First it was a revolutionary currency, which would replace fiat with a deflationary alternative. Then it was a revolutionary payment network which would displace evil incumbents (despite being fundamentally unsuited to this task). Then it was for micropayments. Then it was for selling drugs and doing things governments don't want you to do. Then there was the lightning network which would make it super fast and super distributed at the same time, solving all known problems by this time next year (in 2015). Then it was for transferring money across borders. Then it was a revolutionary technology called blockchain for building apps on top of, who cares about the currency. Then it was for tracing assets and proving ownership of every asset in the world with blockchains. Then it was for smart contracts - we're going to replace the law with the blockchain. Then it was going to the moon (in 2017), and who cares what it is used for, or even if anyone is using it, because it's going to make us all rich baby - we still appear to in that last phase because nobody seems to know or care about the value of it, only the price.
With apologies to Oscar Wilde, we currently seem to know the price of everything, but the value of nothing, and the rising price is what is driving current interest in Bitcoin, nothing else.
Bitcoin never tried to be law, that's eth and other similar centralized scam blockchains. Being as it's "only" 12 year old money, Bitcoin does evolve and adjust as its users govern it via running their own nodes. Until 2017, major companies (miners/payment processors) tried to fit all kinds of narratives on it (as you mention) but it became clear that they COULD not make bitcoin what they wanted it to do.
Meanwhile users did a soft fork with segwit and kept the blockchain as small as possible while allowing Lightning to be developed on it. This means the decentralized network wanted to keep being sound money, keep being censorship resistant, decentralized and still be scalable.
Lightning Network is a very solid success, used amongst early adopters, major exchanges joining (Bitfinex, Kraken, OKCoin), multiple VISA backed startups building rewards programs and remittance applications on it.
Unlike a typical tech startup Bitcoin does not need to trick everyone to use it and get as many investors as soon as possible and figure out something later. It is what it is. It does not force anyone to join it or spend a single thought on it unless they choose to. It's completely voluntary.
While I understand the skepticism (which just comes across as "salty" as they say) one should consider a simple web search to see how Bitcoin adds value to financially underserved people, allows politically censored organizations to take donations anywhere in the world and protect tens of millions of people from rampant inflation in most of the developing world.
Why would that matter? The problem is the huge amount of greenhouse gases getting released because of this store of value. Whether it makes some economic sense or not is irrelevant to the discussion of whether it should be allowed to continue on environmental grounds.
You could invent a dramatically more efficient way to calculate hashes - after a short period of readjustment, the network would go back to consuming just as much power as it does now.
You could find a way of generating power more cheaply. The network will then use much more of it.
Energy requirements continue to grow until an equilibrium is reached. That equilibrium occurs when the energy cost to mine new blocks is commensurate with the value received from doing so.
However, miners who can externalise their energy costs will generally outcompete miners who cannot. Incentives to damage the environment and avoid taking resposnibility are built into the system.
Really, you mean the huge amount of greenhouse gases we release here in Iceland where our energy is entirely from renewable sources and we mine 11% of the bitcoin network?
There are many things that people actually need which could be done with that energy, but that would probably bring less money than burning it away on Bitcoin.
And make no mistake, these things are still being done, just soemwhere else in the world with more polluting energy. The energy supply of the world is limited, so mobile use cases will often move around.
You do realize that transmitting power via cable means moving it through large bodies of salt water (the ocean) that contribute to huge losses in EMF resistance. Not to mention a power cable from Iceland to anywhere else in the world would be 2x as long as the longest power transmission ever created.
It's more scary for me to realize you actually have no productive ideas for a country that mines BTC from renewables but STILL think you're insights are correct.
Did you know what we do with the electricity here before mining was popular?
Alcoa Aluminum smelting, Ever check out the environmental impact on smelting?
I'll add that I specifically mentioned scientific data centers, supercomputers, which would be much less affected by lag than an AWS region. For the power transfer issue, I specifically said that attacking the problem would mean being at the forefront of research on the matter.
