This is a classic pro Bitcoin argument that’s trivially falsifiable.

The fact folks here think their transactions in the online economy should heat their homes is so bananas to me. What is this, the industrial revolution? I mean, I know we’ve got our plague doctor masks on but that’s not intentional.

The first is that scaling Bitcoin up to the size of visa is not particularly possible. You might be able to match visa's throughput by greatly increasing the block interval (e.x. one block every week) but the protocol cannot reasonably scale past a couple hundred transactions per second without taking a massive hit to transaction latency. So, in this sense the question of how much energy Bitcoin would consume if you scaled it up is meaningless, it cannot be scaled up.

The second mistake is that Bitcoin's energy consumption has no relationship with its scale. Say you built a hypothetical MiniBitcoin which was exactly the same except each block was so small they could fit just one transaction, MiniBitcoin would consume almost exactly the same amount of energy as Bitcoin does now. The energy usage goes up as competition between miners increases. The energy usage does not go up as more transactions are processed.

That’s no mistake, folks are suggesting that on a per transaction basis - today - Bitcoin is cheaper or more efficient if you take into account hand wavey externalities not captured in the classical transaction cost model of a payment processor like visa.

What I’ve done is invalidate that argument not by scaling visa down to a single transaction (as that doesn’t capture externalities, per the argument posited) but scale BTC up as the argument is BTC captures all externalities. By then showing that it’s physically impossible I’ve disproved the thesis.

You’re making a different argument about avenues for scaling and that deserves its own conversation.

Good point, you're right, I was forgetting this.

> since the value of each unit would have to increase to satisfy the demand.

I didn't follow this though, what do you mean?

> In a world where Bitcoin replaces gold or visa

It doesn't seem very meaningful to me to talk about energy usage in this world because Bitcoin can't replace visa. To replace visa we would have to make enough changes to it that I don't have much of an idea of what the energy usage of the modified system will look like.

Though let's consider Nervos' NC-Max, which gets a lot closer to replacing visa than an unmodified Bitcoin can. It works by, effectively, massively increasing the block size limit. In a NC-Max world energy usage would still be proportional to the coinbase but the coinbase might stay small because there's so much room in each block that transaction fees stay low.

I should have worded it better, I just mean that if Bitcoin were to replace gold as the primary store of value, the price of Bitcoin would have to rise significantly to absorb the demand, since supply is inelastic. This in turn would increase the environmental externalities.

Since transaction inclusion is a marketplace and since most products we care about will continue to be denominated in local currencies I don't think transaction fees will change much as the price of bitcoin changes.

As the dollar-denominated value of a 0.01btc fee increases people will become less willing to spend that 0.01btc. There might be some stickiness but I expect the kwh-denominated fees will grow much more slowly than the price of bitcoin.

This seems to be a misunderstanding of how mining works. The amount of energy used for mining is largely disconnected from transaction volume. Mining a block with one transaction takes about the same amount of energy (within a few watts) as mining a block with 10000 transactions.

The hope for scaling bitcoin is on stuff like the lightning network and other more esoteric stuff like coinjoin. That being said lighting network could scale arbitrarily in theory, but the security properties depend on being able to tx on the main chain in a timely manner. In the case that there is a wide spread theft attempt on the lighting network we could see many LN channels trying to be closed at the same time and shooting the fees up beyond the attack value.

> you could conceivably implement lightning with classical assets.

Not with the same security properties. The idea of building a money transfer service where you simply have many people with liquidity that transfer IOUs instead of the actual money has been around since at least the 8th century: https://en.wikipedia.org/wiki/Hawala

There was no formal ultimate settlement layer though.

I personally think that we need to continue to investigate ways to push what we trust and eventually have a workable system that actually trusts individual public keys to not double spend on pain of losing their reputation.

Until that happens I'll continue to hold some BTC.

That's not blockchain, and it's not crypto. You can do that right now with literally any asset in an InteractiveBrokers account.

In theory, since there is no notion of a Bitcoin chargeback and no need to extend credit to any party in the transaction, the intrinsic cost of a bitcoin transaction should be lower.

Believe it or not chargebacks and credit are good things. This you can find out if you ask literally anyone why they use their credit card instead of their debit card.

And anyone that "accepts" bitcoin as payment probably takes more than that due to Bitcoin's volatility.

If at the moment of a transaction, 1 BTC = 20k USD and I go to buy something that is $20k USD, it's not going to show up as "1 BTC" on the checkout.. it will probably be like 1.05 BTC.

Also, credit-card companies give guarantees to both the buyers and sellers, so they are providing a service. Buyers get extra protection with extra warranties, ability to reverse fraudulent/deceptive sellers. Sellers get extra revenue with people buying stuff they don't have cash for, and don't have to worry about fraudulent cash/checks etc. Yeah sellers overall take a bit of a hit, but the argument can be made the couple percent is worth it to never have to worry about getting scammed by a buyer.

