The natural scenario is that as the mining reward goes down, hash rate will dwindle until mining is profitable again.

The only real problem with that is that with a small hash rate, bitcoin can be attacked more easily.

If bitcoin is the monetary backbone for many nations, they will subsidize miners to maintain the balance of power. That is the actual scenario that I'm optimistically predicting.

If bitcoin isn't the monetary backbone for many nations, by then, then it's probably a failure, and should probably be allowed to die.

It's also very possible that transactions fees alone actually will be sufficient to support a high enough amount of hash power to secure the network.

> It's also very possible that transactions fees alone actually will be sufficient to support a high enough amount of hash power to secure the network.

I have to admit that I have no idea how much work is actually needed to secure the network. My point of view is that the current rate of energy expenditure outweighs whatever benefit Bitcoin does or could provide to society. But if this rate is a transient result of still-significant minting going on, things could definitely look different in the future.

Do you know of any analyses on how much work really has to be continuously expended in order for Bitcoin to remain reasonably secure at a given market capitalization?

I don't see why many nations would jump at the opportunity to make Bitcoin their monetary backbone. For example because an immutable monetary policy won't be seen as a feature.

> For example because an immutable monetary policy won't be seen as a feature.

Each nation would love to be able to manipulate the supply itself—why not, if people will let you get away with it?—but the fact that other nations can't do the same could be seen as a feature.

If that's how it's going to work, what stopped nations from making a treaty in which everyone commits to an immutable monetary policy so far? And how does Bitcoin result in whatever it was not being a showstopper anymore?

Many countries already use money internally such as the USD (outside the US) or Euro (outside the EU) for which they do not control the policy. Explicit agreements to use a common currency across nations and share control of the policy are relatively rare; no examples come to mind apart from the EU, and that hasn't always gone according to plan, as Greece can attest. But hard currency is still a fairly common basis for exchange between nation-states, and other countries' currencies are more likely to be adopted when they are governed by relatively immutable policies. Of course, if those policies change to be less immutable it can take time for the effects to manifest. The USD was relatively stable until recently, but other countries are probably reconsidering their dependence on it at this point given the increase in the supply over the past few years.

If Bitcoin does eventually become a common instrument of trade at this level it will fill the same niche currently occupied by gold and other precious metals.

I wouldn’t worry about it. Bitcoin incentivizes energy development. As the world moves to a Bitcoin standard, we will unlock new types of energy that were previously unproductive. It’s likely that energy will more cheap and plentiful under a Bitcoin standard, leading to downward pressure on transaction prices as mining is more economical. Also, more transactions are likely to move off chain to Lightning Network and sidechains.

Still plenty of scaling left in the Bitcoin ecosystem.

Bitcoin proof-of-work difficulty must always increase, the electrical needs are always ever-growing. While you claim that incentivizing electrical production is what POW does, in reality it is a large drain of electricity on a finite electrical grids capacity and it DOES take away from other uses of electricity LIKE aluminum smelting or running hospitals. It is an active and actual source of pollution and uses more electricity than most countries. You can’t handwave this away or insist upon your rhetorical framework when. The apparent physical real world consequences of POW cryptocurrency cannot be evaded or ignored.

The difficulty does and has (in the short term) decreased when the amount of hashpower being used goes down.

Presumably if the price went down by a substantial chunk and stayed down for a while, the hashpower would also decrease, and so the difficulty would also decrease.

Also, if electricity prices went up, or if CO2 emissions were taxed, then hashpower would decrease, and the difficulty would go down in turn.

Bitcoin difficulty does not always increase and needs not always increase.

As for the rest... so what? It uses a lot of electricity and there is some pollution---but a lot of bitcoin mining is done with hydro or geothermal (and will be nuclear if bitcoin continues to grow), so, so what about some pollution?

Some mining is powered sustainably. And for some of THAT power it is true that it wouldn't be used for residential anyway. But for the majority of BTC's power needs the sources are not renewable.

So there's a simple question: how much value do we get out of this tech per CO2e it emits and per ton of e-waste it creates. And AFAICT the answer is: not enough to keep tolerating it in a time where humanity as a whole is seriously worried about climate change for the first time ever.

If you can magically move _all_ the miners to sites with excess renewable electricity and permanently slash the hash rate by 99.9% then maybe it can be tolerated. Until then I would welcome more China-style crackdowns on mining activity across the world.

I can't tolerate the global exploitation of non-ruling people in every nation by their rulers via fiat money manipulation. (And every nation calling itself a "democracy" is actually a "bureaucracy.")

If you aren't upset about this, you probably haven't studied it. I say that in a spirit of helpfulness. Fiat money grossly distorts all of humanity's economic output and therefore retards our progress on all things, including fixing climate problems. Just one example: The US is becoming a nation of renters because enormous funds are buying up the houses with fiat money they borrow nearly for free.

Fortunately, with bitcoin, we can do something about that, without (eventually) harming the environment.

I don't see how cheaper energy would help. Bitcoin needs a certain amount of power in units of cost to be tied up mining to secure the network. If the cost of energy goes down ten times then the same PoW requires ten times the energy.

“as mining is more economical”

Mining doesn’t use a fixed amount of energy. As it becomes more economical more people will mine.

I agree with this. Just want to add, bitcoin mining can happen in remote locations with available power (hydro, geothermal) which are too far from cities to be transported by power wires. There is a limit to how far you can transmit electricity through wires. So, there are tons of untapped natural energy sources.

And precisely in places like these, such as Niagara Falls, you see coin mining displacing tangible goods production due to both needing cheap electricity and one being more profitable than the other. In this case the market is not thinking very clearly in long term priorities, nor is infinite development of hydro and geothermal possible. Actually, this is about realizing that we live on a finite planet with finite resources that a finite amount of humans can finitely exploit finite parts of before the whole thing goes catawumpus. POW and current cryptocurrency systems are thoughtlessly and needlessly wasteful and represent inelegant architecture and brute force hackery like lightnig to correct what ultimately isn’t scalable: blockchain ledgers and fast transaction speeds vs centralization and speed. Look at DNS, for example, and how slow that is, and it’s architecture amd full vs partial copies of ledgers and jeiraexhical canonical lookups etc.

You're ignoring the potential good of bitcoin there. All economic activity looks like a waste if you ignore what it's good for.

Niagara Falls is not what I had in mind. There is lots of untapped hydro power in extremely remote parts Canada where nobody lives, for example.