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"You can draw all sorts of gerrymandered lines to make different things sound equivalent" They are equivalent. I note that you failed to make a detailed rebutt

by mrb 9y ago

"You can draw all sorts of gerrymandered lines to make different things sound equivalent" They are equivalent. I note that you failed to make a detailed rebuttal, and that is because the factual data I mentioned is true. "Only because Christmas lights are used by more people, more often. How much energy does bitcoin consume per transaction, hmm?" It's neither about the number of users, nor about the energy per tx. My point was that people are OK to spend energy on things that are seemingly useless (shiny colorful lights, or SHA256 computation.) And in both cases, Xmas lights or Bitcoin mining, it's fine to spend the energy doing so. Because what we get in return (comfort of life, economic product) is worth the energy spent on it. So if people are OK spending 7 TWh/year on technically useless decorative lights, it is obviously OK to spend a similar amount of energy on powering a revolutionary distributed trustless financial network. Every kWh spent on Bitcoin mining not only enables transactions, but also: creates jobs, creates wealth, reduces trade friction, improves economic output, and on and on. "what's the realistic use case where the participants are far enough apart that this matters and 10-60 minutes is so much better than a couple of days?" Seriously? If you can't answer this question, you have never run a company (even a small company) who engages in international trade. "Non-criminal consumers like the option of chargebacks, and non-criminal merchants accept that." And yet reversibility hampers trade. Some business is never done with reversible CC transactions precisely because merchants can't accept the risk. Bitcoin enables them to pursue ventures that would otherwise not be doable.

lmm 9y ago
> I note that you failed to make a detailed rebuttal, and that is because the factual data I mentioned is true. I note that you failed to respond to my high-level point that makes all your technical minutiae irrelevant. > My point was that people are OK to spend energy on things that are seemingly useless (shiny colorful lights, or SHA256 computation.) Not the same thing at all. People enjoy looking at colourful lights, and so choose to pay to display them. > Every kWh spent on Bitcoin mining not only enables transactions, but also: creates jobs, creates wealth, reduces trade friction, improves economic output, and on and on. In a hypothetical large-scale Bitcoin economy, how many transactions would happen that wouldn't have happened without bitcoin, what proportion of those would be transactions that were positive rather than negative for society, and what would be the energy cost per such transaction? > And yet reversibility hampers trade. Some business is never done with reversible CC transactions precisely because merchants can't accept the risk. Bitcoin enables them to pursue ventures that would otherwise not be doable. We have techniques for doing irreversible transactions in the existing financial system. They're used for a tiny proportion of transactions, and an even tinier proportion of legitimate transactions, because the overwhelming majority of the time reversibility is what you want.
- mrb 9y ago
  "you failed to respond to my high-level point" My response would have been redundant with what I already told michaelt: your point is wrong, waiting <1 second for a visa transaction does not protect the merchant from potential massive losses, because of credit card chargeback fraud which is very real, exploited every day, and can be conducted up to 60 days after the purchase. Example: https://www.reddit.com/r/legaladvice/comments/5r9nqi/credit_card_chargebacks_for_100000_dollars/ https://www.reddit.com/r/legaladvice/comments/5r9nqi/credit_... "Not the same thing at all. People enjoy looking at colourful lights, and so choose to pay to display them" And people enjoy making money, and so choose to pay the electricity to mine bitcoins. Same thing. People pay for things they enjoy. "In a hypothetical large-scale Bitcoin economy, how many transactions [...], what proportion [...], and what would be [...]?" I estimate that if Bitcoin's market capitalization reaches $1 trillion, then miners will still not account for more than 0.74% of the energy consumed by the world ($1.25 billion per TWh), which is more energy-efficient than, say, Canada (whose economy produces $450 million per TWh.) See http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ "We have techniques for doing irreversible transactions in the existing financial system. They're used for a tiny proportion of transactions..." Yes and this is a physical exchange of cash/commodities. Bitcoin/cryptocurrencies make irreversible transactions possible digitally and have no other equivalent in the digital world. This is one of the biggest innovations they bring to the table. "the overwhelming majority of the time reversibility is what you want." No. Litterally 1 in 2 persons conducting transactions would prefer irreversibility. Recipients want it. Senders don't.
  - lmm 9y ago
    > waiting <1 second for a visa transaction does not protect the merchant from potential massive losses, because of credit card chargeback fraud which is very real, exploited every day, and can be conducted up to 60 days after the purchase. And yet it remains economically viable for merchants to operate waiting <1 second for payment, because the trust-based visa system and the broader legal system have countermeasures against chargeback fraud. With bitcoin that's impossible by design; merchants don't accept bitcoin in <1 second and never will, because there is no way to deal with the fraud that would lead to. > And people enjoy making money, and so choose to pay the electricity to mine bitcoins. Same thing. People pay for things they enjoy. Not the same thing. Bitcoin isn't decorative, it's a means to an end - paying for things. And there are much cheaper ways to pay for things, unless you're a criminal. > I estimate that if Bitcoin's market capitalization reaches $1 trillion, then miners will still not account for more than 0.74% of the energy consumed by the world ($1.25 billion per TWh), which is more energy-efficient than, say, Canada (whose economy produces $450 million per TWh.) See http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ That calculation is using an artificially low energy price and an artificially high profit margin for "miner"s, and it's completely disregarding how transaction fees are intended to displace mining fees as a source of mining profits. But even using that number, world GDP is $80t; at a conservative P/E of 20 that makes the world economy's market cap around $1.6q. So bitcoin would be 0.06% of the world's market cap, but consuming 0.74% of the world's energy. > Yes and this is a physical exchange of cash/commodities. Bitcoin/cryptocurrencies make irreversible transactions possible digitally and have no other equivalent in the digital world. There are irreversible digital settlement systems (those that currently exist are even slower than bitcoin, but there's no reason they have to be - it's just that at the scale of the financial entities that can make use of such systems, waiting a couple of days for settlement is a non-issue), and we could easily make more if there were demand for it. Credit card chargebacks are a design decision, not a fundamental limitation.

