An egocentric profit heavily overweights truth and sense.
See also:
> Sealioning (also spelled sea-lioning and sea lioning) is a type of trolling or harassment that consists of pursuing people with persistent requests for evidence or repeated questions, while maintaining a pretense of civility and sincerity.[1][2][3][4] It may take the form of "incessant, bad-faith invitations to engage in debate".[5] The term originated with a 2014 strip of the webcomic Wondermark by David Malki.[6]
That's not the same as saying "free speech leads to truth". It's saying "truth cannot exist without free speech". The fact that some people are "bored of disputation" is not a good sign.
It's always the same issues: making a bold, unsubstantiated, potentially inflammatory claim like "Vitamin E is the future of medicine and you should all take supplements, don't listen to what big pharma says!" takes only 10 seconds. Debunking the claim however would require some time and effort, mainly because proving a negative is always more time consuming that making a wild claim.
A lot of economics and social theories generally use a lot of metaphor. A lot of mistakes get made by habitually applying an incorrect metaphor as a model. Battery is a sensible metaphor for aluminium. It is not a good metaphor for bitcoin. I'm pretty sure the original author made that error honestly. Either way, I learned a lot about bitcoin's energy economics.
These days a throwaway tweet or blog post can be seen by millions before there’s been any chance to debate the argument on a smaller scale (and either refine or abandon it)
It makes you not want to venture anything online, or at least anything with your name attached to it. I have a deep fear that something dumb but pithy I've said will become a flag for morons long after I realized that I was completely wrong.
In reality, while it is easier to broadcast your message to people all around the world in modern times, people still need to "really believe in an idea to help it spread". Unless you're already famous, just because you put it on a platform with potential millions of viewers doesn't mean that you'll actually get millions of viewers without trying really hard.
It's like the Birthday Paradox. The chances that someone in a room shares my birthday are small, but the chances that two people in the room share a birthday is large. It just takes a few of the millions of tweets to go viral.
I won't address your second point at length except to say that it's naive to think that with the ease of broadcasting, suddenly the wall is at rebroadcasting, which can be done with no more than a click and is significantly easier than creating the original message.
It's like if someone in the early 20th century took random excerpts of someone shouting on a soapbox at an intersection, but published it on the front page of a national newspaper unfiltered. I'm pretty sure no one back there would have seen much value in doing that.
The life of ideas and clichés is largely independent of celebrity - if it hadn't been one twitter star that picked up some pithy arrangement of words that fit the zeitgeist, it probably would have been another.
The trying really hard part is just to be in the middle of things, and if you're successful at that, when you're the 1 out of 100 people who said the same thing, you're the one that gets the credit because you have 2M followers.
Thee fact that 99% of Tweet are irrelevant doesn't abnegate the fact that millions of Tweets from 'nobodies' are broadcast daily and do impact the world.
Journalists decide on an editorial angle and chose random tweets to support their narrative.
Entire articles are written on random tweets.
You don't remotely need to be 'famous' to have massive social media impact.
In a civilization of self-seeking individuals, the objective of communications will be self-aggrandization there's little incentive in promoting the truth.
The point of having professions is the expectations that the professionals will be, well, professional.
It’s funny that “virality” was once seen as a positive feature of social media. Gad Saad, Professor of Evolutionary Psychology, explores the concept of “idea pathogens” (that infect minds and spread like viruses) in his book The Parasitic Mind (https://bookshop.org/books/the-parasitic-mind-how-infectious...). You can hear him speak about this concept in his interview on the Jordan Peterson podcast (https://www.jordanbpeterson.com/podcast/gadsaad/). Social media is the breeding ground for idea pathogens.
You know what the actual problem is? That this number is larger than zero at all. Police violence in the US is completely nuts, there were 999 deaths in 2019 alone. The population-adjusted number from Germany is 55 (actual deaths by police were 14). Which is still too much.
But my main point isn’t to debate policing. It’s that reasonable discussion is disallowed due to vague content policies like banning “hate speech” (very fluidly defined) and the ability for coordinated brigades to mass report and block dissenting viewpoints. This allows one sided unrefined ideas to be the only ones in circulation, and they get amplified without anything to slow it down, without anything to add nuance.