Anyway.. crypto offers absolutely NONE of that. So comparing it to credit card companies is honestly quite laughable.

The only thing you can try to argue is crypto offers anonymity to a degree? Although it sure seems like you have to jump through a lot of hoops for this to even be true since it's a public ledger...

In my experience the spread is usually under 1% of the 24 avg.

>[...] and don't have to worry about fraudulent cash/checks etc. Yeah sellers overall take a bit of a hit, but the argument can be made the couple percent is worth it to never have to worry about getting scammed by a buyer.

But how are you going to get scammed accepting bitcoin? It's not like it's easy to forge a bitcoin.

And how does that work? For example, the last 24hr bitcoin is up like 10%.. Let's call 5% below the current price the 24hr average.. are you suggesting that the exchange rate is 1% above the 24avg, or 4% below the current price, meaning the seller is eating 4% of the current price? That certainly does not make any sense.

>But how are you going to get scammed accepting bitcoin? It's not like it's easy to forge a bitcoin.

I agree the seller can't really get scammed, but the buyer has --zero-- recourse. So sure the seller loves it because there is no recourse and they can add a nice spread (my first point). But the buyer does not.

Whereas credit cards- both parties get benefits (even if it skews toward the buyer, however that is a good thing, it shouldn't be equal.. the seller has more information about the transaction thus the buyer should have more recourse).

That was based on how I remembered some merchants handled conversion a few years ago. I just did a test with coingate and the spread between their rate and the market rate is under 0.05% (yes that's a fraction of a percent, not 5%).

>I agree the seller can't really get scammed, but the buyer has --zero-- recourse

I don't disagree that credit card protections are good for the consumer. The problem is that there's no opt out (eg. horror stories about people's paypal accounts being frozen because of a surge in donations), and you're forced to use the bank (or credit card company) as the escrow.

You’re also leaving out two steps in your calculus that really tilt the scales. You’re not paid in Bitcoin and your recipient cannot spent Bitcoin, therefore you need to pay a 1-2% fee at origin, $6 for a BTC TX, $90 in electricity socialized across the block reward and a 1-2% fee at destination.

Moving $10,000 USD to CAD on the blockchain is roughly $399 not $6.

but that only covers conversion, right? Or does IB also allow you to send to arbitrary accounts?

>therefore you need to pay a 1-2% fee at origin [...] and a 1-2% fee at destination.

That's only if you use the managed exchange service. If use the trading interface (ie. placing bids/asks manually), it's much lower. eg. 0.5% for coinbase pro[1], 0.25% for gemini activetrader[2]

[1] https://help.coinbase.com/en/pro/trading-and-funding/trading...

[2] https://gemini.com/fees/activetrader-fee-schedule#section-ac...

If you’re sending comparatively smaller quantities then the delta between that and TransferWise is negligible, and it is a one stop shop.

I am not trying to say that Bitcoin solves every problem. I agree with you that there are many problems it does not solve. The $399 number is disingenuous though, you're ignoring that there are situations where bitcoin really does have lower fees than the alternatives.

There may be times when it’s less expensive, although it is also riskier, just ask the dude who lost $400K to the Quadriaga collapse.

Hardware wallets and safe deposit boxes and multisig let you build a system which is far better than storing your money in an unsecured bank and far less vulnerable to theft/loss than the mattress strategy.

This is so disingenuous it's not even funny.

There are so many countries that US residents can't send to without going through a middleman, which takes a cut. Bitcoin isn't for sending money to CAD, which of course you can do. It really shines to sending money to places that don't have nearly as much financial infrastructure.

A regular wire transfer can take up to 3 days and cost 5-10%.

A bitcoin transaction that takes 1 day is cost 1 satoshi per byte. A satoshi is 1/100,000,000 of a bitcoin. Checking a realtime dashboard (https://bitbo.io), a satoshi is worth $0.00019225.

(2) the countries without infrastructure generally can’t afford to be spending even $6 on a transaction. Venezuela’s minimum wage is $2 per month.

(3) Bitcoin isn't for sending money to CAD, which of course you can do.

Funny how it’s always not for the thing I point out it doesn’t work for haha. Nobody can quite figure out what it is for except speculation and crime.

Bitcoin is a non-sovereign, hard-capped supply, global, immutable, decentralized digital store of value. It’s an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally.

After all, Chuck-E-Cheese tokens fit a large part of the definition in part (1). After all they're non-sovereign, limited issuance, global, immutable and decentralized. But you'd be hard pressed to find someone who believes that implies Chuck-E-Cheese tokens are an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally.