The reality is that if you scaled up the bitcoin system linearly so it provided as much transaction capacity as Visa (let alone the entire world economy) [edit or rather worded differently if each Visa transaction consumed as much power as a Bitcoin transaction], it would require a number of times more power than the entire world produces, and produce as much e-waste as the entire world put together. Obviously this is not how bitcoin scales because even if you did that it would still process 7 tps.
That is, however, proof that it is drastically less efficient on a per transaction basis even factoring in any and all possible externalities including the army and mining and the fed (lol). This is a proof by contradiction.
Anything else is a talking point and also trivially falsifiable. The US Army protects the US not the dollar and its budget would not be reduced in a Bitcoin powered world. Neither would its oil consumption because tanks don't fill up on bitcoins.
The ubiquity of the dollar specifically is also irrelevant as we're not comparing crypto to US Dollars but rather to well-managed fiat systems. Any and all. Not just one albeit dominant one.
This is obvious stuff if you think about it for a half second without trying to justify the unjustifiable.
Nic doesn't say that Bitcoin consumes less power than you think on a per-transaction basis. He says that Visa consumes way, way more if you price in nebulous externalities.
I am rejecting his thesis by saying that if Visa used as much power per transaction as Bitcoin we'd need to generate 3X as much power as we currently do.
The quote is: "Any energy comparison must take the above into account – including the externalities from the extraction of oil, which implicitly backs the dollar."
I'm taking it into account. And I'm saying he's wrong.
Sure he does:
> Second, metrics like the “per-transaction energy cost” are misleading because transactions themselves do not cost energy; nor does bitcoin’s CO2 footprint scale with transactional count.
The point is that transactions per second isn't the unit of value by which Bitcoin is priced. Bitcoin is not competing with other monetary systems simply on the basis of transactions per second, but also network trustworthiness/security
He's not disputing the per-transaction cost of Bitcoin OR Visa, and is explicitly pointing out how looking at it on a per-transaction basis is misleading.
He is disputing the overall total network costs, not considered on a per-transaction basis but in terms of the total value provided by the network to all its users.
Transactions per second is just one of the factors that could add value to a monetary system, but it isn't the only one.
I factored it in with my calculus and you and nic are wrong. If you believe otherwise please show your work like I did not gut feelings.
TPS is a means to an end re disproving the thesis not a talking point about utility.
I am not looking at value in terms of TPS. TPS an intermediate step in my calculation. I am looking at total system usage. Sorry bud, your system is the digital equivalent of rolling coal and no amount of mental gymnastics will change that.
But by all means show your work and let’s talk about it, don’t just say “nope try again” haha that’s what people who have no leg to stand on do.
The problem here is not about including the externalities (although that is an important thing to consider). The problem here is that it is a mistake to look at the value only in terms of transactions per second when transaction rate is just one factor by which you can judge a monetary system. It's not necessary for Bitcoin to compete with other monetary systems in terms of transaction rate for it to be useful.
But if you find that Bitcoin is a digital, permissionless, borderless, uncensorable store of value, a better gold than gold, then it doesn't need millions of transactions per second.
Bitcoin is just fine as the most secure settlement layer and long-term store of value for large, infrequent and expensive transactions.
Fiat money isn't going anywhere, Visa doesn't need to be replaced, and Bitcoin doesn't need to pay for your coffee to be useful. It can do what it does best, coexisting with fiat systems and other cryptocurrencies.
It's not, because its inability to scale means folks are pushed onto L2 which has none of the guarantees you mention.
As Bitcoin's use as a store of value increases and transaction throughput remains constant, transactions will be larger, less frequent and more expensive.
I won't get pushed out onto L2 just like I'm not pushed to liquidate real estate or art collections. I don't transact in long-term stores of value more than once every few years, and then I expect the transaction will be large, slow and expensive.
It is a strawman to say that Bitcoin can only be useful if it replaces all traditional financial instruments.
As far as scaling Bitcoin goes: prove it. It’s been a decade and it still does 4tps.
Sure. The Lightning Network already exists, is working and in use, and can in principle do essentially unlimited TPS.
Bitcoin doesn't need to scale to millions of TPS to be successful (since payments and microtransactions aren't its only use case), but it so happens that it can do that through second layer technologies.
Again, that’s not an argument for Bitcoin, just so we’re clear. This is an argument for visa instead.