Because, as stated, apparently police other countries manages to cope with dangerous situations without killing everyone in sight. Keep in mind that most of those situations aren't hollywood-style standoffs - many of the victoms are e.g. mentally ill during a psychotic episode etc.
> This made me feel the system by and large is working well.
We are talking about 2000% higher kill rates compared to other industrialized countries (Germany isn't particulary peaceful, just average).
If it ends up being food poisoning at some unacceptable rate of occurrence with provable link to McDonalds burgers, I would welcome investigations and incremental improvements. What I wouldn’t do is call for McDonalds to be defunded/abolished, or for fast food to be replaced by an alternative food system, or label anyone who disagrees as racist, or inject my ideology into schools/companies, or censor those who disagree. Nor would I participate in repeated rioting resulting in several deaths and billions of Dollars of damage.
Instead I would work within the system, in a legal and civil manner. I would welcome an open debate in the spirit of classical liberalism. I would want a nuanced understanding and nuanced set of actions to result.
Lastly - would I spend time defending McDonalds on forums? Probably not since it’s not that important to me and I have other fast food choices. But I only have one local police force to depend on. And the safety of my own family and property hangs in the balance. So I would definitely engage on that topic.
No, this is because extremely online people fight each other by begging the owners of websites to censor their enemies. It has nothing to do with the bad argument, which John Birchers would see as ancient.
Pre-modern zombies weee much harder to find under Napoleon for example. His famous aphorism "I prefer lucky generals" was a reference to the ability of Marshall Ney to shoot two zombies in the head at 100 yards with one round.
Abraham Lincoln, Zombie hunter was actually a biopic.
The notion goes far beyond narrow views of 'scientific reasoning'.
Integrity, far from 'unscalable', is an essential factor in the functioning of civil society and probably the #1 predictor of a successful ongoing civilization.
The difference between a rich and poor country is sometimes 'natural resources' but more often than not highly organized social order based around institutions and systems with integrity. In everything from 'Sushi Chef' to 'Parenting' to 'Early Childhood Education' to 'DMV' to 'Drug Regulation' and 'Accounting Principles'.
Yes, it would be nice to have an objective truth but we don't need that to know that bribing a or shooting a cop is 'bad'.
Often, they were abused.
But at the same time, central entities are considerably more knowledgeable than individuals.
The CDC is a rational source of information about COVID - even if it's not perfect.
Your average neighbour is a very bad source.
We now live an era wherein the immediate payoff for hustling lies or partial lies is much greater than the act of having constant integrity, wherein the payoff is much longer, possibly even not even within a single lifetime, i.e. it takes decades of conscientious behaviour within groups to advance civilization.
Looks like ppl get fed-up with "free speech" very easily. Especially when they assume they're "obviously right!" :-)
[1]: Some limits apply (slaves, etc.).
Would you say that false information harms you personally?
[0] https://quillette.com/2016/02/15/the-unbearable-asymmetry-of...
nice saying
I could go further, it captures the essence of "lying for profit" no matter the economic/political system.
HN readers have been a zombie-like mob when it comes to ignoring Bitcoin, it's sad to see a otherwise smart group of people miss out on the biggest thing since the Internet.
Apparently a huge number of blinded people run in amok preaching how Bitcoin is saving the world.
It is not.
There is no single reason for bitcoin to exist other than perpetuate value for people who are invested in it while also burning energy at a rate of not a very small country.
It needs to be repeated until enough people inept in financial or technical matters understand it.
Just from my lifetime: Hyperinflation in Venezuela and Zimbabwe. Inflation in Argentina. The housing bubble. The internet bubble. Banker bailouts. Our current everything bubble.
The classic example of functional deflation is in technology: computers have been under substantial deflationary pressure from the increase in performance year over year, yet people still have bought computers, and the industry has still prospered despite this.
Likewise, civilization was largely built on hard money economies, and prospered, despite the difficulty of debasing within them. It has largely fallen under soft money conditions, as in the the Weimar Republic, or the debasement of the late Roman Empire.
Note that this "deflation is bad" orthodoxy is propagated by the same economic regime that embraces inflation as beneficial, and profits from the printing of money.
Bubble happens when an actual value of something gets disconnected from its price. When people buy something for ever increasing prices without regard for actual value because they believe the price is going to go up.
In a bubble only the price of that one thing goes up, in relation of everything else.
In an inflation prices are representing the value of products but as value of money decreases the numbers representing prices must go up. In this case the price increase is caused not by increasing demand for the product but rather increasing supply of money.
Printing money causes value of existing money to be diluted because if tomorrow we have twice the amount of money in circulation than today but we are still buying same amount of products and services, then we will need to pay roughly twice the price to keep market equilibrium.
It saved my world, and millions of others.
All the things HN pundits love to talk about, but when it comes to actually making the world a better place, people like you become Luddites and naysayers.
HFSP
It definitely didn't. It may have made you money, or given you a creative programming outlet, or friends. You could also get that from dealing large amounts of cocaine, but you wouldn't be able to pretend you were a revolutionary.
100 Million people have benefitted from Bitcoin and it's censorship resistant network.
If you can't figure out why this trillion dollar network has value, I can honestly say I am jealous of your financial and anglo centric privilege and hope you never acquire any Bitcoin, you obviously don't deserve it.
How? Be specific.
> [...] but when it comes to actually making the world a better place [...]
How is Bitcoin making the world a better place? Be specific.
> HFSP
I had to look this one up. For anyone wondering, apparently it means "Have Fun Staying Poor".
Improving the lives of 100 million people by giving them a way to save money without a government agency. If you can't figure out why that has value, you're probably are a beneficiary of anglo centric privilege, and in that case I hope you NEVER buy any BTC.
> I had to look this one up.
Remember it. It won't be the last time someone says this to you
"Have Fun Staying Poor" is in my opinion a disgusting remark to make to complete strangers.
I heard Ethereum has a GREAT community, they even do synchronized dances in Unicorn outfits! Also they are moving towards PoS, so it won't boil the oceans like BTC.
You should really look into it! People from SV/HN find it much friendlier than the toxicity in the BTC community.
Please do like the OP and make better FUD so we can clown you in the comments further. Also, Bitcoin is a net-positive for the environment no matter how "mean" people like me are to you. Run the numbers
That's unrelated to it being negative-sum though. Running the numbers on this is trivial. You can only profit from bitcoin by selling it to someone else for more than you paid for it. Inevitably for some people to profit, some people have to lose a corresponding amount. This alone would make bitcoin zero-sum. Some people, miners, are special though in that they are by design always making a profit. That they extract from the network making bitcoin negative-sum.
As a consequence it's positive only for those people who find a loser to sell to, are miners or "shovel" makers (electricity, hardware, ...)
Energy is, at this moment, being overproduced by design
The reason for this is because in case there is an emergency (like a snowstorm in TX) energy producers can switch on overdrive and heat homes.
By increasing the amount of energy capacity we have, we become more resilient to situations that require massive amounts of energy. Society needs an increase in energy production in order to uplift the lifestyle of the world, there is no way around that.
Miners get 12.5 BTC every 10 minutes. That's the direct relationship between the cost of bitcoin and the cost of electricity. If miners (total combined) spend less electricity, they'll buy more hardware. If they're spending more electricity, some of them will go bankrupt reducing total electricity consumption.
I'm simplifying it a little bit, because miners also get transaction fees, but those are similar to the main reward and logic still works.
Take regular currencies for instance ($€¥…): they do not convert paper into value, they use paper to represent value. Now does printing more of it makes it better at enabling exchanges? Not necessarily. There's a point beyond which you just get over-inflation (a little inflation can be very beneficial, though).
Now Bitcoin is definitely not at the point where it does causes over-inflation (else its valuation would drop). But you do need to compare it with other currencies, and its energy consumption is a big fat drawback. A deal breaker in my opinion. Barring perhaps some extreme cases, using proof-of-work crypto currencies is simply unethical: too much harm, not enough good.
Mostly, they use mostly-electronic ledger entries to represent value.
Bitcoin needs a reliable way for transactions to work in a single thread (so the block chain doesn't turn into a block tree), and we avoid stuff like double spends. That's proof of work, coupled with a reward (in currency).
To avoid hyper inflation, Bitcoin automatically sets the difficulty so we create one new block every 10 minutes. That limits the number of transactions, but we can remedy that by just making making blocks bigger.
Now the value of a successful block mining is the transactions it represents. Without them, you wouldn't have a means of exchange to begin with. But the reward is a new Bitcoin. And that new Bitcoin by itself does not add any value. It just inflates the currency a little bit, effectively taking value from all other bitcoins. The total value represented by all bitcoins stays the same.
Now we can discuss pros and cons: on the bright side, mining a block enables a bunch of transactions. With a maximum block size of 1MB and 1 block every 10 minutes, we get 7 transactions per second. That's the real value of Bitcoin to humanity: 7 transactions per second, give or take.
As for how much those 7 transactions per second cost, well… there's all the hardware and the resources required to make it, and there's energy. A back of the envelope calculation tells me Bitcoin spent about 8 Gigawatts of power in early 2020, and now it's more like 14. That's 2 Gigajoules per transaction, or about 500KWh.
That's way too much energy for way too little value. Hence my thesis that Bitcoin as a whole is so wasteful that actively participating in it (especially if you're a miner), is unethical.
Worse: It does the inverse of scaling. The more electricity that is added, the less efficient it gets.
Even worse: The system is designed to incentivize more people to join and waste electricity, by paying them to do so.
Moving value is valuable, but the resources expended in moving it do not provide value; rather, they come at a cost, like gasoline in your car.
And Bitcoin is pathetically inefficient at moving value. The average transaction fee has been floating around, what, $15-$30 USD? This is international-wire-transfer pricing range, if it's a single transaction and you don't do these transactions very regularly with your bank.
Don't count the value it provides on the wrong side of the ledger.
Bitcoin is a FULL system, you're seeing the whole thing, the mining is for securing the network AND moving value. Can you say that about any other system (that you are already so used to and blind to how it works)
I deliberately chose international wire transfers as the worst and most expensive way to move money. I assume everyone knows that you can move large sums of money domestically for mere pennies. Yes, that implies the total cost of the system is less-than-pennies per transaction, including human staff, hardware to run everything, taxes paid to governments which protect the system, everything. Yes, transaction costs are the right way to compare the cost of transactions, believe it or not.
Maybe Bitcoin is a FULL system. Big deal. If it's not going to share that FULL system with normal everyday life and its shared institutions, it bears the FULL costs of failing to share, as expensive as that may be.
I'll give you a hint: it's less than 1MWh/tx, which is what bitcoin uses today.
2283MWh per block. 1 MWh per transaction.
Also, you haven't spoken at all about the other side of the equation. Have you accounted for all the externalities for the other monetary network you are comparing Bitcoin to?
Of course not. The existing ones you depend on to protect the necessary infrastructure and servers of bitcoin are already sufficient.
I assume you argue that a single army/government could take out/control miners - which would be the better discussion to have. That's where we would talk about the value of the Bitcoin network.
Centralized exchanges are the reason you don't pay 10000 bitcoin for a pizza. They're the reason why it's even accepter, because there's at least one large place that will exchange your coins for cash.
In my opinion there is little to absolutely no reason to ever change Bitcoin back to cash. Maybe take a loan against or rent it out to others for cash interest, if you really want cash.
I don't value trustlessness, and in fact lack of trust is a vacuum filled by evil.
Bitcoin is a ledger.
If you hired an accounting firm to keep track of who had which assets and handled transactions, there is value being created... valuable work being done.
This value probably isn't being generated very efficiently (there's an interesting study to do, actually figure this out and don't rely on somebody's intuition) and the "value" isn't being actually utilized very widely: how much of bitcoin being used doesn't fall into the categories of A) generally morally objectionable B) toy uses fiat -> BTC -> txn -> fiat which didn't need the BTC middleman or C) speculation. [ not much ]
Mining bitcoin would seem to transform a lot of electricity into a little accounting, not free of value, but likely demonstrably of low value.
At current prices, just the block rewards make the Bitcoin network running cost something like $37bn/year.
As a ledger it's strictly inferior in every way. (The ability to take bitcoin 'offline' by holding your private key, or exchanging it on secondary markets, is not a feature of the blockchain itself. These features can exist without a blockchain).
Do you not consider those 'economic value'?
I wonder where the 50x difference goes.
> At current prices, just the block rewards make the Bitcoin network running cost something like $37bn/year.
The block rewards are "free", it is hard to come up with a way to account for the cost of something which is invented from thin air.
The better comparison would be how much the electricity and mining hardware per year is used compared to the transaction work done.
