Bitcoin as it stands is the definition of inefficient. Consuming vast amounts of energy for no purpose. Yes, there are ever-changing explanatiins for Bitcoin's usefulness. But there is no fundamental reason why massive energy consumption is required to store digital value, or to make a transaction across borders.

As it stands, Bitcoin is actively bad for the world. We need more energy efficiency, not get rich schemes combined with electric heating for empty warehouses.

There are likely good uses that will come from crypto tech, but this doesn't seem to be it. (And I'm not knowledgeable enough to guess what they will be)

(I imagine you agree, but clarity is useful)

I think what they were referring to is how electricity is allocated or stored. Currently, we cannot do so effectively. It is ironic that Bitcoin is being referred to as a store of value.

I would hesitate to say that squandered electricity has very little value but it is all dependent on what your definition of value is, potential or realized.

Note that chemical batteries and pumped storage hydroelectric both store large amounts of electricity very effectively (there lots and lots of deployments that were done by commercial interests seeking to improve the economics of their operations, some going back decades).

A better analogy would be digging a hole and filling it up again. Or maybe better, causing a small amount of destruction to something that other people value.

The money supply affects prices. It's basic econ.

Yea, like the environment.

What is that supposed to mean? Blockchain isn't encrypted. It's secured with cryptographic hashes of course.

>and this delivers a store of value which cannot be seized.

Make sure to watch what happens when/if the US government and China have both decided it is a problem worth much attention.

Police can absolutely seize the physical artifacts on which your wallet resides. And if that storage is encrypted, consider https://www.xkcd.com/538/ - You may not be able to seize the bitcoins, but you can absolutely seize the person owning them.

They have to find it first, which can be easy or difficult, depending on how motivated you are to make it difficult. You can quite easily make it more difficult than it is for them to walk into a bank and say “freeze this account”.

A US judge ordering a person to turn over their BTC wallet would be check.

Certainly the police seize property citing dubious reasons, but are there examples of judges seizing financial assets without legal authority to do so?

Police can use civil forfeiture to seize property; but can't use civil forfeiture laws to compel you to give up your gmail password. That requires a court order/warrant. Hence the original comment about a judge could compel you into turning over your BTC Wallet.

Whether the reason is valid or not doesn’t matter much to the target of such an order. They still lose access to their funds. People who care about that possibility may want to take steps to make it more difficult for someone to do this to them. That’s all I was saying.

Defying the courts authority is Contempt of Court. If you fail to comply with a judges order, that can lead to incarceration. Continue to defy, can lead to criminal incarceration.

And it seems like anytime it's challenged or perceived as threatened it's almost a copy paste of the exact same content as above completely ignoring the original poster's comments.

Crypto or distributed banking may be a useful concept, but Bitcoin is horrible to the world. Energy is one of the single most important and fundamental resources. To get really theoretical this hold from the cellular level all the way up to societal. We are burning and trashing a significant portuon of society's energy to run a simplistic financial network. And this percentage will only grow, and it's built into the system that it must be wasted.

Bitcoin is our first planet level grey goo, and we're somehow still arguing about it. 30% of our planet's energy cannot go to running a simple financial network, it's ludicrous.

Other than governments stepping in and banning it, what will prevent that?

I understand that the transaction cost is also quite high with Bitcoin but that isn't intrinsically necessary (like the cost to mint is).

Price to extract gold and value of gold is also an interesting dynamic. Fiat tokens also seem to have value built in via trust via the burning of value to create organizational systems to reduce friction. Expensive apparel also reduces certain types of social friction.

At some point, after hardware improvements plateau and competition heats up even more, this turns into a competition to find the cheapest electricity. In a ideal electricity market, this should be surplus electricity that's not used for any other purpose yet (wind farm not yet connected to the grid). Or perhaps generating bitcoin as a byproduct of electric heating? Any better use for electricity should result in higher prices that make Bitcoin mining unprofitable.

But before that happens, the electricity market would have to get a lot more rational, and externalities need to be fixed. For example, carbon pricing would ensure that bitcoin mining only uses clean power.

Is bitcoin mining more wasteful than gold mining?

It is worth noting that appart from printing actual dollar bills (typically <5% of total money) the production cost (“seigniorage”) is effectively infinitesimal.

So yes, both gold and bitcoin are stupendously wasteful when your goal is to create currency for transactions. But at least in the case of gold the material is useful and you can use it to diversify your asset stock.

