The counterpoint to this I'll make is that all financial systems engage in costly signaling.

If you visit a foreign country how do you know to trust whether to trust a specific bank? You probably look at cues like whether it occupies an expensive skyscraper in the center of town? Do you see its ads around town? Does it sponsor the local soccer team? All credible signals that are hard to fake for a fly-by-night scammer.

All Bitcoin did was formalize this process. At any given time there are many chains that all purport to be the canonical history. How do you decide which one is authentic? By looking at hard-to-fake signals. In this case the accumulated hashing power behind the chain. Looking for whoever spent the most hash work is fundamentally no different than checking to see which bankers are wearing the most expensive suits.

Any system with trusted intermediaries will waste resources on costly signaling. The only question is whether crypto mining is more of a fundamental waste than traditional signals, like high-paid bankers and prestige real estate.

> The counterpoint to this I'll make is that all financial systems engage in costly signaling.

Bitcoin uses 600+ kWh per transaction currently. With current use, to process VISA's 1700 transactions per second would consume >36 PWh annually. That's significantly higher than global electricity consumption and capacity. At current US electricity prices it would be significantly over 4.5 trillion USD annually. Global annual banking revenue is under 6 trillion: https://www.mckinsey.com/industries/financial-services/our-i...

> The only question is whether crypto mining is more of a fundamental waste than traditional signals, like high-paid bankers and prestige real estate.

The answer is yes. Incredibly higher.

You are assuming that power used by the network is directly proportional to the rate of transactions processed. I doubt that is a sound assumption.

For example miners use energy to compete for the mining reward which is awarded every ten minutes. I can think of many ways of modifying the network to increase the rate at which transactions can be processed that do not increase this mining reward. (I do not understand why none of those ways have been adopted.)

One of the primary reasons that reward is not lower is probably because the amount was set when Bitcoin was created, and people worry that changing it would set a precedent making other changes easier.

The amount of work is what keeps transactions secure. The difficulty of computation is directly proportional, but the power usage depends on the demand for mining.

Lighting attempts to decrease this load by effectively batching transactions, but its not a huge difference compared to the orders of magnitude differences that exist already.

I don't know. I see the nice HSBC building in my city and all I can think of is that half of the business of theirs is crooked, money laundry, trafficking, drug cartels. No shiny building can change what you actually do.

Does that mean I shouldn't trust the credit union I go to because my favorite branch is in a shopping center?

a building has actual value as opposed to bitcoin simply contributing to the eventual heat death of the universe

Not to mention the employees being able to pay rent and so on.

My #1 reason is that once someone figures out how to build large, reliable quantum computers and program them in a practical way and quickly break sha256, bitcoin might be how we find out. That still seems to be a ways away though, and in the meantime, having a mostly-unbreakable digital ledger seems to be valuable.

AFAIK a practical quantum computer would not enable any practical attack against SHA256.

My main reason is because if BTC became mainstream a bunch of crypto nerds would become richer than many banks.

No way they'll allow that to happen I think.

There's of course also

- deflation meaning anyone who believes in Bitcoin and uses one to buy something is either desperate or a fool

- as well as practical issues like energy consumption

The energy cost is really only a problem for on-chain transactions. Technologies like the lightning network can greatly mitigate that problem.

Doesn't that mitigation introduce more centralization though?

Not that I'm aware of. The lightning network seems to be a fairly decentral affair to me. Still I suggest you make up your own mind by perusing https://lightning.network/

So the arbitration still occurs on the blockchain? Seems like maintaining all these different ledgers adds a lot of complexity when a better solution may be a non-Bitcoin, or even non-blockchain DB.

Sure. But that's still potentially multiple orders of magnitude fewer on-chain transactions than without. I'd call that a quite efficient mitigation.

Not everyone hates global warming. I'll have -30° C tomorrow, give me that warming please.

That's the most ridiculous comment I've seen on HN.

at Starship's $100/kg placing your Eth mining $1000 GPU in space will add only 10-20% when amortized over 100 ton rig - it is comparable with building/buying your own small powerplant what large crypto have done. AI and crypto are exploding and only going more so. Granted, the planet is becoming too small a confines for it. It seems that AI and crypto will be the killer apps of space in near future.