And it's even more complicated than that, because you'd have to take the data from every node, and reconstruct complete paths to identify a single transaction.
And yes, I personally use the Strike app + Fold app to collect satoshi rewards by buying gift cards for shopping. Strike also has a beta app that uses lightning as the rails for global p2p transfers, e.g. you can instantly send USD to EUR. https://twitter.com/JackMallers/status/1346867753253220356
I was trying to figure out the same thing a month back[0], but most of the responses I got boiled down to "you're asking the wrong question". It's hard to wade through the crowd of "it's just digital gold", but the best response I got[1] is that it works decently for places that accept it, but there are hiccups, usually around liquidity.
Each channel accommodates theoretically infinite amount of transaction.
https://store.blockstream.com/
https://acceptlightning.com/list.html
Several major exchanges have announced that they are implementing LN support. Still very early days.
As always, call me when I can buy a latte with it.
You can buy a Starbucks gift card on fold app using LN and currently get 3% back in sats.
But seriously, why would anyone spend a ton of effort right now integrating a coffee shop directly with LN in the first world? Traditional payment systems work fine. Bitcoin was never primarily concerned with replacing Visa. Think bigger.
In such cases, there is no reason such users can't "enter" bitcoin through a second layer such as the Lightning Network.
Why would they do that if it isn't real bitcoin?, you might ask. Well, for one, their local, tin-pot-dictator created currencies are often worthless, meaning that even second-layer bitcoin is a far more sound and reliable currency.
And who is to say $40 for an on-chain transaction is an "egregious fee"? It turns out having access to the world's most secure, decentralized, unstoppable, set-in-stone, uncensorable, trustless, non-inflationary monetary network is a valuable thing. Maybe so much so that $40 per on-chain transaction is a bargain in the bigger picture.
Yes there is they need a channel, which costs $20 to open and $20 to close.
> And who is to say $40 for an on-chain transaction is an "egregious fee"? It turns out having access to the world's most secure, decentralized, unstoppable, set-in-stone, uncensorable, trustless, non-inflationary monetary network is a valuable thing. Maybe so much so that $40 per on-chain transaction is a bargain in the bigger picture.
Ah you're a comedian too!
No, they don't need to open a channel via the blockchain. They can have an account with a third party, for example.
And again, keep in mind we are talking about access to money -- a money that cannot be debased -- for those people living in the poorest and most terribly governed areas of the world, where debasement, hyperinflation, and the utter destruction of savings is commonplace.
Even if they don't get the full benefits of on-chain bitcoin transactions, they will still be light years ahead of where they were relying on failed local currencies. A massive improvement even in the worst case scenario, helping to lift real-world folks out of poverty. This is something to applaud and cheer for, not shake your head at or mock.
I was referring to the idea that a $40 channel fee might be palatable or even negligible for folks such as those in Malawi whose GDP per capita is $400 per year.
It's fair to judge Bitcoin's energy use by its tps, but the above is not true. Energy use and tps are, as you then acknowledge, not related. It is possible to increase the number of tps by many multiples. The trade-off is centralization due to hardware requirements.
Bitcoin doesn't have to function as a currency to be wildly successful (since being a currency isn't the only relevant use case), but with second layer networks it will be able to.
It’s representative of the world in which we live today not some hypothetical world that could exist in the future - that the team has promised and failed to deliver for a decade. I can make up numbers for visa that match too.
After all climate change doesn’t care about hypotheticals.
Your argument is about as convincing as "well you couldn't make a payment billion dollars because a penny weighs 1 gram, and their combined weight would be too heavy to transport"
Your counter example is nonsense.
Could it be in the future more efficient given unspecified future changes? Who knows but it sure as shit isn’t today. I was pushing back on Nic’s theory on pricing in externalities.
The more efficient changes ALREADY HAPPENED years ago in the form of Lightning network.
The Bitcoin blockchain is the bedrock of this new peoples currency and upon it has been built the Lightning network which is a Bitcoin integrated sidechain for cheap and small transactions.
Lightning facilitates Bitcoin transaction capacity to scale in a ludicrously efficient manner and has now been technically maturing for years now. Please keep up.
Of course it's not a solution to scaling, because it requires one on-chain transaction to open, one to close, and if an intermediate node happens to go down your funds are locked. It's garbage. Vastly overcomplicated garbage.