And it is not my place to have productive ideas for how a country could use its natural resources. My claim was that bitcoin mining should be stopped as soon as possible, as it is driving an overall increase in power needs for the entire world, at a time we should be looking for every possible means to reduce our energy consumption. You came and brought up the extremely singular case of Iceland, as if it disproved anything. It's not like Iceland's economy is dependent on bitcoin, it's an extremely new industry that is not making a huge dent, while consuming more energy than the whole country's housing. In the end Iceland is irrelevant in the discussion of Bitcoin's impact on the world.
[0] https://www.aljazeera.com/features/2019/4/15/iceland-is-a-bi...
[1] https://grist.org/article/bitcoin-gobbles-up-clean-energy-ju...
[2] https://www.mprnews.org/story/2018/02/14/iceland-bitcoin-ene...
As someone who lives and works here I can assure you there is absolutely no environmental group fighting the expasion of btc mining here in Iceland, we are however viciously fighting the increasingly destruction tourism influx that has been happening since 2012. It does far more damage that the dams that were built here well before btc mining even existed.
>while currently not paying much of anything to the local government[2] and hiring next to no people, like most tech industries.
This is also untrue, construction and remote hands as well as grid infrastructures resulted from them, the companies that run the facilities also incorporate here and pay corp and employee tax here.
>And it is not my place to have productive ideas for how a country could use its natural resources. My claim was that bitcoin mining should be stopped as soon as possible, as it is driving an overall increase in power needs for the entire world, at a time we should be looking for every possible means to reduce our energy consumption.
If you followed your own citations you'd see one of them linked to https://digiconomist.net/bitcoin-energy-consumption which shows est electric consumption going back as far as 2018. Notice the graph has not really changed since 2018 (since the last halving).
>You came and brought up the extremely singular case of Iceland, as if it disproved anything. In the end Iceland is irrelevant in the discussion of Bitcoin's impact on the world.
Again your OWN source has Iceland listed as one of the top mining locations in the world of course it's relevant. I've even read estimates that 40% of bitcoin mining is coming from renewable sources, most during off peak season where that electricity would be wasted otherwise.
You want to solve the energy efficiency problems of the world? Good, begin by linking the disparate energy grids amongst the world to eliminate peak usage and off peak waste, you'll save far more electricity just by that way.
Not by knee-jerk "I see no value in this so it must have no value" vague emotional appeals on the internet. All I see is you vaguely groping for why it should be treated differently than any other form of industry or innovation while insisting all the rest are somehow necessary and this not. You're not even consistent in your reasons from reply to reply.
Oil companies capturing the wasted natural gas, Hydro dams capturing the wasted water energy, etc. Bitcoin is a battery or energy credit where areas with abundant energy can benefit from their standing in the world and benefit the people of the region. Bitcoin has its ebbs and flows but eventually balances to where your typical american household cannot afford to mine bitcoin and profit.
The cloud computing companies and EV companies and every other company that spends large amounts of its budget on buying electricity is doing the same thing. The difference is that (at least some of) cloud computing or driving is doing useful work with the energy being consumed, whereas 100% of energy going into bitcoin mining is simply getting converted to bitcoin, a speculative asset, and heat.
And the greenhouse gases are the largest problem the civilized world has ever faced, they are not some small aside. We need to figure out ways to produce less energy while still powering the important parts of our economy (transport, production of goods, research etc). Bitcoin is doing the opposite - it is creating a need for more energy production to create and exchange money, when we already have much more efficient ways of creating and exchanging money (the whole banking infrastructure of the world consumes less electrical energy than bitcoin, while doing orders of magnitude more transactions per second than bitcoin can hande in a year).
yea is video games useful work?
youtube videos perhaps?
twitter?
It's nice that you have a sliding scale of what utility is that only you can define, you seem completely trustworthy.
But it is true and I pointed that out that there is a lot of waste going on in the cloud as well.
why?