One can also observe that humans have largest, among the animals of planet Earth, share of body energy consumed by brain and the future humans would probably have even higher share. In technology we observe the same - the pinnacle of technology - CPU - have practically 0 thermodynamic efficiency and the share of energy consumed by computers grows, and i think it will be only growing. Intelligence eats the world.

Could you clarify why you think placing crypto rigs in space is a good idea? To run a crypto rig, you need to provide a lot of power and have a mechanism to keep the processors cool. Being in space seems to make both of these substantially more difficult (especially cooling the electronics). It seems highly implausible to me that crypto will be the “killer app” of space.

How are you supposed to cool it in space?

Heatsinks optimized for radiative cooling, which are kept in the shade by solar panels. Works much better when half or more of your surroundings aren't a planet at human-scale temperatures, as is the case on earth's surface.

spacecraft already have trouble venting waste heat without the burden of attempting to mine bitcoins

only because of very constrained weight budget (which is constrained by the high price of delivery into space) so you can't just throw in an AC with a radiator. The radiative power scales with the 4th of T, so it is pretty effective in space if you run the hot end of AC hot.

I suppose there were a lot of arguments about usability and various constrains/impossibilities 30+ years ago when cell phones only appeared at $1+/minute and were available only at a very few places. Yet here we are. The cheap access to space will do the same for various tech-in-space (how about unlimited access to space with fineprinted "cap of 1000kg/month" :).

It'll be orders of magnitude cheaper to just make it waterproof and sink it in a lake.

Or be the company flogging the rigs rather than paying for the flight (insert saying about shovels in a goldrush)

Shouldn't that be a reason to be bullish? Because if the governments step in and enact regulation against Bitcoin mining, that will increase its scarcity and therefore value.

Likewise, if you think fossil fuels will be scarce in the future, you can be bullish on the price of gas, but not bullish on things based on gas.

The number of bitcoins available (disregarding lost/forgotten ones) is fixed at 21M, and the rate at which they are created is more or less constant (by design), so anti-mining regulations will not increase scarcity. If anything, restricting the network hash rate will make the network less secure and thus less valuable

hey an educational moment!

the vast majority of bitcoin/crypto mining uses renewable or otherwise wasted energy and this is the only economical way to do it! you have been intentionally misinformed by the amount of energy used and not the source of energy used. It is completely a red herring to just read a headline about how little electricity a tiny country uses and that mining uses the same amount.

what? "wasted energy"? yeah a lot of energy is lost as it cannot be transported to commercial and residential areas economically. so miners set up processing at the source of the energy and use it. in fact, a lot of it actually reduces pollution creating the polar opposite of what you believe, in those circumstances it is a sustainability solution.

now aside from fighting me about your worldview, this is also an area to remain vigilant about! nation states can absolutely mine at a loss when they turn to competing for control of the cryptocurrency networks for geopolitical reasons. right now it is renewable.

but what about the hardware, the single purpose hardware and e-waste? there is a large trade of "obsolete" hardware, as it is economical to use for people with the cheapest power. this is also another specific area to be vigilant about, by making sure the infrastructure is in place to put that hardware and keep it active, instead of landfills.

I can see that mining is a good incentive to look for excess energy in all kinds of places and make use of it. That's a capitalistic motiv, finding solutions to derived issues, when something else is at the core of the problem. But anyway.

B$ still looks ridiculous, let me explain.

* world electrical energy consumption: ~25000 TWh [1] * bitcoin energy consumption index: ~77 TWh [2]

Bitcoin today consumes as much as 0.3% of the total energy available on this planet.

That's fine, if half the world would use it and would do meaningful things with it.

What is it actually used for most visibly?

As a betting ground with galactic momentum, a technology promising to be the solution to everything, and just outrageous claims that only the bovine left to be excited about.

It's not that the algorithms and data structures are not cool, the certainly are - but we can do so much more today with technology than this.