By the way to just open a single channel for everyone on earth today and close it will take about 70 years, so right around the year 3000 if you (very optimistically) factor in births and deaths. And about $265 billion dollars at current fee rates - $18.99 as quoted today. Elon better pony up! This of course assumes the blockchain isn't used for anything else in the interim.
How small can the transactions be if a channel open/close costs almost $40?
The only L2 solutions that scale are permissioned, centralized and/or trustful. Because that's how you scale. And you can back those with anything as none of the guarantees of the underlying asset are conferred to these L2 networks simply because they notionally operate on top of Bitcoin for net settlement and the (soon to be unlawful) non-custodial wallet.
LOL. Nice. I like it even better than my other favorite example, that issuing a paycheck in Bitcoin to the 125 million full time employees in the US would take about a year to process.
But increasing the block size limit wouldn't reduce the energy consumption. It would just make Bitcoin support a higher maximum transaction count per second, which perhaps the market doesn't even need or care about.
The power consumption of Bitcoin is proportional to the price of Bitcoin, it is not related to the demand for making transactions or how many transactions are being made.
[edit; to your reply: that sounds like a bad solution and I think you know that lol]
> that sounds like a bad solution and I think you know that lol
I don't think it's a good or bad solution. It is basically just the same as how market forces control the values of fiat currencies which in turn affects how much energy is required to secure them.
[edit: this isn't about the army. this is about currency. stay on track, stay on topic - both of those things can be bad and having two of them can be additively much worse; having a debate with you is like trying to grab a fistful of jello, absolutely impossible]
> The army is to defend the country and its people, and would not be reduced in a bitcoin powered world.
Yes, they also defend other things besides the country's financial interests. So you'd expect them to cost a little more than Bitcoin, which only defends holders' financial interests. I am simply pointing out how they use the same proof-of-work system to accomplish it.
If the widespread adoption of Bitcoin led to a devaluation of existing fiat currencies, then you would expect military spending to go down (in terms of bitcoins). But I don't think that Bitcoin's adoption will decrease the use of fiat currencies (by any significant amount).
> both of those things can be bad and having two of them can be additively much worse
It's not clear why they would be additively worse. Creating a new place to store wealth doesn't increase the overall amount of wealth.
I agree that it is not a good thing that proof-of-work systems are wasteful, but perhaps it's the only way of solving the problem.
Proof-of-stake systems look promising but there are still some open questions about how it should be implemented and what the implications are for network security, and it will be at least a few years before they become battle-tested enough to have the same level of trust as Bitcoin.
Obviously not, the other solution is by fiat, which has been working for milennia, and it's not about to stop.
What I'm saying is that I have, quantifiably and mathematically, shown that it's not possible for a crypto to take less energy than a visa transaction, due to thermodynamics.
Your retort continues to be that "the state spends way more energy and resources defending the currency that you're not factoring in" -- but you've failed to quantify that in any way. It spends some quantity, ok, I understand that. You haven't replied how much, you haven't done any analysis. Without any justification you state that it's at least as big if not bigger than a Bitcoin transaction.
I want to know why, when I've shown it's not thermodynamically possible.
I'd love to know how much of the state's "energy expenditure" you apportion to "currency protection," and how much that would decrease in a world where the entire economy is denominated in cryptocurrency. Some justification - anything - would be a great starting point, but so far you've just stated it as fact, in many unrelated contexts. This is not a generally accepted or understood fact.
Regarding your crypto energy argument, I think I addressed this in the other thread but I will try to explain again.
With the current 1MB block limit and current valuation of Bitcoin, you are absolutely right that the transaction rate per kilowatt can't exceed Visa.
The argument in Nic Carter's post which you are missing is that transaction rate per kilowatt is just one possible way of judging the usefulness of a monetary system.
Monetary systems can be useful for reasons other than their high transaction rate (for example, they might support a particularly high transaction volume, or have a particularly high cost to attack).
Increasing the maximum possible transaction rate per kilowatt would be as simple as increasing the maximum possible block size, since transactions are effectively free (it is only finding blocks which costs money).
There are trade-offs associated with changing the block size limit, but those trade-offs have nothing whatsoever to do with the energy usage of Bitcoin. Changing the block size limit won't affect the energy usage. If the market had enough demand for increased transaction rates, either Bitcoin will be forced to increase the block size or it will simply be outcompeted by a different coin which already has.
> Your retort continues to be that "the state spends way more energy and resources defending the currency that you're not factoring in" -- but you've failed to quantify that in any way.