Logic would say, though, that the money spent mining and the BTC->USD value of block rewards would be similar (that is the margins on bitcoin mining tend towards zero).
However with the volatile pricing of bitcoin, you would have to generate a BTC->USD value for each block reward and not convert a year's worth of rewards on a particular day's (or minute's) spot price.
It would be the same with Bitcoin. Retailers have no interest in eyeballing the Bitcoin exchange rate and dynamically repricing their goods every 5 minutes. Unless Bitcoin becomes price stable, or the currency in which they pay all their expenses, they'll always be deferring to payment processors.
Bitpay charge 1%, which isn't even that cheap.
> The block rewards are "free", it is hard to come up with a way to account for the cost of something which is invented from thin air.
It's not "free". They spent a fortune in amortized equipment costs and energy to win that reward. The bottom line is the miners need to sell their 12.5 BTC block rewards to cover their real world costs (+profit). So, in a competitive mining environment, the block reward coupled with the market price is a proxy for the minimum cost of running the network. This is one factor in market prices.
I can arrive at a store entrance, and in 30 seconds be leaving with a new macbook, paid for on my VISA card. I can then pay it off 56 days later without paying any charges or interest.
If i couldn't do this the store would almost certainly make fewer sales.
This is false.
Let's say I am shady business that launders money.
Is bitcoin helping stop my laundering?
No... I just use regular money which can't be tracked so easily...
In essence, bitcoin makes it easier to track money of people who don't mind their money is being tracked or are inept enough to understand their money can be traced.
Ledger does not replace need for accountants.
We already have a bunch of software for ledger (that also doesn't require to burn huge amounts of energy).
Banks are ledger and if somebody like a government want to get info from that ledger it has been quite easy recently -- even Swiss banks relented and have been forced to submit information.
Accountants are people who specialize in knowing how to categorize stuff before it is put on a ledger in a way that meets requirements of local law and makes business more easy to conduct.
I don't see any possible way in which bitcoin is making this easier.
>I don't see any possible way in which bitcoin is making this easier.
Who says it has to be easier or better? It does the work of handling transactions and keeping track of balances.
With bitcoin as a user you only have to pay a very tiny transaction fee in order to keep track of your account value and handle the transfer from one account to another. Is this better? Well you don't have to pay somebody to operate software and as long as you can access the bitcoin network there aren't any impediments to doing transactions.
But the point isn't if bitcoin is better or best or even good, just that is does the thing and doing that thing has value.
Bitcoin does not provide value, it is just one of possible alternative to use to make transacting easier.
Unfortunately, bitcoin also burns energy at a rate of small country which is quite unnecessary but will make every person poorer (if only for making our environment worse).
You might want to look into how much our existing banking systems consumes in terms of total energy. It might shock you.
Bitcoin mostly only contends with two costs – energy (computing hashes) and resources (making mining rigs). Meanwhile, traditional banking systems have crazy high energy and resource costs from: building physical banks, vaults, armored cards, paper money, coins, bank clouds, stock market clouds, cheques, payment networks (Visa / MasterCard)... the list goes on. Additionally, classical banking has incredibly high human capital costs – think of all the innumerous people involved in just maintaining a system of trust compared with the near-zero human capital cost of the Bitcoin network.
Actually working for a bank, I can tell you that banks do a lot more than just keep your money.
If you are not convinced try to move your entire financial life to bitcoin and tell me how you get cash, how you pay for fuel at gas station or pay your taxes.
Does bitcoin have inherently web application for you to log in and manage your account?
Does it have a call center for you to call to block your credit card?
What about a host of other services banks provide you just conveniently omitted?
If I want to convert ETH to BAT or whatever, I just authenticate (using the same wallet as used above) to a thin wrapper around the network and everything happens on the Ethereum network itself. Meanwhile, if I want to convert USD to GBP, the layers below whatever service I actually use (let's say TransferWise) as the consumer is deeply nested, probably involving somewhere between 5 - 10 different entities.
What exactly do you mean when you say something does not provide value?
I mean that it is accomplishing a task which has utility to some person.
If something "provides value" it means it generates net benefit after inclusion of various costs and risks.
If we take "provides value for humanity" it means bitcoin would have to make net benefit for humanity.
