I can memorize 20 words and cross whatever border I want with $100 million in my brain, and full confidence that that money is mine. That's pretty damn cool.

> I do support some form of decentralized currency. Not because people are ever going to be smart enough to be their own bank or because I think some currency will magically topple governments and financial structures, but mainly so people can transact without overly-censorious middle-men who take a cut while adding nearly no value.

It sounds like you're projecting what you think Bitcoin should be.

> We have the internet, now. Payment networks should have died years ago. I'm glad this problem is being worked on. However, it's possible to solve without using a country's-worth of energy to support a pathetic ~10 transactions per second.

10 transactions per second on the L1 network (averaging $10k-20k each), and many thousands possible today on L2. Plus a way to securely store the transacted value.

To argue that a small country's worth of energy being used to secure Bitcoin is a poor use of resources, you really have to consider how much energy the worldwide banking system consumes in all its complexity to do the same thing. I don't know how to do that calculation, but my point is there's more to it than you're seeing.

You have to also consider which energy is being used. Dirty energy is certainly part of it. But a lot of the energy used is through geographic renewables arbitrage. For example, there are hydro power facilities in China that were built and never fully utilized or connected to the main grid. You can set up miners nearby those facilities to use the surplus energy, and as long as you are connected to the internet, you're good to go.

It's also a potentially great incentive for governments to start NEW renewables facilities, because they have a way to use the surplus power until their populations grow to use the full capacity of those plants.

Technically the brain is just another layer of encryption to the data. And that level of encryption can often be solved by the purchase of a $5 wrench.

No, you can have 30K BTC in your brain, but unfortunately the USD value fluctuates so wildly that as a store of value, it's useless.

> It sounds like you're projecting what you think Bitcoin should be.

Probably, yes. Bitcoin is a failed project. It spawned many others, some of which may be successful. I am interested to see how they do.

> To argue that a small country's worth of energy being used to secure Bitcoin is a poor use of resources, you really have to consider how much energy the worldwide banking system consumes in all its complexity to do the same thing. I don't know how to do that calculation, but my point is there's more to it than you're seeing.

That's assuming that banking is JUST storing and sending value. Banking does a whole lot more. I understand the drive behind taking that power away from banks, but it's just not going to happen until one can fluidly exchange USD for some for of highly-stable distributed currency. And once that happens, banks are still going to exist and handle most of the transactions! Please, take a stroll in r/cryptocurrency or r/bitcoin and see how many people are whining about how their private key got lost or stolen or etc etc. Banks exist because they not only store value, but protect it in numerous ways. They will continue to exist past whatever cryptocurrency-revolution people envision.

> You have to also consider which energy is being used. Dirty energy is certainly part of it. But a lot of the energy used is through geographic renewables arbitrage. For example, there are hydro power facilities in China that were built and never fully utilized or connected to the main grid. You can set up miners nearby those facilities to use the surplus energy, and as long as you are connected to the internet, you're good to go.

Great? So a fraction of the energy would have been wasted anyway. Fine, use that for bitcoin mining. For everything else, it's pouring carbons into the atmosphere so idiots who don't know how investing works can leverage 100x on margin while the exchange they're betting on is manipulating the price to call their bets and wipe them out.

> It's also a potentially great incentive for governments to start NEW renewables facilities, because they have a way to use the surplus power until their populations grow to use the full capacity of those plants.

Really? "Let's buy a bunch of toxic waste and dump it into the river because the government will be incentivized to not output toxic waste" isn't the best argument for why bitcoin is useful.

Yes, for those amounts. But for several purposes, unfortunately most of them 'evil' (money laundering / terrorism), this works fine. I know it's used a lot for people in countries where getting currency out above a certain threshold is very hard unless you are at the highest level of corruption with great success. They are not so bothered with losing a few 1000$ by fluctuation as their goal is getting it out and converted to something else (safer) (USD/EUR) asap.

Tomorrow, who knows. if North Korea or Russia or China turn half of the US into a nuclear wasteland, the banks are unlikely to function very well for those who remain. There are hundreds of such scenarios that could play out in the next 50 years -- Bitcoin is a great disaster hedge, if nothing else. Everyone should have 1% of their portfolio be crypto, IMO.