Money is only useful in so far as it can buy the things that people need, but making those things still requires energy in addition to money. Burning energy to make money when you can literary just will money into existence is completely absurd.
> Because they bring enjoyment to people, and all that truly matters is the happiness of people.
my response was actually the politest way I knew how to respond to someone pulling argument after argument out of their backside without any introspection whatsoever.
I honestly think they're just trolling at this point.
Calling me a fucking moron without anything at all to add, after I took the time to reply to your 1 word comment (or to someone else's comment? I'm not clear if you're mr_woozy as well or not; I'm not leto_ii) then I have nothing else to add.
Oh, and accusing me of spewing inane generalities when the real value of art and entertainment has been called into question and vindicated throughout all of economic theory is quite rich.
This is completely circular login, if you're valuing those things as purely economic goods then you're ascribing a monetary value to them, which you could just as easily to bitcoin mining, startups and associated industries.
>and all that truly matters is the happiness of people.
This is the laziest argument I've seen on how to measure relevant value, I mean if I'm a murdered them murdering people is going to make me happy, so what does this argument even mean?
Should Bitcoin allow USD to continue? We will see.
The huge problems of the monetary system lie more in the direction of Bitcoin (the unbridled speculation of Wall Street) than fractional reserve banking and fiat money.
The attitude on this forum towards Bitcoin literally boggles my mind, at most maybe 5% truly understand it.
Each of these turns out to be a net-negative in my view:
- fixed supply means that people are incentivized to hold bitcoin instead of spending/investing
- algorithmic transactions mean that there is no way to reverse a mistaken transaction or a fraud; it also means that losing the key to your wallet is irreversible destruction of the money contained in that wallet
- pseudonimity means that it is very hard to track money laundering and other illegal financial schemes
- lack of centralized control enforces all of the others and makes it impossible to prop up the currency based on the current needs of the economy
I also understand the distrust of fractional-reserve banking and most complicated financial manipulations, and I wouldn't deny in any way that these have been misused very often at the benefit of the rich and powerful. But, at least with the current system, citizens have some amount of democratic control over their financial system, which they wouldn't in a pure Bitcoin world.
That's no excuse for the obscene waste of resources.
What's the CO2 footprint of standing armies around the world? Have you tried cancelling that?
Now regarding you imply that we should worry more about the emissions from armies than bitcoin, why is that an either or question? Yes we should worry about both wastes, but they are on the same order of magnitude. Moreover there is no evidence that bitcoin does reduce military spending or emissions, so again not making this an either or question.
Oh, the purpose of the US army and nuclear arsenal is not to "enforce the USD reserve status", it is to advance America's imperial goals, which vary a lot. The status of the US dollar is a second-order consequence of America's power.
If BTC were somehow linked to and used to solve some of the world's most pressing problems such as modelling protein folding or some equally significant problem, then that would make it partly energy efficient. I don't know of any such crypto, and I think I've heard of only one such crypto that's somewhat like that. And as recent evidence goes, no crypto gives you respite from the law - on the contrary, it will bind you in constant avoidance of the law.
Even Monero?
Due to the sunk cost fallacy, Bitcoin has more value. I know this means I'm relying on the irrationality of humans, but why wouldn't I? It's more predictive than assuming humans will be rational with regards to this subject.
Not even a little. The scarce digital asset is the slot on the distributed ledger. That you currently need a load of energy to reassign digital ledger slots is an accident of history - because it was the first way that anyone worked out how to run a secure distributed database across mutually distrusting nodes where you don't need to know the participants in advance.
The work is not the scarce asset. If you doubt this, consider: the 'work' required to mine a block (and so 'create' the block reward) changes based on how much hash power the network has, and varies quite substantially between the early blocks and now, yet the bitcoins mined then are worth the same as bitcoins mined now. If lots of miners stop mining BTC, then the amount of work required to mine the next blocks will reduce, yet the bitcoins created with the lower work requirement will be worth exactly the same as bitcoins created with higher work requirements.