But that is not the case. Almost all people have other as convenient ways to transact money. So we only have actually very small minority of people who see the actual benefit.
These are mostly people who use bitcoin not to transact but rather to speculate on it -- they don't benefit on it because it makes transacting easier, it is just a pure game on whether the value of bitcoin is going to go up or down.
Another class of people for whom bitcoin creates value are the ones with access to capital, cheap energy and silicon to play the game of burning money for bitcoin.
Everybody else (ie. almost all people in the world) is left with no benefits and a disadvantage of worsening environment.
The energy must be produced somewhere. Even if the particular MWh for mining was produced from renewable sources, it could have been used to offset some non-renewable MWh, but now is lost to the space. The capacity to produce energy is being wasted.
Even if humanity produces 100% energy from renewable resources we are still long way to repairing our environment and that energy could have been used to maybe sequester some CO2.
"Normal" coin on normal account does not require so much energy to be burned.
Cheating on exams only provides value for the chater, but everybody else has to pay some price for it.
That these things have any value attached to them is only due to people agreeing to it and believing it. Which makes them no different from seashells. While seashells would be a lot less practical in todays world they have been used in the past.
Or are you dividing the cost of that banking system by the number of transactions it processes? I.e. comparing 1 transaction to 1 transaction?
On a per-transaction basis traditional banking uses a lot less energy than Bitcoin. Including the cost to run the bank's servers, the air conditioning in their buildings, the Christmas lights their employees put up, and everything.
How can I make such a bold claim? How could I possibly have calculated the energy usage of all those things?
Simple. Bitcoin does about 8.5 TPS which works out to around 268 million transactions per year. Bitcoin uses 0.55% of the world's energy production per cbeci.org.
The ACH network (US direct deposit system) processes around 23 billion transactions per year. The European SEPA network does about 22 billion. The UK's BACS accounts for another 8 billion or so.
So just counting those 3, that's 53bn transactions per year, which is 197x what Bitcoin does. If their energy cost per transaction was as bad as Bitcoin's, then that would take 0.55 * 197 = 108.35% of the world's energy production. There literally isn't enough energy in the world for the banks to be as inefficient as Bitcoin. And we're only handling direct bank debit/credits in the US and Europe so far, we haven't even touched on credit card stuff, international wires, anything in Asia, etc.
A bitcoin doesn't create cash, it just becomes more valuable if you find someone else that is willing to pay more for it than you did (i.e. the 'greater fool theory'). This is why it is speculative - i.e. in the absence of it generating revenues, people are just assuming that someone will buy it for more than they did in the future because of scarcity.
Does the US dollar not have value?
However, its actual value is higher because people have decided to use it as money.
Clearly anything that someone is willing to trade for something else has some sort of 'value'.
- value based on intrinsic utility (gold/oil)
- value based on potential future utility (stocks)
- value based on extrinsic utility (USD/coordination)
The issue, of course, is that people disagree which category Bitcoin (and other cryptos) belong to. The other problem is that a singular thing doesn't necessarily only belong to one category. For example, I put gold in the intrinsic category, but it probably belongs in the extrinsic category too, as gold is used as a medium of exchange that is not directly tied to its intrinsic properties, but merely has intrinsic properties that are useful in that regard (fairly scarce, not varnishing, etc).
Maybe it's also useful to separate out the second bullet into:
- value based on potential future [extrinsic] utility
- value based on potential future [intrinsic] utility
There is a difference in buying stocks which have future cash flows that the value is theoretically based on (which are typically generating revenue/profit/dividends because of the business activity) to speculating on forex or bitcoin (where you are just speculating that someone will be willing to pay more than you bought it for in the future).
So you are saying increasing security, uncounterfietability, censorship-resistance, and decentralization of money distribution has no value?
The central banks/treasuries spending $$$$ yearly to secure their money and governments spending $$$$ on militaries, intelligence, LEO, etc... to add layers of security would disagree with you.
Increased hash rate leads to higher prices and increased prices lead to higher hash rate. Both are true here, this loop is a key component of the NGU (Number Go Up) technology in Bitcoin.
It can be argued that producing new aluminum with cheap power is also kind of a sink. There is plenty of aluminum that has already been produced, if we keep producing new cheap aluminum we are in fact incentivizing using aluminum for cheap single use products and decentivizing recycling. A lot of this new cheap aluminum will end up in landfills, hence the sink.