I actually don't know that that is true, and I didn't mean to imply that I know that for sure.
But, it is what you would expect assuming the market is accurately pricing Bitcoin for the value it provides them.
If it weren't true, and USD is actually cheaper to secure for the value it provides, then it is an easy arbitrage opportunity where you can short Bitcoin and buy the relatively-cheaper-to-secure USD instead. Eventually with enough market participants it is sure to eventually reach the "fair price".
After all far be it from replacing Visa and Mastercard, Visa and Mastercard have simply added crypto so you actually have to remove them from your energy savings estimates.
Further I disproved the energy utilization point in the original conjecture as impossible. If you have something to add add it and show you work.
Sorry man, you're just not right on this one. Number go up, we get it. That doesn't make it a fundamentally good, useful or interesting technology. All this flailing/pointing at everything that moves with no calculation, no evidence, is just to distract from the fundamental fact that it's a wasteful, borderline useless casino.
Show. Your. Work.
It isn't a matter of how much the financial system consumes. It is a matter of how much the state consumes to protect the wealth of its citizens (of which fiat is just an emergent property like you say).
> Further I disproved the energy utilization point in the original conjecture as impossible. If you have something to add add it and show you work.
You will have to clarify what point you mean or what work you want me to show.
> Number go up, we get it.
Please don't talk to me so disrespectfully. I have no interest in speculating on the price of cryptocurrencies.
This is a complete fantasy - power consumption is driven by the desire to secure the network, it is not related to transaction volume.
There is an argument that power consumption would have to be significant because attacking the network has to be cost- prohibitive, and there are people working on POS and similar approaches.
Etherium is actually attempting to scale, their talks are very interesting .
Bitcoin could handle arbitrary scaling with little power-usage increase had it not been intentionally hamstrung by (for lack of a better term) "small-blockers". This is because the primary power usage of bitcoin (mining) does not scale linearly with transactions/block. The transactions to include are usually considered once by the miners who then make iterated attempts at solving by modifying the block nonce, not the included transactions.
The case I am making is that it is not possible for Visa to use as much power as Bitcoin on a per transaction basis based on today's energy usage, factoring in all exernalities - because the world would be out of power.
I am simply countering Nic's trivially incorrect position.
As an example, ACH is an FTP based system that largely runs once a day (maybe 2-3x now), fed by various backing mechanics for the bank itself, including the Fed and whatever else you’d want to suck in.
Visa’s transaction rate is completely orthogonal to that system. Visa could 10x their transaction rate without touching that underlying system if they wanted to, as could something attached to Bitcoin. So your argument about scaling Bitcoin up counters a poor understanding of the initial position—so poor as to make it a different position entirely.
Because there's nothing there.
The whole thesis of Bitcoin is that it's trustless, decentralized and permissionless. It's also obvious that it doesn't scale beyond a single Costco or a mid-sized flea market. The only way to scale it is "Layer 2" networks which fundamentally are trustful, centralized and/or permissioned. Because that's the only way to scale. You can back those L2 networks with anything. Gold. Shoes. Dollars. GME shares if you ask Bittrex in any non-US market. There aren't even any guarantees these un-audited, un-accountable, un-regulated exchanges aren't selling more bitcoins than exist the way you oversell seats on a plane. Should be fine unless there's a run.
If all you want is a one-way message for net settlement between banks, I recommend you investigate SWIFT and ACATS.
The system doesn't do what it says on the sticker. The only reason anyone cares is number go up. And number only goes up if you go through the kind of crazy mental gymnastics Nic did.
[edit: ACH is dead, long live RTP [1], and guess what, RTP doesn't use one Argentina of electricity either somehow]
[edit: My argument isn't about scaling, it's about Wh per transaction, which Nic is strictly, totally and completely wrong about; let's stay on topic]
Scaling Bitcoin's tps does not increase its energy usage. The tps and energy usage vary independently of each other. Bitcoin does not require any more energy usage to handle more tps than Visa. In fact, if we include off-chain transactions which are settled on-chain it already can.
> The US Army protects the US not the dollar
What is the value of the dollar if the United States ceases to remain a sovereign polity? The dollar is part of the United States.
Energy scales with competition to sign transactions. Read the Bitcoin white paper my dude.
It's no different than you saying "read the bible!"
