To be honest, this is my reason for not jumping mindlessly on the cryptocurrency bandwagon: it's wasting so much resources and power, especially when you take a look at videos of mining farms.

The whole thing reminds me of one Arthur C. Clarke short story, probably from the 1950s, where a group of Tibetan monks has purchased a computer to generate "all the one billion possible names of God". Before the computer, the monks had been doing the work by hand for centuries.

An American computer engineer is sent to install the machine. He chuckles at the monks' superstition: they claim that generating the billion gibberish strings is a task from God and the fundamental purpose of the universe.

They made a mistake by not increasing the search space (or difficulty in Bitcoin terms) in order to make that computer faith-compatible.

Then the Universe is destroyed when the billionth name is generated.

I'm not really in this world, but you'd save more power by recycling aluminium cans (%5+ of US power consumption) than by killing off cryptocurrency mining.

Personally I bring everything I can to recycling points, sometimes even if it's not my own garbage. But I'm aware people don't care.

On the other side the crypto mining is not only the power consumption: it's all the hardware and it's production as well. The ASIC antminers can't be used for anything else, hard to recycle as well and they constantly need to get bigger and faster. For Ethereum, people are buying shitloads of high end GPUs.

I also don't like the idea of storing insane amount of data, hoping to find correlations to make more money, but this is also nothing I can do anything about.

You understand that this article is about a cryptocurrency that uses a service (long term file storage and access) and the proof of work function instead of pointless computation.

Yes, I do, and this sounds like a good idea - emphasis on the sounds, because it's not new, see primecoin.

Filecoin at least isn't based in competition who can do "useless" computation the fastest, but computation only happens to verify data is actually being stored by those claiming they do so.

It doesn't look like Filecoin does this. Proof of stake also solves this problem for other crypto currencies. Ethereum is one of the big ones that is planning to move to PoS. I seem to recall reading somewhere that BitShares will too.

Mining bitcoins alone is on par with Ireland for electricity consumption.

I'll never understand why this keeps coming up. Energy consumption is not a waste if it has utility, and the bitcoin network has utility. I suppose you could make this argument for some worthless altcoins, but the difficulty for those is low enough that the amount of energy consumed is negligible.

> the bitcoin network has utility

Utility and potential for utility are incredibly different. Bitcoin has no utility. I can't safely store value in it, nor can I use it for quick transactions.

Its only utility is speculative. The energy consumption is fueling a somewhat randomized, opt-in wealth redistribution service. That's not to say I think bitcoin or its ilk are terrible, but rather that the energy, in most cases, could be better used elsewhere (or like, not at all).

It's ok to like bitcoin. But let's not fool ourselves about the bad parts of it.

Bitcoin is as worthy as tulips, in terms of intrinsic value.

(Of course the worth of paper currency is the same, still, the backing is stronger)

What will happen when bitcoins are worth less than the cost to mine them is anyone's guess

Paper currency is backed by the presumed continued existence and effective taxing and police power of the issuing state. It might seem theoretical, but if you benefit from the existence of the state, generate value, and don't pay your share to the state in the currency that they demand it in, then your punishment is anything but.

Right, but the total USD value is much greater than the tax obligations of its citizens.

Are you sure? The quickest sources I could find claim it's the other way by a significant margin.

> There was approximately $1.56 trillion in circulation as of July 12, 2017, of which $1.52 trillion was in Federal Reserve notes.

https://www.federalreserve.gov/faqs/currency_12773.htm

> In FY 2017, total US government revenue, federal, state, and local, is “guesstimated” to be $6.56 trillion

http://www.usgovernmentrevenue.com/total

The total USD value is much larger than bank notes. Money in bank accounts and equivalent services is in this context indistinguishable from notes.

The reserve requirements on balances on more than $115.1 million are 10%. That means with $1.56 trillion outstanding you're looking at a ballpark amount outstanding of $15 trillion in bank deposits. That's still not "much greater" than the $6 trillion annual tax revenue.

https://www.federalreserve.gov/monetarypolicy/reservereq.htm

From your link: "Depository institutions must hold reserves in the form of vault cash or deposits with Federal Reserve Banks."

Current balance of federal bank deposits is ~$2.3T:

https://www.federalreserve.gov/releases/h41/current/

Interesting. I'm not sure how to read that balance sheet. For the sake of argument let's say that there's $2.3T is federal bank deposits and $1.5T cash in circulation. If it's all used as reserve balances then that's a total of $38T in bank deposits outstanding. $6T taxing power a year is still not small compared to this!

Your traditional bank account balance is stored as 1's and 0's in a database somewhere. What is the intrinsic value of those bits?

Now think of how much energy is "wasted" keeping all those accounts updated, the lights on at all the branch offices, etc.

The way they store the information is irrelevant. They also have regulation and mandatory checks and balances on their ability to repay current account holders.

> Now think of how much energy is "wasted" keeping all those accounts updated, the lights on at all the branch offices, etc.

You should do some research before making such uninformed assertion (also banks do more services than just transaction ledgering)

The intrinsic value of bitcoin is that I can transfer money to anyone in the world, very quickly, for a couple cents of transaction fees, in a way that can't be censored.