The criticisms of its fluctuation are valid, but like you said, there are plenty of people today for whom the fluctuations are tolerable for their use case. As the fluctuations get less, it will become tolerable for even more.

https://makerdao.com/en/whitepaper/

It's an Ethereum-based scheme that's tied in value to the U.S. dollar. That sounds good. The methods to achieve that look... complex... to say the least. If they work, then there's at least one of them that's stable so long as there's no serious problems in it and/or Ethereum. Well, that sounds promising. ;)

It's a bunch of math that uses market mechanisms to try to solve the problem of stability when the only real answer for the question "how do I stabilize a cryptocurrency" is "for each unit you issue, you have a bank account with $1 matching USD in it."

Maker essentially banks on the fact that a bundle of cryptos (ETH and a few others) will not drop past a certain amount in relation to USD over a given amount of time. They've been correct, so far, but that doesn't mean there won't come a time when the markets drop past whatever magical threshold they've set.

I'm not putting down the project, I followed it closely for a while and a lot of work went into it. My point is you can't really have a stablecoin unless you have the USD to back it up.

An interesting plot twist will be if Maker derives from other stablecoins (ones backed by USD reserves, like GUSD) and not ETH.

Circulating supply fluctuations don't seem to have much of an influence on crypto prices (as seen with quarterly Binance Coin burns for instance)

That is a big "if". Stability is a principle which has been tried time and again in fiat money and failed. Too many times to count. See GBP peg etc. for examples.

If something is unstable, it is because the market deems it to be. Adding an artificial support goes against that same market.

Cryptocurrency circles like to talk about government control being a bad thing. But in the same vein cheer stablcoins which exert near similar control - by algos or by adding coin supply. They want to have their cake and eat it too.

From an outside perspective, I don't think it's worth continuing the discussion as is. Perhaps you should both come back in a few hours when everyone is a bit calmer.

No, this is an important distinction. Bitcoin isn't liquid enough to count as actual money and proponents of the idea that sending bitcoin is the same as sending money are glossing over the cost to buy bitcoin, and the cost of transferring it back to actual money on the other side.

Having access to 30K BTC doesn't do you much good if nobody is willing to trade you goods or real money for it on the other side.

Seeing how Americans Elected Trump, I can't imagine the USD being better than BTC over 10 years.

Objectively? No, I'm pretty sure that isn't "a complete fucking waste" to the people who are benefitting from it. Which is literally the definition of "subjective."

Removing externalities of electricity pricing solves this. That's the point. If a kilowatt of electricity usage costs enough to offset its environmental impact, then who cares if a tiny minority of people are doing some wacky confusing things with their computers?

The day that markets actually price externalities into the costs of goods and services, whether by benevolent owners or force of regulation, I'll gladly declare Bitcoin useful.

This sounds very much like you've decided that you don't like Bitcoin (and that's fine, with good reasons) but you have rationalized it with an argument that is almost certainly inconsistent with the rest of your worldview. Bitcoin isn't any more bullshit than countless other systems/goods, the argument based on environmental externalities is a very weird reason to draw such an absolutist line given all the other (arguably) bullshit systems that incur the same costs.

Either we have a fully managed economy (which I'm pretty sure the historical consensus is clear on) or it has to be guided by attaching costs to externalities.

All this is doing is just picking on Bitcoin because people don't like it. There is no principled economic or environmental argument here, just a biased rationalization applied inconsistently.

It doesn’t make sense to make the environmental argument for things that you consider wasteful, but not for other things that other people may consider wasteful.

Yes, I agree that my argument would be completely irrelevant if only something that will never happen happens.

Until then, I'd rather see some form of distributed currency that doesn't rely on pissing finite resources away to function.

I get where you're coming from, but our planet is at a critical point right now objectively. Pouring pollutants into the atmosphere so people can play with FunBux is an incredibly stupid use of resources. Yes, markets should price in externalities. That would solve SO MUCH MORE than just bitcoin's energy usage. But unfortunately that concept is at odds with market capitalism, and as such, I believe my critique of bitcoin stands. Markets are not rational, prices are not accurate, bitcoin is a polluting waste of energy.

Say you don’t care much about professional sports. Of course you would think that any innovation that reduces the energy requirements of professional would be great (more efficient arena lights, climate control, etc.). But I think it would be inappropriate to single out sports as a waste of energy, because it is only a “waste” because you don’t happen to receive and of the benefits.

