which he mentioned such a structure to be quite feasible with modern day technology.
He means a Dyson swarm and we are not centuries away from achieving this. The economical sense is on a different paper. Having ASIC miners in space connecting to something like Starlink is entirely possible even though not cost effective. https://en.wikipedia.org/wiki/Dyson_sphere#Dyson_swarm
The locked up energy used for mining was never available to populated area's in the first place, it is exces energy.
It's a bit like if you compare taking a shower in the middle of the desert with standing under a water fall and telling someone not to waste water while standing there because you consume as much water as 10000 people.
If you smelt aluminium in a remote area you then have to move it to an area where it can be useful. Moving it consumes a lot of energy. If you mine a bitcoin near a power plant with excess capacity, anyone anywhere in the world with an internet connection can leverage that work for value transmission. This literally allows a computer in China to replace an armored car in Denver, Colorado.
> There are plenty of other good uses for electricity besides bitcoin or powering a city directly.
The argument "uses lots of energy = bad" is a fallacy. You have to take into account what the alternatives are. You know what uses a lot of energy? Public transit systems. But nobody is arguing that public transit systems are bad because the alternatives are a lot worse.
But if you smelt aluminium, you have valuable aluminium.
It's disingenuous to pretend (without any sourcing) that bitcoin is only mined using electricity that would otherwise have been wasted.
If this were really true, then bitcoin miners should all be getting paid to act as load banks[0] for their local electrical grid and soak up that excess power. Since they are instead paying for electricity, they are using valuable electricity, not spare/waste power.
> But if you smelt aluminium, you have valuable aluminium.
And it's useless until you spend more energy to move it to where people want it.
> It's disingenuous to pretend (without any sourcing) that bitcoin is only mined using electricity that would otherwise have been wasted.
It doesn't have to be only mined that way. You're being absolutist. Competition has resulted in bitcoin mining being very sensitive to energy costs. It stands to reason that miners--especially the ones operating at large scale--will move to places where there is cheap energy.
Several of the big mining operations mentioned there are located in places known for cheap electricity. Genesis mining relocated to Canada and Iceland specifically for cheaper power. Gigawatt is located in Washington State which has some of the cheapest electricity in the U.S. (part of the reason Google chose The Dalles, OR for one of their data centers).
If you are generating electricity where it cannot be used, then you are causing needless environmental damage and you should almost certainly stop doing that.
Bitcoiners proposing that POW networks will bring about breakthroughs in energy production would be hilarious if they weren't destroying the planet while doing it
Edit: the article examples are just infuriating. "Bitcoin is a battery" No, absolute-fck-lutely not!
drink wall st. ESG kool-aid if you want, i have seen diamond merchants in ESG ETF componens. go figure.
your electric cars as well combustin engine cars use lot of energy worse than Bitcoin. oh cars get you from point a to point b. guess what, Bitcoin gets your value from point a to point b more efficiently than anything else out there yet and it maintains so keeping it as the hardest money known to humans
gold mining, banking services use lot of energy
you playing xbox or publishing dumb articles on an ad-tech trojan horse also takes energy
I honestly just can't buy into high energy usage as a criticism. I think we should be focusing our efforts on massively expanding our power generation, not cutting back usage.
As a counterargument, proof of work takes all the energy it can get: because bitcoin automatically makes the work to proof more difficult.
This means when there is more available energy it's lucrative for miners to put more energy in the system. However, no more bitcoins are outputted. The only extra output is heat from used hardware.
In some other related topic on HN, someone compared it to a car, where more energy would not just mean more miles driven, but an equally longer road.
You're probably right that the incentives are misaligned. I suppose I'm just reacting against what I feel is an anti-progressive assumption, which is that reducing our carbon footprint to desirable levels will require a massive reduction in our energy footprint.
I understand your sentiment, and I agree that the future probably is one where we use and generate a lot more energy then we do now.
But I do hope that in that future we also use that energy a little bit smarter, and proof of work's incentives are indeed aligned poorly from this perspective.
Disclaimer: I am conflicted about the subject, because I think there is merit in crypto, and also hold some myself.
Aside from the fact that I’d be willing to bet that all the gold in the world occupies less space than all the Bitcoin mining equipment in the world, space is a terrible measure of energy consumption. So let me spell it out for you: Bitcoin is a system designed to maximize its energy use indefinitely for as long as it exists. The cost of holding any value of Bitcoin is equivalent to the energy consumption of the entire network for as long as it exists, because that Bitcoin’s existence is only guaranteed as long as the network remains online. By contrast, if I have a gold bar sitting in a safe in my house, there’s a fixed energy cost to that, and it’s virtually zero.
"But they did it first" stops being an excuse once you move on from third grade. Even if the costs of bitcoin generation and transactions are better than mining gold, it's still a poor excuse to prefer "getting rich quick" to being considerate to the future generations.
"Traditional Banking" does far more than bitcoin ever can (without building similar structures, organisations, products, call centres, offices, etc etc around it), and serves many many times more people. Your comparison is spurious.
What's the energy cost of a financial sector that takes a ~3% cut of all retail transactions, puts up physical bank branches to manage money, empowers a federal reserve to manage the value of currency with more or less competency... Comparing BTC energy costs to some mythical world where we just burn free lunches for heat is not honest.