Transaction blocks are generated at a fixed rate, no matter how many miners are operating. This is done by adjusting the difficulty of finding a sha256 hash on the data of the transaction block. You simply need to find a hash by adding some random data to the block until you find a hash that ends in 0. The more 0s at the end of the hash, the harder to find.
Generating a sha256 hash is easily done by a laptop computer. But when huge farms of ASICs are finding the hash very quickly, the difficulty goes up to throttle the transaction rate, and many more hashes must be calculated in order to find one that meets the criteria. This is where the energy use comes from - the hash difficulty, not the number of transactions in a block - thus it scales with competition to sign blocks, rather than the number of transactions.
It is difficult to justify why the US is providing militarily support to the Saudis without invoking oil and dollars. They are a pretty shady regime and not the sort of people the US wants to be supporting. And the Saudis don't seem to be trading with America as much as China [0, 1].
[0] https://tradingeconomics.com/saudi-arabia/exports-by-country
[1] https://tradingeconomics.com/saudi-arabia/imports-by-country
So, what would you think is the reason the US invaded Iraq?
It just so happened to coincide with Saddam starting to sell oil for Euros, and France and Germany just so happened to oppose the war.. but it's probably nothing to do with oil and dollars.
Gaddafi wanted to sell oil for Gold. In that case Europe and the US were on board with removing him. Why then, when he'd been in power since the 70s?
Reminds me of one of by favourite Frankie Boyle jokes: "Our government was angry about Khashoggi. We sent the Saudis a strongly worded arms invoice."
Iraq started pricing oil in euros in 1999:
https://www.theglobalist.com/iraq-the-dollar-and-the-euro-5/
Iran started pricing oil in yuan in 2012:
https://www.bbc.com/news/business-17988142
What's our geopolitical relationship with Iraq and Iran now?
[0] https://nsarchive.gwu.edu/briefing-book/iran/2017-06-15/iran...
https://www.brookings.edu/blog/ben-bernanke/2016/01/07/the-d...
Being a reserve currency means any financial crisis in the world tends to affect your currency and trade, not a good thing.
The dollar is not the largest cause of perpetual US entanglement in the Middle East. Oil dependency, on the other hand, may be.
Imagine the headlines if Russia did that in US. Yet they are sill 'allies'
No, but now that the US is a net petroleum exporter, puling the plug on the whole Middle East is a real possibility.
[1] https://www.aboutpipelines.com/en/blog/why-does-canada-impor...
Somehow I doubt BTC would lower military spending.
This isn't true. Internationally the thing that backs the dollar is the U.S. economy. People know they can spend dollars to get anything they need. Domestically what drives the dollar is that it's the only way you can pay taxes.
I suppose you could say that oil is used to defend the U.S. economy but that's a stretch.
>This isn't true.
Basic economics and the law of supply and demand says that it is true.
>when demand increases and supply remains the same, the higher demand leads to a higher equilibrium price and vice versa.
https://www.investopedia.com/ask/answers/033115/how-does-law...
You're not going to say that in a prison system cigarettes are not backed by anything for them to be used as a currency.
On the other hand, no one is going to be in a difficult situation if they cannot get bitcoin.
However, the idea is that between 1971 (the closing of the gold window), and now, USD and all fiat currencies lost 99% of their value. The same is not true for Bitcoin on a similar time frame (i.e. 30+ years).
BTC runs on fiat money.
But it's also unusual.
The common fallacy in Bitcoin circles is that Bitcoin is the only way to keep your money safe from inflation.
In reality, inflation means that your house, your car, your stock investments, and other holdings are also worth more in dollar-denominated amounts. The only thing that becomes less valuable is cash (and fixed return investment vehicles and such).
My amazon stock that I hold is going up in value, and is therefore "deflationary".
But it would be silly to say that I would never have a reason to sell those stocks.
I sell things, whether they are dollars or stock or crypto, because I want to buy something.
It's the same thing.
The only difference maybe, is regarding friction. IE, maybe it is a bit more difficult to immediately sell the Amazon stock at a store.
But transaction friction is different than the deflation argument.
do you have a good link that explains how this all works and how these different components interact?
Something shorter: https://gendal.me/2013/11/24/a-simple-explanation-of-how-mon...
"Bitcoin isn't a replacement for Visa or for your checking account. It's a store of value. It's not for day-to-day purchases."
Bitcoin fans when you complain that Bitcoin is massively wasteful:
"If you compare it to every cost that can be attributed to the existing financial system as a whole, including military spending, it's cheap."