by mrb 9y ago

lmm 9y ago

> I note that you failed to make a detailed rebuttal, and that is because the factual data I mentioned is true. I note that you failed to respond to my high-level point that makes all your technical minutiae irrelevant. > My point was that people are OK to spend energy on things that are seemingly useless (shiny colorful lights, or SHA256 computation.) Not the same thing at all. People enjoy looking at colourful lights, and so choose to pay to display them. > Every kWh spent on Bitcoin mining not only enables transactions, but also: creates jobs, creates wealth, reduces trade friction, improves economic output, and on and on. In a hypothetical large-scale Bitcoin economy, how many transactions would happen that wouldn't have happened without bitcoin, what proportion of those would be transactions that were positive rather than negative for society, and what would be the energy cost per such transaction? > And yet reversibility hampers trade. Some business is never done with reversible CC transactions precisely because merchants can't accept the risk. Bitcoin enables them to pursue ventures that would otherwise not be doable. We have techniques for doing irreversible transactions in the existing financial system. They're used for a tiny proportion of transactions, and an even tinier proportion of legitimate transactions, because the overwhelming majority of the time reversibility is what you want.

mrb 9y ago
"you failed to respond to my high-level point" My response would have been redundant with what I already told michaelt: your point is wrong, waiting <1 second for a visa transaction does not protect the merchant from potential massive losses, because of credit card chargeback fraud which is very real, exploited every day, and can be conducted up to 60 days after the purchase. Example: https://www.reddit.com/r/legaladvice/comments/5r9nqi/credit_card_chargebacks_for_100000_dollars/ https://www.reddit.com/r/legaladvice/comments/5r9nqi/credit_... "Not the same thing at all. People enjoy looking at colourful lights, and so choose to pay to display them" And people enjoy making money, and so choose to pay the electricity to mine bitcoins. Same thing. People pay for things they enjoy. "In a hypothetical large-scale Bitcoin economy, how many transactions [...], what proportion [...], and what would be [...]?" I estimate that if Bitcoin's market capitalization reaches $1 trillion, then miners will still not account for more than 0.74% of the energy consumed by the world ($1.25 billion per TWh), which is more energy-efficient than, say, Canada (whose economy produces $450 million per TWh.) See http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ "We have techniques for doing irreversible transactions in the existing financial system. They're used for a tiny proportion of transactions..." Yes and this is a physical exchange of cash/commodities. Bitcoin/cryptocurrencies make irreversible transactions possible digitally and have no other equivalent in the digital world. This is one of the biggest innovations they bring to the table. "the overwhelming majority of the time reversibility is what you want." No. Litterally 1 in 2 persons conducting transactions would prefer irreversibility. Recipients want it. Senders don't.
- lmm 9y ago
  > waiting <1 second for a visa transaction does not protect the merchant from potential massive losses, because of credit card chargeback fraud which is very real, exploited every day, and can be conducted up to 60 days after the purchase. And yet it remains economically viable for merchants to operate waiting <1 second for payment, because the trust-based visa system and the broader legal system have countermeasures against chargeback fraud. With bitcoin that's impossible by design; merchants don't accept bitcoin in <1 second and never will, because there is no way to deal with the fraud that would lead to. > And people enjoy making money, and so choose to pay the electricity to mine bitcoins. Same thing. People pay for things they enjoy. Not the same thing. Bitcoin isn't decorative, it's a means to an end - paying for things. And there are much cheaper ways to pay for things, unless you're a criminal. > I estimate that if Bitcoin's market capitalization reaches $1 trillion, then miners will still not account for more than 0.74% of the energy consumed by the world ($1.25 billion per TWh), which is more energy-efficient than, say, Canada (whose economy produces $450 million per TWh.) See http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ http://blog.zorinaq.com/bitcoin-mining-is-not-wasteful/ That calculation is using an artificially low energy price and an artificially high profit margin for "miner"s, and it's completely disregarding how transaction fees are intended to displace mining fees as a source of mining profits. But even using that number, world GDP is $80t; at a conservative P/E of 20 that makes the world economy's market cap around $1.6q. So bitcoin would be 0.06% of the world's market cap, but consuming 0.74% of the world's energy. > Yes and this is a physical exchange of cash/commodities. Bitcoin/cryptocurrencies make irreversible transactions possible digitally and have no other equivalent in the digital world. There are irreversible digital settlement systems (those that currently exist are even slower than bitcoin, but there's no reason they have to be - it's just that at the scale of the financial entities that can make use of such systems, waiting a couple of days for settlement is a non-issue), and we could easily make more if there were demand for it. Credit card chargebacks are a design decision, not a fundamental limitation.