This means that Bitcoin is a 0-sum game*, and a tremendous waste of resources. At least with gold mining we end up with a material that has important industrial use.
0-sum game: Meaning, in order for someone to profit with Bitcoin, someone has to take a loss.
Of course something only goes up in value if someone is willing to pay more for it, that's true of art, cars, houses, or whatever. You could argue that a house has more utilitarian value, as you could always live there, but that completely ignores the other persons goals. A house isn't going to be much value if jobs are scarce in that area, but bitcoin would still have value in that scenario.
All that energy is going to make sure you can send a large amount of value between two parties from almost anywhere in the globe with a minimum of transaction costs and a decent amount of anonymity.
This also ignores the fact of risk pricing. I live in Backwatermenistan and the political stability and the currency is looking unstable. I could buy a bitcoin from someone else who has one with local currency, I lower my risk of ruin from currency inflation by paying a price that I deem reasonable, the other guy gets cash which he could use to start a business or anything else that's inside his risk tolerance. No one lost in that scenario.
You could just use dollars, euros, or yuan instead. Which is what people currently do in that situation.
Or, be like the mobsters and take payment in goods like olive oil, stolen art, or drugs.
No longer true. I used to believe this as well, but I’ve been blown away by the work from Lightning Network [1]. Subsecond transactions that happen off the Bitcoin blockchain, scales beautifully.
You're being dishonest if you're pretending these things are identically comparable.
Without the full data such a statement is vacuous.
This is comparable to gold, as an increase in the gold price also incentivises increased mining.
Even lightning would only last for a while without new blocks being mined because adding funds to your 'lightning channel' requires a transaction to be placed on the blockchain to open a channel.
Also mining doesn't have to be continuious, it's reward varies with volume to adjust the rate mined so you only wait a looong time if suddenly transaction volume spikes.
That's why gold isn't a currency there are definite transaction costs but the whole of the costs of transporting gold spent isn't required for my gold to be spent. With BTC the whole network supports all transactions and all transactions require the mining network for validation.
> mining doesn't have to be continuious, it's reward varies with volume to adjust the rate mined so you only wait a looong time if suddenly transaction volume spikes.
Mining has to continue as a whole though is what I'm meaning. Because it has not physical value and no ability to transfer without active mining the utility and value of BTC is inherently tied to the act of mining. There's also a hard minimum of active mining where the network remains secure against 51%/double spending attacks.
Whole costs for transporting gold are definitely required to be spent... the gold must be transported from one owner's location to another, unless the escrow between the two parties is the same or you're actually trading ETFs.
> With BTC the whole network supports all transactions and all transactions require the mining network for validation.
This is true for the network as a whole, but not any given transaction. Such a model would mean that the network is topologically fully connected, which would in turn mean that it'd be orders of magnitude slower than it already is.
What I'm trying to say here is that my transaction doesn't depend on the energy required to transport all the gold traded.
We're getting sucked down into the weeds here and losing sight of the original point which is BTC as designed requires the use of massive amount of energy to validate and secure the transaction ledger and that ledger and the things it enables is the whole value of BTC.
If we're going to play that game, where did the electricity come from for your watt-hour-sucking GPU?
A coal plant? How many died mining it? How many got life long illness or injury/disability mining it? How much poverty did the abusive mining industry inflict on poor dependent communities? How many hundreds of thousands of people were affected by it's emissions? How many thousands of cases of asthma? How many deaths?
If we go nuclear : Where was it mined? Who mined it? Who processed it? Where is the waste going? Are you supporting rather despotic countries depending on ore source? Etc
Or the cards themselves. Where did the rare earth materials that go into graphics cards come from? Where were the graphics card parts manufactured, and where was the board assembled? Are you benefiting from near-slave labor for your cards?
I mean, if we want to play that game, there's so much to examine!
https://en.wikipedia.org/wiki/Uranium_mining_in_the_United_S...
"Uranium mining in the United States produced 3,303,977 pounds (1,498,659 kg) of U3O8 (1271 tonnes of uranium) in 2015"
The US. I wasn't aware there were a significant number of uranium mining deaths? I also assume the US can process it and safely dispose of the waste. No despotic countries of course.
China is a tough one though, I don't know how we justify it.
"Canada–25% Kazakhstan–24% Australia–20% Russia–14% Uzbekistan–4% Malawi, Namibia, Niger, and South Africa–10% Brazil, Bulgaria, China, Czech Republic, Germany, and Ukraine–2%"
So we can toss in the blood diamond / African blood uranium comparison, 10% of American uranium comes from Africa.
But we also have the despotic nation of Russia, so by using uranium you're in some part enriching that anti-liberty mobocracy.
Pointing out that diamond mining is also not without externalities doesn't mean d0lph is an exponent of Bitcoin mining.
I strongly doubt the intention was to waste electricity, more likely it was incidentally designed that way, as it's difficult to conceive how you could create such a decentralized cryptocurrency without proof-of-work (at least at the time).
At least gold & diamonds are useful
For example - over history gold has been mostly considered pretty, but not exactly high value. It was only through trade it became representative of value (of the goods).
Its use in jewellery I would say is just an extension of its use as a store of value; it is desirable because it is valuable. If we simply wanted a lustrous metal (as may have been an early factor in its adoption as a commonly traded precious metal) we now have many inexpensive ones to choose from -- aluminium, chromium, etc.
Everything in the world is scarce (non-infinite). Just because something is scarce, does not mean it's valuable.
I think an interesting difference between cryptocurrencies and precious metals, is that to some extent they can be redefined by consensus of the network, or split consensus (e.g. Etherium and Etherium Classic). So I'll concede that they don't even strictly negate the need for trust in their integrity.
https://upload.wikimedia.org/wikipedia/commons/e/e3/Gold_pri...
Even for assets with industrial applications, there's a risk that it may be replaced with something else, or made cheap (e.g. synthetic diamond; aluminium was a precious metal before electrolytic production; asteroid mining?).
I agree with your comparison of Bitcoin to tulip bulbs. Just because Bitcoin is used as a store of value doesn't mean it's wise.