I might be in a bubble, but it seems my intake of bitcoin information is balanced enough that most things are not this polarized.
You can't do "non-final credit transactions" on Bitcoin.
You can't take out a mortgage.
You can't manage investments.
You can't pay for groceries without waiting a half an hour.
You can't buy a $1.25 pack of gum.
Bitcoin is complete and self-contained because it is inextensible and feature-poor. It cannot solve the problems the banking system solves. Its solution is the classic "you didn't need it anyway".
And then Bitcoin fans realize that yes, they did in fact need those things after all. We can watch them reinventing the entire modern banking system before our very eyes. The main differences are that they run everything on the world's worst database, they insist on calling their banks "exchanges", and that they think it's OK to have all their money stolen every so often.
(Bitcoin also lacks the ability to prevent money laundering or to enforce judgments. I'd consider that a bug. Other people might consider it a feature. In either case, it means Bitcoin is solving a much easier problem than normal banks.)
The other mad comparison is that Bitcoin is globally distributed. If Argentina was globally distributed it would eat far more energy than Bitcoin.
What this really means is that Bitcoin is out of reach of a nation state attack.
For the local store, there’s always Nano currency.
Anywhere you drag your thesis out beyond that needs to take into account that you are fighting a straw-man. That's not what currency is for. Currency is a temporary, intentionally lossy (to encourage investment and velocity of money), store of value and medium of exchange. It is not an investment. It is not a long-term store of value.
> What this really means is that Bitcoin is out of reach of a nation state attack.
Right except 70% of the hash power is concentrated in a few mining pools in the PRC. A strongly worded memo from Xi that unless you permit their compromise of the network you'll find a new hobby mining minerals in Xinjiang, and party's over.
What attack are you imagining? Chinese miners cooperate to do a double-spend... on who? And how does it help them to destroy international trust in the coin and make their own assets worthless?
In another decade, when this mythical attack on this scale l (as it applies to BTC. Some smaller coins have been attacked, but they are nowhere on the same scale) continues to fail to materialize, are you going to say the same thing?
I just want to know how many decades from now of your position being falsified, that you need to wait for you to change your mind.
Or will you never change you mind? Is you position truly unfalsifiable, no many how many decades go by?
So what I'm hearing is everyone knows it can and does happen at a smaller scale but you just can't bring yourself to believe it could ever happen on a bigger scale. This seems like the creationism vs evolution argument.
I find this particular criticism of the currency pretty weak too for what it's worth as It's got much bigger issues. Like the sheer magnitude of its waste.
However, I do find the argument disqualifying when petitioning to make Bitcoin the "one world currency" when 70% of the hashpower is in a totalitarian ethnostate that can just screw it up at will. Conceptually it amounts to giving up sovereignty of your currency to the PRC.
What I asked was for what would make your position falsifiable, in terms of time that an attack does not happen. How many decades from now do we need to wait.
My position is falsifiable, on the other hand. If a major attack, on the scale of the whole BTC network gets broken for weeks and weeks on end, then my position is falsified, as I do not think such attacks, on that large of a scale, are going to happen, therefore if one does I would be wrong.
Yours, on the other hand, does not seem to be. It seems like there is no possible timeline, for attacks on that scale failing to materialize, for which you will admit that such attacks are not coming.
Coinholders would practically not be impacted: they could just take their existing keys and bring them into the hard-forked software and continue like normal. Mining might be disrupted for a short time, but is that so harmful to the enemy to be worth spending millions in electricity?
"First of all, Bitcoin and Visa are fundamentally different systems. Bitcoin is a complete, self-contained monetary settlement system; Visa transactions are non-final credit transactions that rely on external underlying settlement rails. Visa relies on ACH, Fedwire, SWIFT, the global correspondent banking system, the Federal Reserve and, of course, the military and diplomatic strength of the U.S. government to ensure all of the above are working smoothly.
Any energy comparison must take the above into account – including the externalities from the extraction of oil, which implicitly backs the dollar. As those who make this comparison inevitably fail to mention, the dollar’s ubiquity is partly due to a covert arrangement whereby the U.S. provides military support to countries like Saudi Arabia that agree to sell oil exclusively for dollars. It’s worth noting that the grossly oversized U.S. military, whose presence worldwide is necessary to backstop the international dollar system, is the largest single consumer of oil worldwide."
https://www.coindesk.com/what-bloomberg-gets-wrong-about-bit...