Re:Bitcoin Energy Consumption Index
by GBiT on Saturday August 26, 2017 @04:48PM
(#15107359)
Energy is whats backing Bitcoins value. You need a lot of energy to create this valuable document - block
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Re:Bitcoin Energy Consumption Index
by politician on Saturday August 26, 2017 @04:54PM
(#15107391)
That's a good point -- in earlier times slaves worked the mines to extract gold from raw earth. Gold was a good store of value because of its scarcity. Likewise, Bitcoin mines the electrical grid.
Are you arguing that using the electricity you paid for is immoral, or are you arguing that using slaves is not immoral as long as you use them for something good?
I don't see how your analogy applies.
Slaves are unimportant to his point. Gold being scarce means it was hard to counterfeit gold coins in a time when you couldn't mint coins in a reliable way. Likewise, the purpose of bitcoin mining is to verify transactions in a way that is hard to counterfeit, making it more difficult to get a majority share of mining. The difficulty enforces scarcity.
Sorry, I thought it was a thinly-veiled moral argument equating bitcoin mining to use of slaves. Glad I was wrong.
Re:Bitcoin Energy Consumption Index
by politician on Saturday August 26, 2017 @05:09PM
(#15107463)
Correct.
This is completely true; miners will mine the coin that gives them the best ROI. If Bitcoin's value decreases without an equal decrease in difficulty, the whole thing could crash quite fast.
Energy doesn't back bitcoin, it just stops the currency from inflating. Or it would, if mining could always produce new bitcoins, but IIRC its supposed to stop after a while.
The difference being that a bitcoin does not entitle you to some unit of energy or work produced from it. The energy used to verify bitcoin transactions is just lost.
Energy backs bitcoin in the sense that "cheating" (reversing transactions or double spending) costs inordinate amounts of energy.
"backing" a currency usually refers to exchanging fiat money for a good with intrinsic value. That does not describe the relationship between bitcoin and electricity at all.
Energy ensures bitcoin's ownership, not its value (although it does impact its value indirectly).
The more energy Bitcoin network uses, the more valuable Bitcoins are... If Bitcoins value falls down, energy usage will fall down too. Energy is used to create valuable document - The Block. And block is not necessary new Bitcoins, its transactions too.