Obviously, in a PoW blockchain, the work is extremely important, since a PoW blockchain can't remain secure without significantly more work being done by the network than an adversary can marshal to attack the network, but that's an entirely separate thing.
You can take a valuable painting, burn it down to ash and use the ash to make ink to do a stick figure drawing. The stick figure drawing doesn't magically become 'a store of value' because you destroyed a valuable painting to make it.
No! No it isn't! Gah! I'm sorry but it is so frustrating to hear this nonsense repeated over and over. Bitcoin is not valuable just because you wasted shedloads of energy to make a bitcoin! It's valuable because somebody else will exchange something of value for it.
It's incredibly maddening how so many crypto-libertarians suddenly turn into believers in some Marxist "labor theory of value"[0] when you press them on bitcoin's incredibly wasteful Red Queen's race[1] of ever-escalating wasted energy.
So, in a sense its value indeed derives directly from the work put into the system. Which is not to say there aren't alternatives (I'm really curious how Proof of Stake will change the Crypto landscape), but at least for BTC, that's how it is currently.
Point being, trust and trust-worthiness are two separate things. Most people investing in Bitcoin have not in any way confirmed for themselves that the algorithm is trust-worthy, they just trust that others are also willing to buy it so that they won't be left defrauded. Hell, people have been defrauded by the likes of Mt Gox, and the network didn't collapse entirely.
But there's also the people that invest long-term because they think crypto currencies have a lot of potential to be adopted more widely in the future, which entirely depends on their trustworthiness. Without that second group, any sufficiently negative news would cause the BTC price to collapse completely -- and to be fair, there's always the risk of that happening (Tether sends its regards), but the underlying "trust in the benefits of the system itself" at least gives a floor for its price that's above $0.
Ethereum has done it this way: First you build a stable blockchain, secured through tremendous amounts of power. Then, once your system has been widely adopted and people have "skin in the game", you switch to Proof of Stake to minimize power consumption while still maintaining security.
PoS is the better solution, environmentally speaking, but it necessarily depends on there already being value in the system that people can be held accountable with and thus kept honest. But to reach that state, people have to trust your system first, and if you're not an already trusted entity, PoW is one way of achieving that initial phase of trust building.
I'm sure you don't want that though, because solar+batteries will power interplanetary civilizations somehow.
The energy isnt wasted though, the safety of the trustless transaction is proportional to the expended energy. While not the source of value, it is a necessity, not a waste.
This would be somewhat true if Bitcoin were the only mechanism for trustless transactions, but there are others that consume far less energy, such as https://en.wikipedia.org/wiki/Hawala.
What's also maddening is how subjective the term 'value' has on it's intended usecase that some can be so completely oblviius to make coax it into a specific farmework: cocoa beans and shells were also equally valuable to it's respective communities, but your forcing of modernity to this matter is equally marred by illogical and quite frankly lazy conclusions.
Bitcoin (lower case b, as in the token) does require a great deal of hashing power, but this model, proof of work, is what is required to ensure Bitcoin's immutability (the network capital B). And that is the cost of such a system which, if you aren't aware, is mainly operating on renewable energy [0].
That is just the cost of entry if you want to incentivize keep everyone honest and play by the rules, the fiat World is littered with countless stories of failed currencies and failed societies and cultures because man's inherit nature: greed and corruption.
0: https://bitcoinmagazine.com/articles/study-74-percent-of-bit...
And to make it difficult to forge transactions it asks you provably(!) burn some electricity.
The point of "Marxist" labor theory, is that you shouldn't pay workers less, than the value of what they produce. I don't think Bitcoin miners ever made that claim, unionized and found their class consciousness to get paid the real value...
The author clearly has a very poor understanding of what value Bitcoin currently has in our current macro-economic situation, and why investors (and corporations) are choosing to allocate larger parts of their portfolios in cryptocurrencies.
Calling out the BTC network on its energetic inefficiency completely misses the point that the work put into the network is exactly the scarce digital asset, and hence the store of value.