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Re:The Wealthy Are Hoarding $10B of Bitcoin in Bunkers by api on Wednesday May 09, 2018 @09:43AM (#17029708)
Bitcoin seems to have already undergone a deflationary collapse. Its original goal of Internet money has been abandoned in favor of the concocted idea that it is a "store of value." Unfortunately it's a poor store of value since it requires a constant stream of electricity to maintain. Gold, land, and other traditional idle stores of value just sit there and are free to maintain with the exception of the cost of physical security. On top of this Bitcoin is fragile as it requires an operating Internet or at least operating computers. In the event of a severe stress or collapse scenario it will cease to exist, while gold and other assets will continue to be viable units of tradable value.

I still don't understand why significant deflation is a desirable characteristic for a currency. Mild deflation is tolerable unless the economy is experiencing hyper-growth like the early 20th century, but Bitcoin is more deflationary than gold. Strong economic arguments that I don't have time to type in can be made that an ideal currency (as a medium of exchange) is slightly inflationary (in the monetary base sense) to the degree that the economy as a whole is growing.

Edit: collapse you say? But its value has held up! But this is exactly what happens (for a while) in a deflationary collapse. The value of money skyrockets but its velocity tanks.

http://charts.woobull.com/bitcoin-velocity/

Of course given all of Bitcoin's undesirable characteristics as a store of value I suspect that its value in USD/EUR/etc. will eventually tank as well. This might take a while unless something causes a panic since the market for BTC is slow and thinly traded.

IMHO all deflationary cryptocurrencies will undergo this kind of collapse.

Of course not all cryptocurrencies need be deflationary. Software defined money can be programmed to do anything you want it to do within the bounds of what is possible under e.g. the CAP theorem and other relevant concepts from distributed systems.

Cryptocurrency as a system is also inflationary in a whole-systems sense as new money can be created by forking a code base or creating a token on those coins (e.g. Ethereum) that support it. This argument holds as long as all these currencies are reasonably fungible without too much hassle. As it stands things like shapeshift.io make converting them fairly easy at least for the popular ones.

Re:The Wealthy Are Hoarding $10B of Bitcoin in Bunkers by blueprint on Wednesday May 09, 2018 @10:21AM (#17030031)
> Unfortunately it's a poor store of value since it requires a constant stream of electricity to maintain.

"Earth is a poor store of life because it requires a constant stream of light to maintain." Hm no, that doesn't work...

Re:The Wealthy Are Hoarding $10B of Bitcoin in Bunkers by simias on Wednesday May 09, 2018 @11:04AM (#17030359)
It doesn't work because we need life to be alive. We don't really need bitcoin for anything though. But you're right that in the very long term remaining alive on earth, or even in the universe at large is going to be a huge issue. Wasting energy mining cryptocurrencies isn't going to help. I wonder who's going to be the first person building a dyson sphere to power a BTC miner.
Re:The Wealthy Are Hoarding $10B of Bitcoin in Bunkers by blueprint on Wednesday May 09, 2018 @01:47PM (#17032001)
> We don't really need bitcoin for anything though.

Why was Bitcoin invented; what problem does it solve?

Re:The Wealthy Are Hoarding $10B of Bitcoin in Bunkers by gamblor956 on Wednesday May 09, 2018 @01:58PM (#17032122)
Bitcoin doesn't solve any problems of the modern financial system. It does (re)create dozens of new problems.
Re:The Wealthy Are Hoarding $10B of Bitcoin in Bunkers by TeMPOraL on Wednesday May 09, 2018 @11:21AM (#17030502)
Life isn't outgrowing Earth's capacity to absorb sunlight (nor Earth's capacity to radiate heat). Earth's energy flux is good for supporting life for the next 2 billion years.

Cryptocurrencies are designed to waste increasing amounts of energy that grow both with time and the popularity of the system. Right now we're not able to pull energy from Sun fast enough to power them (see all the global energy issues, fossil fuels, etc.). And even if we eventually could, cryptocurrencies would only grow to consume all available energy. And even if we could keep up with that, it's an incredibly unnecessary waste if you compare all the other uses that energy could be put to. The guarantees that cryptocurrencies give are not worth the upkeep.

And that's all without discussing the other side of the coin - waste heat.

Re:The Wealthy Are Hoarding $10B of Bitcoin in Bunkers by blueprint on Wednesday May 09, 2018 @01:43PM (#17031949)
> Right now we're not able to pull energy from Sun fast enough to power them (see all the global energy issues, fossil fuels, etc.)

Actually there are thousands of other things that take way more energy and pollute way more than cryptocurrency mining. In fact you can locate your miners anywhere, unlike, say, your shipping vessels. So there's an incentive to place the miners next to, say, hydrothermal plants.

Why aren't you fervently arguing for the other orders-of-magnitude-larger polluters to be replaced? Lord knows we have alternatives to them too.

By the way, do you know about Bitcoin's emission curve and what is going to happen to mining after bitcoins are no longer emitted?

> And even if we eventually could, cryptocurrencies would only grow to consume all available energy.

That's a lot of energy! Could you provide some kind of grounds for your opinion here?

Re:The Wealthy Are Hoarding $10B of Bitcoin in Bunkers by TeMPOraL on Wednesday May 09, 2018 @02:02PM (#17032167)
> Why aren't you fervently arguing for the other orders-of-magnitude-larger polluters to be replaced? Lord knows we have alternatives to them too.

Because here I'm arguing against the trend, not just absolute magnitude. Almost every other human endeavour has incentives to reduce waste and upkeep. Cryptocurrencies require ever increasing energy use for maintaining the system.

(Note that I also frequently argue against various zero-sum games in the economy, like advertising, which are yet another unnecessary waste of precious resources. I try to be consistent with that position.)

> what is going to happen to mining after bitcoins are no longer emitted?

Isn't it true that Bitcoin requires continuous energy expenditure through mining to maintain the integrity of the network?

> That's a lot of energy! Could you provide some kind of grounds for your opinion here?

I'm talking about the dream/goal scenario of cryptocurrency advocates, in which cryptocurrencies replace fiat and become the new basis for the entire global economy. And the grounds are that the system is designed in a way that you literally make money burning electricity, so as long as electricity is cheaper than payoff somewhere (or you can steal some), there's strong incentive for everyone to try and burn energy.

Re:The Wealthy Are Hoarding $10B of Bitcoin in Bunkers by ric2b on Monday May 14, 2018 @02:11PM (#17067917)
> And the grounds are that the system is designed in a way that you literally make money burning electricity, so as long as electricity is cheaper than payoff somewhere (or you can steal some), there's strong incentive for everyone to try and burn energy.

Which increases energy costs until that profit gets small.

As long as there is a more valuable use for energy than getting a 0.1% profit mining Bitcoin, I don't see why mining would ever consume all energy, that's ridiculous.