But when bitcoin prices are high, there is an increased risk that someone could launch a 51% attack and start double-spending bitcoins. Keeping the level of competition high does protect the network to some extent. But really it only has to be expensive enough to be unprofitable to launch an attack. Pushing difficulty right up to the point of any mining being unprofitable is a waste.

People tend to think of the rewards as set in stone, but they're completely arbitrary (they just have to be agreed-upon by participants). For example, there's no need for them to taper off over time, we could keep them constant.

It's just a question of what you can get consensus for. The geometrically-decreasing rewards of Bitcoin are probably not optimal, but without centralized control there has to be some kind of pre-determined issue rate.

We could just as easily agree to halve them right now (which would probably reduce electricity utilization as well as network security, as miners go offline). And that's essentially what Ethereum is planning to do - a major decrease in block rewards in the near future, so that they can create deflation (dumb as hell, but that's what happens when you let a 17-year-old run an economy, he has big holdings of Eth and just wants to see the number go up).

https://www.wolframalpha.com/input/?i=n%5E2+%2F+(2%5En)+from...

That's where we are now, and it means the reward will be large enough to drive bad behavior at least until the next halving (probably two years from now http://www.bitcoinblockhalf.com/ ).

By that logic all of human sports and entertainment is completely wasted effort/power.

It is the hashing power of the mining which secures the bitcoin. It's nigh impossible to steal / double spend, and this is pretty revolutionary IMO.

That said, proof-of-stake and other options exist that might also provide adequate security while posing a smaller cost to the network.

I think the problem with bitcoin waste is that it's proportional to how valuable it is.

First, gold is plenty useful outside value store: only ~30% of new gold per year is used for investment (this is per GS in 2015, I believe, and this is unlikely to have changed significantly one way or the other, pls feel free to correct me). The majority of remaining is used in mainly in jewelry & electronics (again per same source).

Second, on its way to providing for the point above, it employs hundreds of thousands of people full time that take that money to spend, save, invest aka. it works in the economy.

I'm not saying that bitcoin can't function like this or some similar way in the future, but it's a fact that it doesn't right now, and per this criteria I would say it's both more wasteful & less useful than gold. Bitcoin is simply plugged into your outlet right now and quite literally wasting energy unless you're using it to heat your home. That people have assigned value to the record of energy being spent is a separate phenomenon IMO.

People just think it's totally different, because this time they are the government. And because cryptocurrency is so steeped in libertarian ideology, they are unable to acknowledge any of the lessons of traditional economics, and are thus doomed to repeat its mistakes (eg: deflationary/hyperdeflationary currencies).

As a form of Keynesian stimulus, it's totally possible for block rewards to represent a net positive gain of economic activity as they "prime the pump". Gold mining is probably quite mechanized nowadays, so I wouldn't really care to guess which is more efficient at translating stimulus into economic activity, though.

If a bitcoin replacement were built on, say, folding proteins, then the information gathered has a benefit that outlasts the value of the currency.

Bitcoin only accomplishes two things: burn dinosaurs and slowly erode the usefulness of SHA2.

Maybe it improves the situation for ASIC manufacturers? I dunno. But gold improves the situation of wheelbarrow and shovel manufacturers just as much.

This sounds very close to whataboutism.

edit: Waste might even be exponentially proportional to bitcoin value...?

The problem with scaling to larger numbers of transactions is that block sizes become bigger and it takes more disk space and bandwidth to run a node. But, the bigger we make them, the more transaction fees there are, so incentives for miners would actually go up.

(very marginally so - block rewards are like 100x as high as the transaction fees, which actually leads some miners to not include transactions at all - trading off a 1% lower payout for faster propagation times and an increased chance of "winning" if they successfully mine a block at nearly the same time as another miner)

On the large scale, I don't see mining efficiency affecting total bitcoin power usage, but I do see rewards impacting it. (higher BTC price => higher economic incentive to mine => more investments in mining operations => more power usage)

I think a lower bitcoin Hashrate would actually be a good thing (for power consumption and pollution)

Ethereum is moving to a PoW PoS hybrid (Casper) which uses a lot less energy and so are most of the new cryptocurrencies.

It's possible that bitcoin will soon, too.

This is going to be a radical idea, so bear with me here. What if instead of destroying civilizations, we didn't destroy civilizations?

You don't get to decide what's wasteful and what isn't; each person decides that for themselves. That's just how economics works.

I find it interesting that people who talk about how things are "simple economics" very rarely understand economics.

The economic definition of "efficiency" is not just "everyone doing whatever they want."

People mining Bitcoin are doing so out of their own self-interest. If Bitcoin were not valuable enough to overcome the cost of mining it, they wouldn't be mining in the first place. Whether or not there's a more "efficient" way of doing things is irrelevant to this point.