That’s why we have environmental regulation, as imperfect as it is.

This implicitly means a society does make choices about how energy is used. Therefore, a discussion about societal priorities amongst individuals is essential.

Likewise with regulation related to finance and money.

Energy and money. Among the most highly regulated things in all societies.

I agree with the poster that POW cryptocoin systems are a shocking waste of electricity.

In addition, the only use cases that have proved viable are illegal or highly destructive to the social fabric.

When you look at the sheer amount of money transferred from losers to winners, it’s clear that this is not a benefit to anyone. The scams, the hacks, the thefts. Bitcoin and it’s ilk are parasitic systems that weaken the host.

To compare to Ferraris, well Ferraris are a niche product, are already regulated, and have a historical component that accounts for their hedonic properties.

To compare bitcoin to hello kitty backpacks is just a category error, which belies that the argument is disengenuous.

As for the stuff about cryptocurrencies being associated with scams and wealth inequality, to me that’s entirely independent of environmental impact and should be dealt with (and probably can be dealt with using existing laws) regardless of the environmental impact.

I guess the issue I have is such a tiny minority of people are using such an excess of energy to do something that adds very little value to society. Even if the value of bitcoin is subjective, there's still a tiny minority of people consuming vast amounts of energy to derive what value it does bring them.

It just feel disproportionately harmful at a time when our top scientists are blue in the face from telling us to reduce carbon emissions.

I understand that it's not my place to judge what people derive value from. I also would argue that energy should be neutral (similar to my views on internet access). I guess my biggest gripe is probably something you and me share in common: the understanding that market mechanisms allowed this waste to happen in the first place. So you're definitely not wrong, and your argument about externalities is well-taken.

The same could be said for people changing their behavior because you complain about it on a message board that the people in question don't even read. Nobody's going to stop using Bitcoin because you don't like it, so why bother?

That said, I think the cryptocurrency world is moving in that direction anyway. Most of the more exciting new cryptocurrencies use non-PoW consensus mechanisms, eg. IOTA = tangle, Ethereum Casper = PoS, EOS = DPoS, Stellar = SCP. And there's a strong economic incentive for that: when you reduce the cost of computation, you can use those computations for more applications, which drives adoption, which increases the value of peoples' cryptocurrencies. The challenge is that the fundamental benefit cryptocurrencies offer is computational trust, so until people are confident that these other consensus mechanisms are at least as immune to attack as PoW is, they're unlikely to switch away from Bitcoin.

Perhaps someone who did actually read what I wrote will realize that there are many, many things that do what Bitcoin does without the power usage of Bitcoin and perhaps seeks those as an alternative (like, PoS coins). And originally, the argument was "this is an environmental crisis," someone said "no it's not because of ferraris and backpacks," and I countered and said, yes, it's an issue. Why does anyone argue on an internet forum? I guess in the hopes of changing minds. I hope you would not find debate a waste of energy, at least not in a democratic form of governance.

> until people are confident that these other consensus mechanisms are at least as immune to attack as PoW is, they're unlikely to switch away from Bitcoin.

Yeah, that's the real meat of the argument, I suppose. We know PoW is at least difficult to attack. I am very happy that other consensus mechanisms are being explored though. I'm also not convinced existing non-PoW consensus mechanisms won't be as secure trust-wise as PoW.

I guess the overall point of this is that, yes, there's nothing I can do about people doing horribly wasteful things. But let's not pretend that bitcoin isn't horribly wasteful. Let's call a giraffe a giraffe. And maybe it's ok to be a giraffe if you're aware of the trade-offs, but it's certainly not a gazelle just because you're uncomfortable with the properties of giraffes.

You just proved their point. The beneficiaries of Bitcoin – like you – have a subjective viewpoint. You are few, and, objectively the cost to the stakeholders (inhabitants of Earth) is disproportionate to the benefit to the shareholders (the relatively few people who hold Bitcoin and actually profit from it). Objectively, it's largely a method to siphon real wealth from many to few, bearing a striking resemblance to Tulip Mania. That doesn't mean that all crypto and blockchain tech is somehow inherently evil, it's just not doing a lot of public good in this particular incarnation. One can argue it does the opposite by facilitating criminal enterprise.

