I mean, Apple is close to a 1 trillion dollar market cap. I'd argue a 1% increase in world power output simply for Apple to store its money and make transactions would be a remarkably poor use of power.
Edited: fixed mis-use of "world GDP" to GWP as per tantalor's comment below. Thanks!
If anything, my "GDP" comparison was off the mark because GDP typically represents a country's total wealth, and bitcoin can't have a GDP. But it's a useful abstraction that comes pretty close.
Those bitcoin paper millionaires are investing in startups like Pinkapp, and Pinkapp is hiring programmers. All of this is happening outside the legal system. What does that say to you about bitcoin's ability to affect the world?
No, that's not how economies work. "Bitcoin benefits all who hold it" is like saying "the USD benefits everyone who has a USD". It's a completely meaningless statement.
> But it's a useful abstraction that comes pretty close.
No, it doesn't come close at all. Bitcoin's market cap has absolutely nothing to do with the value that Bitcoin adds to society, and thus it is a completely meaningless metric to look at if you are trying to decide if it "merits" use of our resources.
>Those bitcoin paper millionaires are investing in startups like Pinkapp, and Pinkapp is hiring programmers. All of this is happening outside the legal system. What does that say to you about bitcoin's ability to affect the world?
Nothing? I don't know what you're trying to say with this. Just because people made money off of bitcoin and now can use that money to hire other people does not mean it is affecting the world any more than anything else that people make money off of.
I also have no idea what you mean when you say "All of this is happening outside the legal system." That is another completely meaningless statement. I assure you that investments in startups and hiring of programmers all happens firmly within the bounds of all applicable legal systems. But even if it wasn't, it still says nothing about bitcoin's "ability to affect the world".
You need to stop drinking the bitcoin koolaid, bro. You're spouting nonsense in an attempt to defend it.
This doesn't follow.
I also have no idea what you mean when you say "All of this is happening outside the legal system." That is another completely meaningless statement. I assure you that investments in startups and hiring of programmers all happens firmly within the bounds of all applicable legal systems.
You haven't done even the most cursory search for Pinkapp. It's outside of the legal system, i.e. criminal.
You need to stop drinking the bitcoin koolaid, bro. You're spouting nonsense in an attempt to defend it.
Please re-read the site guidelines:
https://news.ycombinator.com/newswelcome.html
https://news.ycombinator.com/newsguidelines.html
It's important on HN to comment civilly and substantively or not at all.
World GDP is around 100 trillion.
So by your own figures, if it were denominated in BTC or equivalent cryptocurrency, we'd require more than 100% of the world's current power output just to store and send people's money.
That's more power output than is currently required for all the world's homes, factories, hospitals, transportation networks and all the world's computing power, everything. Which also benefits everyone who uses it, and creates jobs for a few billion people
Do you now see why people don't think current crypto tech is a particularly optimal use of power?
The world's currency isn't ever going to be 100% bitcoin. It's an invalid basis to start from.
I kind of see what you're trying to hint at, but it would be helpful for discussion if you could think of a more persuasive example.
(It may be difficult though, because it seems true to say that if Bitcoin starts becoming a significant fraction of the world's GDP then it's fine if it uses a little power. Where "little" is relative to the ratio of BTC's wealth vs the world's wealth, vs BTC's power usage to the world's power usage.)
If that's your metric then bitcoin gets an F- right now. Its world power usage fraction is much much higher than its world wealth fraction.
Broadly speaking, Central banks today feed this growth by printing money (i.e. increasing the money supply), hence inflation. A deflationary currency like bitcoin would have to grow in unit value accordingly because of its cap, if it were to become the de-facto new gold standard. How much power consumption is appropriate for mining needs to be considered in relative terms vs how much mower hungry is gold mining, for example. I am not sure how power hungry is printing and managing cash (incl. security, transport...). Also, all these activities (gold mining, bitcoin mining, cash printing) also contribute to GDP. Eventually if the power source is renewable and generation capacity is kept at appropriate level (e.g no one dies of cold because power must be prioritized to mining) does it matter? Or am i missing something?
I'm not sure how true that will turn out to be, but it's an interesting attempt.
The point of the economy is to create value for humans. There is plenty of non-value-creating activity that can be denominated in dollar terms, but that doesn't make it actually valuable. For example, this season's hurricanes will cause something like $200bn in economic activity. But that doesn't mean we should have more hurricanes. [1] People bet at least tens of billions annually on sports, but getting people to double or triple that doesn't actually make anybody richer. Similarly, Bitcoin is only a true economic positive to the extent that it actually creates new value for humans.
If Bill Gates went on a Bitcoin buying spree, he could easily drive the nominal market cap way up. But we'd have no more economic value in the world. If Bitcoin enthusiasts got bored and turned off all the servers, we'd have little less economic value in the world. That's because most Bitcoin use is not economically productive. Most of it is, like gambling, just moving existing economic value around between people.
I go on at length like this because it's vital that startup people understand the difference between creating value and just shuffling who controls existing value. Only the former is sustainable.
[1] To think otherwise is the broken window fallacy: https://en.wikipedia.org/wiki/Parable_of_the_broken_window
We can have $2 trillion in GDP with paper money, too, and that uses 0% of the world's power.
It seems tough to argue that a 2 trillion dollar GDP doesn't merit a 2% increase in power output.