But, for the sake of argument: less efficient compared to what? Prior to Bitcoin, there weren't any other transaction mediums that offered the same capabilities and security properties that Bitcoin does.

Every technology has advantages and costs associated with it. You can't consider the costs in isolation and use that to claim the entire technology is a waste.

I disagree that it's irrelevant.

> They just see Bitcoin as worthless, and therefore consider Bitcoin mining to be expending energy for nothing.

No, to reiterate, they see bitcoin mining as inherently wasteful because energy is burned without regard for useful work done. A centralized system can process multiple orders of magnitude more transactions than a PoW based one where more energy is only needed when more useful work (transactions) needs to be performed.

> less efficient compared to what?

To every other system for processing transactions that is not based on PoW, for example, the centralized banking system. Yes, I understand that those systems don't have all the same capabilities that a PoW system does, but the incumbent systems already work well without whatever added capabilities a PoW system provides and is also incidentally much more secure in practice compared to PoW based systems.

Would you consider Wells Fargo's employees setting up fake accounts on behalf of their customers and charging for them, an example of these systems "working well"? Blockchain alternatives have really only seen anything close to mass adoption in the last 3 to 4 years. These are emergent solutions which are already pivoting to hybrid versions that run on renewable energy (it is afterall a race to mine with the least cost possible) and while unproven, proof of stake gives a hint towards the ongoing work to mitigate the negative impact of the underlying resource consumption. It's important to be highly sceptical and rigourous in evaluating blockchain technologies, but could it be advantageous to do so with a longer timeline as the base for analysis? Many critics here seam to treat this as if the verdict were already in.

I would consider that fraud; if fraud is our metric then blockchain based systems are definitively the loser.

> Blockchain alternatives have really only seen anything close to mass adoption in the last 3 to 4 years.

They haven't seen anything close to mass adaption ever and there is no foreseeable future where they will since they provide immense utility to a very tiny subsection of the population and have so far been demonstrably useless for anything else.

> These are emergent solutions which are already pivoting to hybrid versions that run on renewable energy (it is afterall a race to mine with the least cost possible) and while unproven, proof of stake gives a hint towards the ongoing work to mitigate the negative impact of the underlying resource consumption

Unfortunately the stewards of the blockchain ecosystem have squandered all credibility with regard to unproven solutions because there is just too much grandiosity compared with what has actually been produced.

> but could it be advantageous to do so with a longer timeline as the base for analysis? Many critics here seam to treat this as if the verdict were already in..

I don't think it matters; if anyone discovers a generally useful function for blockchain tokens or a way to sustain the network without an inherently slow and wasteful PoW system then the critics will look like idiots and they'll have no defense because something actually useful needs no defense, it's utility is apparent in its widespread adoption.

You're, of course, free to ignore Bitcoin if those properties don't appeal to you. But the fact that you don't see value in them doesn't change the fact that others do, and if those people choose to expend their resources maintaining that system then that's, frankly, none of your business.

If the cost of maintaining the system reaches a point where it outweighs the value it generates, then and only then will people choose to stop expending their resources to maintain it. That's why your concerns about efficiency are irrelevant to my point; no matter how inefficient _you_ might think the system is, it's obviously still generating enough value to sustain itself otherwise it would cease to exist.

I never argued this, what I'm saying is that it's fallacious to suggest that incumbent systems are not comparable to bitcoin, they are, because they compete to replace those systems in their feature-sets and are marketed as such by the stewards of these blockchain projects. Your reasoning is akin to suggesting that a Tesla can't be compared to a Hummer because it does not support the capability running on liquid fuel which has desirable properties such as high energy density and rapid refueling when compared to lithium batteries. Obviously they are not the same thing, but fuel density can be likened to decentralization in that it doesn't make a difference to the vast majority of people one way or the other as long as they can reliably get form point A to point B... except one vehicle fills the air with poison as a necessary byproduct of operation and the other does not which is clearly preferable if you don't care about fuel density (decentralization).

> no matter how inefficient _you_ might think the system is

It has nothing to do with what I think, the inefficiency is an objective fact and clearly demonstrable when you look at the numbers, your only argument seems to be "yes, one is more efficient than the other, but don't think about that because decentralization outweighs everything else"

> it's obviously still generating enough value to sustain itself otherwise it would cease to exist.

That's a tautology, "it exists so the prerequisite conditions for it to exist are obviously fulfilled". Just simply existing isn't a counterargument to criticism of waste.