Your point about externalities is correct but moot, as no one is successfully passing on the full cost of electricity production to the consumer.

That's a different claim, and I agree with it. In fact, the entire point of my comments in this thread is that I want environmental regulations that internalize all the costs of energy usage.

nearly no value = many more transactions per second for much less energy cost.

It's only an artificial limit of Core fork of Bitcoin.

Increasing it to 10 000 transactions per second doesn't use more energy for mining. https://www.reddit.com/r/btc/comments/7nn5wa/bitcoin_cash_is...

Oh wait, you're bringing sin into the argument. My bad, I thought we were being rational.

And just a side-note, it irks me when people say that bitcoin uses as much energy as the country of Iceland like that's some kind of horror. Iceland is pretty damn small, with a population smaller than the mid-sized city I live in.

If the purpose is to limit environmental impact, why are we choosing by subjective value instead of actual impact?

You're just describing capitalism there ;)

That said, I don't think a complex economy can really operate very well without some form of market (at least not until we're at 80%+ automation). And with markets come waste.

I guess I'm not saying anything should be done about bitcoin, but rather that I personally believe it's a complete waste of energy when there are already many better alternatives.

does this number include off-chain transactions?

This is begging the question.

Great! I look forward to seeing your solution in action.

I said it's possible. I didn't say it was easy. That said, PoW on a small scale is an interesting experiment. On a large scale, it's a horrible way of allocating energy usage. So while the databases running on PoW are working, they are a stupid waste of energy.

I welcome any alternative.

I think it's more accurate to talk about the amount of value the Bitcoin network is storing than the transactions per second.

Bitcoin currently has a market cap of $68B. I'm not aware of any other distributed system that's worth that much money. It's definitely interesting that a fully distributed system has been able to achieve that valuation without any centralization or governing authority (debates over developer and miner power aside).

Market cap is a farcical number to look at for a thinly-traded asset on unregulated markets. If I make my own new cryptocurrency, print 100 million tokens, and then talk my friend into buying one for $10, does that mean my token has $1 billion market cap?

No it isn't. The market cap of bitcoin, which is a bullshit number anyway as already explained, is dwarfed by other forms of distributed wealth storage such as (but certainly not limited to) old fashioned pieces of gold. Gold is distributed. If you revise your assertion to be distributed and digital then perhaps you're correct. But the more qualifications you tack on, the less impressive your claims to fame become.

Don't bother mistaking me for some sort of gold bug either. Real Estate is another form of distributed wealth storage that blows bitcoin's pathetic market cap out of the water.

Hi can you let me how I can immigrate out of my country with $10e6 without thieves at the airport taking my wealth? If we can figure this out, man bitcoin is totally KIA. Also can you let me how how I can costlessly assay gold when I accept it as payment? or make the supply of gold only dependent only on time and not how it currently is (price and time)? Whenever the price of gold goes up, they mine more of it :C this makes its Store of Value property worse than bitcoin. Looking forward to your reply and our future endeavor together. /s

Even if you could somehow do this, you would be incredibly vulnerable to extortion, and I doubt you would actually really want to do this even if you had the capability. There are people that have significant wealth that exists outside of "official" legal capacities (drug lords, dictators of small nations, etc.). They have to spend incredible effort on maintaining security of their assets. Pretty much the only thing that works is giving an army of people a better deal than they can get from someone else to steal your wealth from you.

You already can: bitcoin.

>I doubt you would actually really want to do this even if you had the capability

If I'm a Jew in 1930s Germany or a grocery store owner in Venezuela and I see the writing on the wall that my government is constantly deriding me, saying I'm the scourge of and leach on society, I'm going to immigrate out of the country. They've banned all institutions from services me, I benefit from having access to a means to store wealth that's independent from a government. To disagree is to be excessively myopic and optimistic.

I didn't disagree with any of that. My position is that if you are actually in that situation, bitcoin doesn't help that much, and no technology can. If you attempt to actually execute this plan, the risk is extremely high that you will be detected, and a corrupt government doesn't have any shortage of ways to force you to comply with whatever they come up with.

Are there any examples of a Venezuelan moving a significant amount of wealth out of the country via bitcoin?