Sure there is. It’s a way to reach consensus on a sequence of transactions that defines the history of Bitcoin. This is what enables Bitcoin to be decentralized, digital money. Unless you believe this has no value then crunching random SHA-256 hashes does indeed have value.
Have you done a study into how expensive existing fiat systems are, when all is said and done?
Replace inherent value with non-monetary value if that's what you mean.
I wonder if crackers and cryptoanalysts could put some of that to good use, generating massive rainbow tables and the likes. It would be a bit like using spent plutonium for weapons. I guess someone who knows the subject already looked into it...?
You can't buy drugs in modern world without Bitcoin. That's the value. And regardless of whether we see it as "good" or "bad", in the eyes of the people who are buying drugs, it's pretty significant.
They're not random. There's randomness in their construction, yes, but they're encoding trust.
I agree, but isn't that how all fiat money behaves?
Maybe the better way to look at it is, how expensive is it to secure $1 trillion with other means in a decentralized and permission-less fashion?
There is no alternative to compare it too even. So I think we are still in price discovery phase for Bitcoin.
So I shouldn't have to pay high wages if my employees aren't creating anything of value?
People seem to pick and choose when they believe the labor theory of value.
The point of the matter is that value *is* what people are willing to pay for something.
You could argue that a Van Gogh is just arbitrary colors applied to a canvas, it's not worth anything inherently other than through the subjective valuations of other people.
The labour of your employees hopefully adds something you can show to your clients : it’s a lot less speculation on your part.
Van Gogh is a name in the art world, and has a well documented place in art theory. Van Gogh is hardly speculative.
Point of correction: Bitcoin is mined with ASICS not GPUs
Theory that has been replaced, I should note, by neoclassical and Keynesian economics.
so you're agreeing that value is entirely dependent on subjectivity and circumstance?
—————
The problem with Proof-of-Work systems that prevents this logic from actually translating to a sigmoid curve in number-of-miners, though, is that any left-over electricity that isn’t going into “good” mining, could instead be going into Sybil attacks. It’s as if every potential fire-fighter who isn’t hired as a fire-fighter, instead has a chance of being recruited by “Big Fire” to one day work together to all set fires at once.
If-and-when governments actually establish their own cryptocurrencies, massive distributed purchases of electrical capacity for the sake of mounting a Sybil attack are exactly the sort of thing that state intelligence agencies will try to track and prevent ahead-of-time, such that nobody will ever be able to gain that capacity in the first place. Just like right now nobody can really build a stockpile of plutonium.
But as long as governments don’t care, and attackers are free to be economic actors buying up electrical capacity, then there is a specific effect we see today: rather than the network’s electricity consumption just growing to a certain absolute amount, the set of all Proof-of-Work networks are incentivized together to consume a certain percentile amount of global excess electricity consumption — 51% of it, specifically. Such that, at any point, there’s not enough electricity left over to even theoretically mount a Sybil attack against the largest network. (The smaller PoW networks? Basically screwed.)
Saying this I do agree with you about proof-of-work, I work on a proof-of-stake chain myself.
It’s why you see consolidation into mining consortiums. An inflationary PoW chain wouldn’t have that — everyone would be incentivized to mine for themselves (like a gold rush.)
Overall though the number of miners will reduce to a small group because the cost is prohibitive, however it should still be secure.
Mining Bitcoins is like Iceland smelting aluminum? Mining bitcoin "converts electricity into value"? Preposterous.
The value of bitcoin is driven by speculation, and in turns that increases the incentive for the miners, not the other way around. There's no value created by crunching random SHA-256.
As a thought experiment, let's assume that tomorrow a breakthrough slashes in half the cost of energy worldwide. Nuclear fusion reactors become viable or something. That would probably make aluminum cheaper, since processing it is so energy-incentive.
But what about bitcoin? It'd just lower the bar for mining to be profitable, and it'll temporarily increase the size of the mining pool as the difficulty adjusts, but that's about it.
There's simply no direct relationship between the cost of electricity and that of bitcoin that I can see. There's not even a direct relationship between the cost of electricity and the service provided by bitcoin. Bitcoin doesn't become more or less useful based on the cost of mining, it's always one block every 10 minutes give or take.