Probably true. But for some people it _does_ make a big difference, and those are the people who will use and support Bitcoin as an alternative medium of payment. Again, if there was no demand for Bitcoin, it wouldn't exist.

> Just simply existing isn't a counterargument to criticism of waste.

It is though, because unless you're arguing the "waste" in this case is an externality (which it's not; miners are paying these costs out of their own pockets), Bitcoin's continued existence proves that it's generating enough value to sustain itself; even despite it having to compete with traditional banking systems.

Using your own analogy, what you're doing is akin to arguing that Tesla is a waste because cheaper electric cars exist that can get you from point a to point b just as well. (Those cars take less resources to create, therefore the more expensive Teslas are "a waste of resources".) That argument would be flawed for the same reason: you don't get to impose your definition of value on everyone else. The people buying Tesla cars obviously see some value in them beyond their competitors. If they didn't, Tesla would cease to exist. Tesla's continued existence proves their cars generate enough value for enough people to be worth the additional cost. In other words, it's not a waste.

2. Please, provide your economic definition of "waste", which contradicts parent.

That's just completely incorrect and demonstrates an ignorance of the history of computers.

>And the internet.

Once again, this statement demonstrates an ignorance of history. The early internet was a monumental research and engineering effort funded by the U.S. military because its utility was completely apparent before it was even built.

[edit]

For those reading this who are perhaps a bit more open minded, it is not clear what the future productivity gains will be from moving capital allocation out of the hands of central banks into the hands of Bitcoin hodlers. To beat a dead horse, If 51% of energy is devoted to securing btc, but capital is allocated in a way such that productivity increases x%, where x offsets mining/transaction costs, what's the problem?

Of course not, why would you even think that? What about a technology being obviously useful implies the need to make arbitrary predictions multiple decades into the future?

Yes, producing a lot of cheap energy is an opportunity to use more of it.

There's a bunch of stupid things people do with energy and increase their CO2 impact. Bitcoin is just one.

I'm pretty sure abstaining from flying planes throughout all your life is more CO2 not emitted than building a small mining operation and mining for life.

I'm pretty sure if we summed up the CO2 impact of increased dietary requirements of athletes and body builders and similar would get to huge numbers.

So once you have a dumpster fire, it's OK to have infinitely more dumpster fires?

People do a bunch of stuff that has magnitudes bigger CO2 footprint.

Are we profiling CO2 usage? If so, what, we want to optimize the tiny footprints instead of the biggest?

BTC mining, just like Christmas lights, can work with solar. Then we are going to complain about electricity wasted.

Bitcoin will either be wasteful in proportion to its market cap, or it will be vulnerable to attack. There are no other options.

Anyone with that computing power will use it to earn transaction fees, not to attack Bitcoin by sniping funds through double-spends. If Bitcoin were ever attacked such that transactions were not immutable once confirmed, people would stop using it and the value of Bitcoin would drop. A 51% attack only destroys Bitcoin. There is no financial incentive (at least not in terms of Bitcoin).

(This is in the original white paper.)

Still it this exact belief in math that will become a self fulfilling prophecy and keep bitcoin afloat way past someone executing 51% attack.

But generally, it's a fair generalization that if step #1 in taking down Bitcoin is acquiring >50% of mining power, most rational actors will go off-mission and decide that step #2 is mine Bitcoin, not screw with it.

Without Lightning then yes the amount of transactions-per-time-period is very limited.

This is also true of war and those who buy computers to make models of why the Earth is flat.

>Most of the big mining operations are run on 100% renewable energy sources.

Admit it, you just made this up.

Every single thread about bitcoin like clockwork people will say stupid one-liners like "but at least X has value" or "but X is useful" and like clockwork someone will bring up that Bitcoin has use and value, and then the whole discussion will derail into insults and what-ifs on what-ifs.

Bitcoin has value, Bitcoin is useful. You may not think it is that useful, or has that much value, but it has some. Many feel that it's value is a way to transact without trust, others feel its value is a way to store money outside of any single government controlled currency, others find its value is in the pseudonymity that it can provide, others find that being able to put small amounts of data on a globally immutable ledger is immensely valuable, and many people find its value as a way of gambling on the price.

and no one really has evidence to show how the mining is powered.

The majority are mined in China, and that’s for the utility of cheap coal. If you have some evidence of massive solar farms powering mining in a China, please do cough it up.

>Admit it, you just made this up.

I thought both Bitmain and Bitfury were using renewable energy in places like Canada and Iceland?

Generally that isn't renewable (at this time).