[1] https://www.vgb.org/en/data_powergeneration.html?dfid=98054 [2] https://digiconomist.net/bitcoin-energy-consumption

And that's a different issue, you are conflating your energy use criticism with an arbitrary meaningful use criticism. Others may be willing to have that argument with you, but I know how those go: Someone says something about another industry's use, you say something about slow databases, they say something about another use case, you say something about why bitcoin/blockchains are not the best solution for that use case, rinse repeat.

The amount of energy without detailing the source of energy is not a valid argument to support any argument you have about why it is being used. Move off of it, or criticize the sources in a more nuanced educated argument. It should be 100% renewable or part of a sustainable solution, not only will you get further in your argument by focusing on the market participants that actually are wasting industry, you will also be helping!

The fact that it is primarily renewable is actually the reason why BTC's energy costs are exorbitant. That energy could be directed toward replacing fossil fuels, thus reducing carbon emissions.

Is that "educated" enough for you?

Can you elaborate? What do you think is happening at say, a hydroelectric damn with onsite computers, versus what could happen?

You see, we have these things called power lines, and, along with the substations, transformers, and other transmission equipment, those make up power grids. We have 3 of them in the US alone.

Now, when electricity is generated, you can transmit it over those power grids, even to places that aren't right next to the dam. You can even store a limited amount for later use.

Ever kWh that gets redirected away from frivolities like BTC can go toward something that would otherwise be powered by fossil fuels.

I thought you were "educated" here? Please do keep up.

The energy loss from power plant to consumer is 8-15%, on premise cryptocurrency mining is using

A) from some sources: Energy that wasn't going to be sent over those power lines

B) from other sources: a hedge against the loss

C) in some sources a combination of both A and B

If you get around to noticing, I have refrained from any snark with you and I wonder how long you will keep that up

Au contraire, I appreciate your "educated" opinion here. I just want to make sure I'm sufficiently "educated," so I can believe the exact same thing you do, with a straight face. If you didn't want it that way, you shouldn't have led with it.

Regarding A), there's no particular reason why that electricity can't be sent across power lines.

B) So what? Send it anyway, and replace 85-92% of the energy use.

So you think that I'm not open to conflicting realities, got it. I am not speaking in absolutes I am simply responding to you. Now you know. I led with an "educational moment" because it still remains accurate that the amount of energy is not a strong argument without referencing the source of the energy. It's not controversial for you to disagree with that, a reality still was and now is with mining included that energy producers opted to not transport some energy across long distances and miners are overwhelmingly using that because it is economical for both parties. You read something else that I didn't say or imply. You keep referring to that, which I was willing to ignore. It's clear snark is important to you, now you got your reaction so I hope you feel satisfactorily accomplished in that regard.

Now let's talk about your unique points than the original person I replied to: places have had decades to send more power over power lines and they didn't. You tell me why that is. I assume there were financial reasons and related impracticalities. But admittedly I have never asked and only react to the reality that energy producers have been receptive to the additional use of their energy for the aforementioned reasons I listed. Their output hasn't changed and to them it is a more efficient use of it. Are they lying? Are they ignorant of alternatives? Just lazy even though their laziness would therefore predate crypto mining?

Either way mining on premise is an immediately applicable economic incentive that simply got you to notice that you didn't like it.

Best case scenario then is that it gets you into action to implement a solution nobody else noticed was applicable. Society might be getting somewhere because of you, that's so exciting.

Yes, very "exciting." I thought we were done with the snark?

Nonetheless, financial difficulties are not relevant. What is relevant is reducing the world's carbon footprint, and that needs to happen ASAP. I, personally, think it's more "exciting" that human civilization might survive another century than to keep track of the solution to some useless, financialized math problem. But, that's just me, I suppose.

Crypto mining at fracking sites does this. The flare gas systems throw hydrocarbons into the atmosphere before the miners arrived, the miners doing a financialized math problem give them the missing incentive to use the energy for the mining computers on site.

Corroborate that with a news source that you happen to like.

Like I mentioned renewable or otherwise wasted energy. This is one of the otherwise wasted energy examples that is a sustainability solution right now, in comparison to wishful thinking.