But judging by the trade volume in Venezuela, they're clearly using it for something.

https://www.cnbc.com/2019/02/14/venezuela-crisis-bitcoin-tra...

https://cointelegraph.com/news/how-venezuela-came-to-be-one-...

I guess you mean "how can I violate capital control laws"?

You're supposing that the vast majority of people using bitcoin are using it to exfiltrate money out of countries. That niche application is very far from the reality of what most bitcoin advocates are doing.

But yes, digital exfiltration may be easier than physical smuggling. That's supposing a lot about what forms of control are implemented in that country at at it's borders.

It's a single example of the value of decentralized property rights. Say I'm an alcohol maker in Sharia-law country, I want to be able to make wine but prevent the state from expropriating my wealth because they ban alcohol. Say I live in a country which mandates that all business ventures with returns less than 2% a year will have their profits stolen (read: inflation) I can use bitcoin to escape that oppression.

The moment Bitcoin becomes a viable way to subvert the state, they'll just change the laws. And if people actually start using it to smuggle money internationally the feds will get involved. The entire idea that Bitcoin can subvert the state is absurd.

And if you don't believe me, look at the evidence. ICOs got regulated. Silk roads got shut down.

And furthermore, while it's convenient to use oppressive regimes as examples for this Bitcoin "feature", it's way, way more likely the 1% (you know, the people who actually have money) will use it to hide their wealth from wealth redistribution policies demanded by liberal democracies.

Does that sentence make much sense? Government decrees don't eradicate goods, they create make black markets.

>if people actually start using it to smuggle money

If? People already use bitcoin to evade capital controls in China, Venezuela etc

>the 1% will use it to hide their wealth from wealth redistribution policies demanded by liberal democracies.

You're confusing equity (something you own) and equality (rights that you have). Bitcoin promotes equality (each client has the same rights). Arbitrarily making certain people unequal (different people have different rights, some have their wealth stolen, some don't) always leads to more inequity. Voting about who to steal from doesn't legitimize theft. If people who generated wealth through voluntary exchange want to protect their property rights from theft, I won't deny them that. Agents who use the state to expropriate wealth through artificial privilege (the real enemy here) want to perpetuate the existing system, not encourage a neutral rights network such as bitcoin.

> Does that sentence make much sense? Government decrees don't eradicate goods, they create make black markets.

Your argument is that Bitcoin will let you subvert existing state monetary policy and other regulations. My argument is that once that happens on a significant scale, states will change their policies and enforce them more or less with state violence.

A good example is anonymous payments via a tumbler. As soon as these payments start seriously foiling law enforcement, states will outlaw tumbler services. If that doesn't solve the problem, and the problem is severe enough, they'll outlaw Bitcoin. The way they would do that is to outlaw exchanges and pursue them over Tor the same way the pursue dark web markets, by enlisting banks, employing cyberwarfare and other espionage, and ultimately with on the ground law enforcement.

It's very, very hard (maybe impossible) to solve a political problem with technology, unless that technology is weapons. It's immoral in a democracy because it by definition subverts the will of the people.

>> if people actually start using it to smuggle money

> If? People already use bitcoin to evade capital controls in China, Venezuela etc

I mean "on a significant level minus state actors".

> equity vs. equality.

I think if you're a "taxes are theft" person then we have deeper disagreements, because I'm a "property is theft" person. But those antipodes aside, Bitcoin no more promotes equality than regular currency does, in fact there are lots of services that only let you do certain things with certain account balance amounts.

Furthermore, I have no idea what you mean about a "neutral rights network". Do I get to vote on things because I hold Bitcoin? Did I miss the votes on various forks? Does my vote count equal to one of the Winklevoss'?

I think the exact opposite is true. Not only is there no voting, but holders of lots of Bitcoin (which you can only accrue with actual currency or mining, which you need to spend actual currency to get the equipment for) have far more power over the Bitcoin network than I do. I have no idea what "rights" you think I get through Bitcoin, but I'm pretty sure the answer is "none".

EDIT:

Also, come on, I'm fine with "crypto" meaning "cryptocurrency" now, but it absolutely doesn't mean that "cryptography" means "cryptocurrency" now. This is a hill I am willing to die on.

There's also an issue of debt differences. One of the big 'benefits' of inflation is that it makes old debts worth less. This is a major incentive for pursuing investments on debt. Not only can you see investments on money beyond what you presently have, but the debt that you took on becomes worth less - meaning it takes a smaller share of your profits each year assuming the principle is not growing. For instance during the government auto bailouts Ford took on a loan for billions of dollars of debt from the government. The interest rate on that loan is sub-inflation. Unsurprisingly, they aren't paying it back since each year it becomes worth less, and given enough time, it will become worthless.

By contrast when a lower income individual takes on debt, it's often 'consumed' such as in the case of education. And the debt becoming worth less over time is not true if an individual's income is not keeping pace with inflation. And another big issue is that lower income individuals are also often going to be seeing rather high interest rates on their loans further diminishing any theoretic benefit of inflation.

---

This is not to say inflation is bad. You can create a comparably negative argument against deflation. I don't really have much of an opinion one way or the other. We've seen how depressive systems can end. And while our current inflation and debt driven system has not yet collapsed, it's not looking as stable as it once did to put it very mildly. I think in 20 or so years (and especially once the petro dollar is 100% dead) we'll have a much better idea of the pros and cons of each system.

Given that some forms of cryptocurrency can be stored using only a memorized passphrase and nothing else, (ie. a brain wallet), it's pretty much guaranteed that getting cryptocurrency put of the country would be easier.

Most cryptoanarchists are deluded nerds who would fold in less than 5 minutes of waterboarding. Do you think these thugs who are willing to look up your ass for a few pieces of gold aren't willing to violate you in other ways? Of course you don't believe that, you've merely failed to seriously consider that possibility.

The only reason smuggling BTC sometimes works right now is because they're not looking for it.

Then you were refuting a position I never espoused. My point wasn't that gold is easier to exfiltrate, but rather that BTC isn't necessarily easier to get out. If the border agents of the tyrannical government you're fleeing know you to have wealth, and are informed about bitcoin, they have many options available to them to prevent you from leaving with your wealth, including simply forbidding you from leaving at all. At that point, you'll have to smuggle your body out, so smuggling a few pieces of gold along with your body isn't a huge inconvenience.

If on the other hand the border agents don't know that you're trying to smuggle wealth out of the country, then it shouldn't be to hard to get through the border no matter what method you choose.

The one scenario in which BTC seems clearly superior is when the border guards are simultaneously alert but ignorant. Looking very carefully for money, but totally oblivious to the possibility of BTC. This might work during the present, but don't count on this remaining true forever. If enough people start using BTC for this, tyrannical governments will wisen up pretty quick.

1. The government doesn't know you have any money, but you are targeted in a random search.

2. The government does know you have money but doesn't know how much. Simply give them X out of Y cryptocurrency keys. They won't know you have any more.

I don't know how much exposure you have to tyrannical regimes, but they aren't as efficient as you seem to think, in that they don't really have much grasp on how much money people own, nor are able to find out instantly.

They also do care about how they are perceived and aren't going to grab some tourist and with no proof whatsoever, torture him to death because he might possibly have some cryptocurrency.

Gold is fantastic. Apart from its physical properties, we all agreed to assign value to it and it's been working for thousands of years.

But wouldn't it be great to have gold in a digital form? Something easily divisible and transferable, yet as gold is, not dependent for its value on some 3rd party? Something that is truly yours not just IOU. Which can keep value.

Forget about Bitcoin, how would you envision something like this?

Apart from technological problems, we have a problem of initial trust and distribution. Please stop here and think for a moment, this is a hard and interesting problem. I'm not saying you can solve it with a few minutes of thinking but just after a few moments some things clarify.

Now imagine we do have it. We did it. Because it would be a cool future where we do have this digital gold. Is it a safe storage of value? What if some better digital gold 2.0 comes along? If people would prefer to move their wealth to it then the 1.0 would become less desirable, so its value should drop. But if it does, then it's not a good storage of value after all.

You can devise a system in which 1.0 tokens can be exchanged to 2.0 but then you cannot change the initial distribution.

If all that thinking is not enough, it is interesting to ponder impact of an actual perfect storage of value system on society. Wealth can be leveraged to generate more of it.

Not that it's something completely new, we had a few close enough matches throughout the history. That's what most wars are about. Although it's easier to go get something if you know where it is.

Bitcoin just needs electricity.